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NEW QUESTION 58
Which one of these is a disadvantage of a conceptual framework?
- A. It replaces the established principles.
- B. A single framework is not suitable for all users of financial statements.
- C. It increases the chances of political interference in the development of accounting standards.
- D. It mandates the formats of various financial statements.
Answer: B
NEW QUESTION 59
Which one of the following is not a function of the trustees of the International Financial Reporting Standards Foundation (IFRS Foundation)?
- A. appointing the members of the International Accounting Standards Board (IASB)
- B. promoting the application of International Financial Reporting Standards (IFRSs)
- C. ensuring the financing of the International Accounting Standards Board (IASB)
- D. providing suggestions on technical matters relating to accounting standards
Answer: D
NEW QUESTION 60
Which one of the following is the correct treatment of sales?
- A. Credit sales are recorded in the receivables ledger prior to posting to the general ledger.
- B. Cash sales are recorded in the receivables ledger prior to posting to the general ledger.
- C. Cash and credit sales are recorded in the receivables ledger prior to posting to the general ledger.
- D. Credit sales are not recorded in the receivables ledger prior to posting to the general ledger.
Answer: A
NEW QUESTION 61
Which of the following are the stated objectives of the International Accounting Standards Board (IASB)?
I)Enforce accounting standards.
II)Develop accounting standards.
III)Work for convergence of accounting standards.
- A. I only
- B. I and II only
- C. II and III only
- D. III only
Answer: C
NEW QUESTION 62
The two fundamental qualitative characteristics of the financial information are
- A. relevance and faithful representation.
- B. faithful representation and comparability.
- C. verifiability and relevance.
- D. relevance and comparability.
Answer: A
NEW QUESTION 63
Which one of the following is an accurate definition of fair value of an asset?
- A. The cost of replacing an asset with an identical item.
- B. The amount yet to be written off over the remainder of the asset's useful life.
- C. The price for which an asset could be sold net of disposal costs.
- D. The price for which an asset could be sold in an orderly transaction between market participants at the measurement date.
Answer: D
NEW QUESTION 64
Which form of capital market efficiency exists when share prices on the stock market reflect all information whether public or not?
- A. allocative efficiency
- B. semi-strong form efficiency
- C. strong form efficiency
- D. information processing efficiency
Answer: C
NEW QUESTION 65
Which one of these concepts suggests that stock prices react to new information almost instantly?
- A. market power
- B. incentive substitution
- C. efficient market
- D. bargaining power
Answer: C
NEW QUESTION 66
Which one of the following describes the key advantage of the manual system of accounting?
- A. Corrections are easily managed as updating or recreating the whole document is not difficult.
- B. The quality of output is not necessarily an issue.
- C. Processing is maintained at a reasonable speed even while dealing with large volumes of data.
- D. A thorough understanding of the business can be gained through it.
Answer: D
NEW QUESTION 67
Financial markets have achieved operational efficiency when
- A. the price of stocks and shares are available accurately and quickly.
- B. the cost of transactions is a reflection of the actual cost incurred.
- C. the costs of financial transactions are kept as low as possible.
- D. past records are used to predict the future prices of goods.
Answer: C
NEW QUESTION 68
A rules-based approach to standard setting
- A. ensures there are no conflicts within accounting standards as each issue is handled just once.
- B. provides a broad framework for standard setting.
- C. prescribes standards that attempt to cover all eventualities a business may face.
- D. helps a standard-setting body to prioritise matters.
Answer: C
NEW QUESTION 69
Which one of the following methods is not used for 'creative accounting'?
- A. off balance sheet financing
- B. profit smoothing
- C. window dressing
- D. aggressive debt management
Answer: D
NEW QUESTION 70
The use of the principle of substance over form is found in which one of the following accounting treatments?
- A. accounting for non-current assets
- B. accounting for property, plant and equipment
- C. accounting for inventories
- D. accounting for finance leases
Answer: D
NEW QUESTION 71
A company sold some old operating equipment from its factory. After depreciation was accounted for, a small gain on sale was recorded. According to the revised IAS 1 Presentation of Financial Statements, this transaction will be shown as a separate item 'gain on sale of equipment'. This item will be shown in the statement of
- A. comprehensive income.
- B. changes in equity.
- C. financial position.
- D. cash flow.
Answer: A
NEW QUESTION 72
Which one of these is a key principle of good corporate governance?
- A. non-disclosure of directors' agency relationship with the company
- B. effective communication with shareholders
- C. restriction of shareholders' rights in decision-making
- D. effective management of the employees of the company
Answer: B
NEW QUESTION 73
An example of voluntary reporting in Australia is a
- A. statement of financial position.
- B. statement of cash flows.
- C. sustainability report.
- D. statement of comprehensive income.
Answer: C
NEW QUESTION 74
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