lOMoARcPSD|3013804
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lOMoARcPSD|3013804
Chapter 1
Statement of Financial Position
NAME: Date:
Professor: Section: Score:
QUIZ 1:
1. Which of the following statements is correct?
a. PAS 1 Presentation of Financial Statements prescribes the basis for presentation of general
and special purpose financial statements to improve both inter-comparability and intra-
comparability.
b. Intra-comparability is also referred to as horizontal comparability while inter-
comparability is also referred to as vertical comparability.
c. Working capital is the net amount of a company’s relatively liquid resources. It is the
excess of total assets over total liabilities.
d. Equity is the residual interest in the net assets of an entity.
2. According to PAS 1, these are financial statements intended to serve the needs of users
who do not have the authority to demand financial reports tailored for their own needs.
a. General purpose financial statements
b. Common purpose financial statements
c. Regular financial statements
d. All-purpose financial statements
3. The assessment of an entity’s going concern shall cover a minimum period
of a. one year c. three years
b. three months d. any of these
4. In which of the following instances would a liability that would otherwise be presented as
current is presented as noncurrent?
a. The liability is payable on demand but the entity estimates that it is probable that the
lender will not demand payment within 12 months after the reporting period.
b. The liability is payable on demand but the lender promises the entity after the
reporting period that the lender will not demand payment in the next 12 months.
c. The entity enters into a refinancing agreement after the reporting period but before the
financial statements are authorized for issue.
d. The entity enters into a refinancing agreement and the refinancing agreement is
completed by the balance sheet date.
5. In a classified balance sheet, deferred tax assets/liabilities are presented as
a. non-current items if the deferred taxes are not expected to reverse within 12 months
after the reporting period
b. noncurrent items
c. current items
d. a or c
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6. General purpose financial statements are those statements that cater to the
a. common and specific needs of a wide range of external and internal users.
b. common needs of a wide range of external and internal
users. c. common needs of a wide range of external users.
d. specific needs of a wide range of external users.
7. In virtually all circumstances, a fair presentation is achieved by compliance with applicable
IFRSs. A fair presentation also requires an entity: (choose the incorrect statement)
a. to select and apply accounting policies in accordance with PAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors. PAS 8 sets out a hierarchy of authoritative
guidance that management considers in the absence of a Standard or an Interpretation
that specifically applies to an item.
b. to present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information.
c. to provide additional disclosures when compliance with the specific requirements in
PFRSs is insufficient to enable users to understand the impact of particular transactions,
other events and conditions on the entity’s financial position and financial performance.
d. to establish a system of internal control the responsibility for which is the entity’s
management. Furthermore, the entities financial statements should be audited by an
independent external party at least annually .
8. Each component of the financial statements shall be identified clearly. In addition, the
following information shall be displayed prominently, and repeated when it is necessary for a
proper understanding of the information presented:
I. The name of the reporting entity or other means of identification, and any change in that
information from the preceding balance sheet date;
II. Whether the financial statements cover the individual entity or a group of entities;
III. The balance sheet date or the period covered by the financial statements, whichever is
appropriate to that component of the financial statements;
IV. The presentation currency, as defined in PAS 21 The Effects of Changes in Foreign Exchange
Rates
V. The level of rounding used in presenting amounts in the financial statements.
a. I, II, III c. I, II, IV, V
b. I, II, III, IV d. I, II, III, IV, V
9. When an entity’s balance sheet date changes and the annual financial statements are presented
for a period longer or shorter than one year, an entity shall disclose, in addition to the period
covered by the financial statements:
I. The reason for using a longer or shorter period
II. The fact that comparative amounts for the income statement, statement of changes in
equity, cash flow statement and related notes are not entirely comparable
III. The amounts charged to the beginning balance of the retained earnings, net of tax
IV. Pro-forma financial statements, as a supplemental information in the notes
a. I, II c. I, III, IV
b. I, III d. I, II, III, IV
Page| 1
lOMoARcPSD|3013804
Chapter 1
Statement of Financial Position
NAME: Date:
Professor: Section: Score:
QUIZ 1:
1. Which of the following statements is correct?
a. PAS 1 Presentation of Financial Statements prescribes the basis for presentation of general
and special purpose financial statements to improve both inter-comparability and intra-
comparability.
b. Intra-comparability is also referred to as horizontal comparability while inter-
comparability is also referred to as vertical comparability.
c. Working capital is the net amount of a company’s relatively liquid resources. It is the
excess of total assets over total liabilities.
d. Equity is the residual interest in the net assets of an entity.
2. According to PAS 1, these are financial statements intended to serve the needs of users
who do not have the authority to demand financial reports tailored for their own needs.
a. General purpose financial statements
b. Common purpose financial statements
c. Regular financial statements
d. All-purpose financial statements
3. The assessment of an entity’s going concern shall cover a minimum period
of a. one year c. three years
b. three months d. any of these
4. In which of the following instances would a liability that would otherwise be presented as
current is presented as noncurrent?
a. The liability is payable on demand but the entity estimates that it is probable that the
lender will not demand payment within 12 months after the reporting period.
b. The liability is payable on demand but the lender promises the entity after the
reporting period that the lender will not demand payment in the next 12 months.
c. The entity enters into a refinancing agreement after the reporting period but before the
financial statements are authorized for issue.
d. The entity enters into a refinancing agreement and the refinancing agreement is
completed by the balance sheet date.
5. In a classified balance sheet, deferred tax assets/liabilities are presented as
a. non-current items if the deferred taxes are not expected to reverse within 12 months
after the reporting period
b. noncurrent items
c. current items
d. a or c
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6. General purpose financial statements are those statements that cater to the
a. common and specific needs of a wide range of external and internal users.
b. common needs of a wide range of external and internal
users. c. common needs of a wide range of external users.
d. specific needs of a wide range of external users.
7. In virtually all circumstances, a fair presentation is achieved by compliance with applicable
IFRSs. A fair presentation also requires an entity: (choose the incorrect statement)
a. to select and apply accounting policies in accordance with PAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors. PAS 8 sets out a hierarchy of authoritative
guidance that management considers in the absence of a Standard or an Interpretation
that specifically applies to an item.
b. to present information, including accounting policies, in a manner that provides relevant,
reliable, comparable and understandable information.
c. to provide additional disclosures when compliance with the specific requirements in
PFRSs is insufficient to enable users to understand the impact of particular transactions,
other events and conditions on the entity’s financial position and financial performance.
d. to establish a system of internal control the responsibility for which is the entity’s
management. Furthermore, the entities financial statements should be audited by an
independent external party at least annually .
8. Each component of the financial statements shall be identified clearly. In addition, the
following information shall be displayed prominently, and repeated when it is necessary for a
proper understanding of the information presented:
I. The name of the reporting entity or other means of identification, and any change in that
information from the preceding balance sheet date;
II. Whether the financial statements cover the individual entity or a group of entities;
III. The balance sheet date or the period covered by the financial statements, whichever is
appropriate to that component of the financial statements;
IV. The presentation currency, as defined in PAS 21 The Effects of Changes in Foreign Exchange
Rates
V. The level of rounding used in presenting amounts in the financial statements.
a. I, II, III c. I, II, IV, V
b. I, II, III, IV d. I, II, III, IV, V
9. When an entity’s balance sheet date changes and the annual financial statements are presented
for a period longer or shorter than one year, an entity shall disclose, in addition to the period
covered by the financial statements:
I. The reason for using a longer or shorter period
II. The fact that comparative amounts for the income statement, statement of changes in
equity, cash flow statement and related notes are not entirely comparable
III. The amounts charged to the beginning balance of the retained earnings, net of tax
IV. Pro-forma financial statements, as a supplemental information in the notes
a. I, II c. I, III, IV
b. I, III d. I, II, III, IV
