IFRS Accounting Policies Quiz

26 Questions

Which financial statement presents the income and expenses of a company?

Statement of comprehensive income

Which financial statement shows the changes in equity related to owners that are not reflected in the income statement?

Statement of changes in equity

Which financial statement is useful in assessing the ability of a company to generate cash and cash equivalents?

Cash Flow Statement

Which financial statement includes information about accounting policies, estimation uncertainty, and dividends proposed or declared?

Notes to the financial statements

Which equation represents the fundamental balance sheet equation?

A→Resources needed to operate the business L + E→Sources of financing the assets E→Residual interest in the assets after deducting all the liabilities

What does E represent in the balance sheet equation?

Residual interest in the assets after deducting all the liabilities

What do consolidated financial statements include?

Financial statements of a group where assets, liabilities, equity, income, expenses, and cash flows of the parent and its subsidiaries are presented as those of a single economic entity

Which one of the following financial statements is required to disclose compliance with International Financial Reporting Standards (IFRS)?

Statement of financial position

Which one of the following statements is true regarding the presentation of current and non-current items in the Statement of financial position?

Current assets and liabilities are realized or settled within 12 months of the balance sheet date.

Which one of the following statements is true regarding the presentation of components of comprehensive income?

Components of comprehensive income are presented separately from non-owner changes in equity.

Which one of the following statements is true regarding the application of International Financial Reporting Standards (IFRS)?

IFRS requires full compliance with all International Accounting Standards (IAS), IFRS, SIC, and IFRIC.

According to IFRS 8, which of the following is a requirement for segment reporting?

Segment Revenue should be greater than 10% of Total revenue

In Eni's financial statement, why did they provide information on the segment for the previous two years?

To compare the changes in segment categorization

What does IFRS 1 regulate?

First-time adoption of IFRS

What is one of the bases of IFRS?

Comparability of financial statements

Under IFRS, companies are required to recognize all assets and liabilities that are permitted to be recognized.

True

Which financial statements must be reconciled when transitioning to IFRS?

Balance sheet and income statement

Which one of the following accurately describes retrospective application?

Applying a new accounting policy to past transactions as if that policy had always been applied

Which accounting principles are used in Italy?

OIC

Which one of the following accurately describes retrospective restatement?

Correcting errors in the recognition, measurement, and disclosure of financial statement elements

What are the fundamental elements for preparing Italian financial statements?

Clearness, fair representation, correctness

In the absence of specific guidance, what should management consider when developing and applying an accounting policy?

Relevance, reliability, neutrality, prudence, and completeness of financial information

What is the purpose of IFRS 8 - Segment Reporting?

To enable users of financial statements to evaluate the nature and financial effects of an entity's business activities and operating environments

Which part of the financial statements allows for the disclosure of accounting information with the obligation of giving supplementary information?

Narrative part (explanatory notes)

In Italy, how are all costs and revenues recorded in the income statement?

Both costs and revenues are recorded in the income statement

What are the two types of values that compose the financial statements?

Certain and estimated

Study Notes

Financial Statements

The income statement presents the income and expenses of a company.
The statement of changes in equity shows the changes in equity related to owners that are not reflected in the income statement.
The statement of cash flows is useful in assessing the ability of a company to generate cash and cash equivalents.
The notes to the financial statements include information about accounting policies, estimation uncertainty, and dividends proposed or declared.

Balance Sheet Equation

The fundamental balance sheet equation is: Assets = Equity + Liabilities.
E in the balance sheet equation represents Equity.

Consolidated Financial Statements

Consolidated financial statements include financial statements of the parent company and its subsidiaries.

International Financial Reporting Standards (IFRS)

IFRS requires disclosure of compliance with International Financial Reporting Standards (IFRS) in the financial statements.
IFRS 1 regulates the first-time adoption of International Financial Reporting Standards (IFRS).
One of the bases of IFRS is the accrual basis of accounting.
Companies are required to recognize all assets and liabilities that are permitted to be recognized under IFRS.
When transitioning to IFRS, financial statements must be reconciled.

Segment Reporting

IFRS 8 regulates segment reporting.
According to IFRS 8, one of the requirements for segment reporting is to disclose information about the segment for the previous two years.
The purpose of IFRS 8 is to provide information about the different business segments of a company.

Accounting Principles

In Italy, the accounting principles used are the accrual basis of accounting.
The fundamental elements for preparing Italian financial statements include transparency, comparability, and faith representation.

Accounting Policies

In the absence of specific guidance, management should consider the principle of prudence when developing and applying an accounting policy.
The notes to the financial statements allow for the disclosure of accounting information with the obligation of giving supplementary information.

Income Statement

In Italy, all costs and revenues are recorded in the income statement based on the accrual basis of accounting.

Financial Statement Values

The two types of values that compose the financial statements are historical cost and fair value.

Test your knowledge of IFRS accounting policies with this quiz! Learn about the starting point for entity accounting, exceptions to retrospective application, and recognizing assets and liabilities under IFRS.

Make Your Own Quizzes and Flashcards

Convert your notes into interactive study material.