Applying IFRS Standards 5th Edition | Wiley Regulatory Reporting Test Bank : Chapters 1–24 & A–D | Exam Questions with Answers

COMPREHENSIVE TEST BANK for
Applying IFRS Standards (Wiley Regulatory
Reporting) 5th Edition by Ruth Picker,
David Kolitz
ALL-INCLUSIVE CHAPTERS 1-24 AND A-D
CHAPTERS| VERIFIED EXAM Q&As FOR EXAM
PREPARATIONS| ANSWERS (*)




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, CHAPTER 1: The IASB and its Conceptual Framework

Learning Objectives

1.1Describe the organisational structure of the key players in setting International Financial Reporting
Standards (IFRSs)

1.2Describe the purpose of a conceptual framework – who uses it and why

1.3Explain the qualitative characteristics that make information in financial statements useful

1.4Discuss the going concern assumption underlying the preparation of financial statements

1.5Define the basic elements in financial statements – assets, liabilities, equity, income and expenses

1.6Explain the principles for recognising the elements of financial statements

1.7Distinguish between alternative bases for measuring the elements of financial statements

1.8Outline concepts of capital.



Multiple Choice Questions

1. Which of the following statements is INCORRECT?

Learning Objective 1.1 Describe the organisational structure of the key players in setting IFRSs:

*a. The International Accounting Standards Board was replaced by the International Standards
Committee in 2001.

b. The International Accounting Standards Board is funded by the IASC Foundation.

c. The responsibility for issuing International Financial Reporting Standards lies with the International
Accounting Standards Board.

d. Members of the International Accounting Standards Board are appointed by the IFRS Foundation.



2. Which of the following bodies report to the IFRS Foundation?

Learning Objective 1.1 Describe the organisational structure of the key players in setting IFRSs:

a. The IASB and AASB

b. The IASB, AASB and the IFRS Advisory Council
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c. The IASB and the FASB
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,*d. The IASB and the IFRS Advisory Council




3. Which of the following statements is INCORRECT?

Learning Objective 1.2 Describe the purpose of a conceptual framework – who uses it and why

a. The Framework identifies the qualitative characteristics that make information in financial statements
useful.

*b. The Framework defines principles for accounting recognition, measurement and disclosure.

c. The Framework defines the objective of financial statements.

d. The Framework defines the basic elements of financial statements and the concepts for recognizing and
measuring them in financial statements.



4. Which of the following statements is CORRECT?

Learning Objective 1.2 Describe the purpose of a conceptual framework – who uses it and why

*a. IAS 8 Accounting Policies, Changes in Accounting Estimates, and Errors requires that The
Framework be followed in the absence of a specific standard or interpretation.

b. IAS 8 Accounting Policies, Changes in Accounting Estimates, and Errors recommends, but does not
require The Framework to be followed in the absence of a specific standard or interpretation.

c. The Framework is used solely by the IASB when considering new accounting issues.

d. The Framework is non-binding guidance which does not have to be followed by preparers of financial
statements.



5. The Framework focuses on:

Learning Objective 1.2 Describe the purpose of a conceptual framework – who uses it and why

a. privately owned business entities only.

*b. business entities only, including private and state owned business entities.

c. business entities, although the concepts may be applied to other types of entities, such as not-for profit
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d. all types of entities, including business entities, government and not-for profit entities.
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, 6. General Purpose Financial Statements:

Learning Objective 1.2 Describe the purpose of a conceptual framework – who uses it and why

a. are only necessary for users who do not have the power to obtain information in addition to that
contained within the General Purpose Financial Statement.

b. provide all the information that users may need to make economic decisions.

c. focus on disclosing information relevant to assessing the ability of an entity to generate future cash
flows.

*d. meet the information needs that are common to all users.



7. Which of the following statements is INCORRECT in relation to the preparation of financial
statements?

Learning Objective 1.2 Describe the purpose of a conceptual framework – who uses it and why

a. General Purpose Financial Statements must be prepared in accordance with accounting standards.

b. General Purpose Financial Statements are reports intended to meet the information needs common to
users who are unable to command the preparation of reports tailored so as to specifically meet all their
information needs.

*c. The sole objective of a General Purpose Financial Statement is to serve an economic decision making
objective.

d. The objective of a General Purpose Financial Statement is to provide information useful to users for
making and evaluating decisions about the allocation of scarce resources.



8. Which of the following statements is INCORRECT?

Learning Objective 1.2 Describe the purpose of a conceptual framework – who uses it and why

a. Information about the variability of profits helps in forecasting future cash flows from an entity‘s
existing resources.

*b. Performance of an entity is determined solely through examination of the Statement of Profit or Loss
and Other Comprehensive Income of an entity.
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c. An entity‘s Statement of Cash Flows provides insight into changes in assets and liability balances
during an accounting period.
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