Question 1

Which of the following statements are correct in the context of accounting concepts and principles?

I)The going concern assumption requires that assets be carried at their cost values.

II)Prudence allows the creation of contingency reserves and more generous provisions.

III)Financial information is considered complete even if it excludes non-material information.

IV)Understandability does not require complex information to be excluded from financial reports.

Options :

A : I and III only

B : II and III only

C : II and IV only

D : III and IV only

Answer: D

Question 2

Liquidity of a company is based on its ability to

Options :

A : buy back shares.

B : meet long term commitments.

C : pay dividends to shareholders.

D : meet short term commitments.

Answer: D

Question 3

You assumed the role as the Chairperson of the Board of Directors of Daylight Ltd. As you start to write your first directors' report, which one of the following areas are you not required to include in your report?

Options :

A : Details of any dividends paid or proposed.

B : Details regarding any significant changes to Daylight's state of affairs for the year that just ended.

C : Details regarding accounting policies pursued by Daylight in preparation of its financial statements.

D : Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.

Answer: C

Question 4

Which one of the following is not a function of the trustees of the International Financial Reporting Standards Foundation (IFRS Foundation)?

Options :

A : ensuring the financing of the International Accounting Standards Board (IASB)

B : appointing the members of the International Accounting Standards Board (IASB)

C : promoting the application of International Financial Reporting Standards (IFRSs)

D : providing suggestions on technical matters relating to accounting standards

Answer: D

Question 5

Restrictions on the scope of a specific accounting standard are stated in

Options :

A : that specific standard.

B : the IASB's Conceptual Framework.

C : the explanatory materials provided by the AASB.

D : various Statements of Accounting Concepts (SACs) issued by the AASB.

Answer: A

Free Financial-Accounting-and-Reporting Mock Exam – Practice Online Confidently

Buying Options: