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NEW QUESTION # 54
The objective of the International Accounting Standards Board (IASB) is to
- A. enforce International Financial Reporting Standards.
- B. provide strategic advice to the International Financial Reporting Standards Advisory Council.
- C. oversee the standard setting process and International Financial Reporting Standards Advisory Council.
- D. set International Financial Reporting Standards.
Answer: D
NEW QUESTION # 55
Published financial statements are regulated by
- A. accounting and legal rules to ensure the provision of relevant and reliable financial information to shareholders.
- B. shareholders who specify the framework for the provision of consistent and comparable financial information for decision-making.
- C. rules to ensure the provision of consistent financial information to investors.
- D. International Financial Reporting Standards to ensure the provision of useful financial information to shareholders.
Answer: A
NEW QUESTION # 56
Which one of the following examples would not represent an agency cost?
- A. the cost of preparing a cost-benefit report for a new project
- B. the cost of preparing a financial report for shareholders
- C. the cost of employing an internal auditor
- D. the cost of engaging an external auditor
Answer: A
NEW QUESTION # 57
Generally accepted accounting practice recognises revenue when
- A. goods are dispatched to the customer.
- B. goods are produced.
- C. customers order goods.
- D. cash is received for the goods.
Answer: A
NEW QUESTION # 58
In individual countries, Generally Accepted Accounting Principles (GAAP) is primarily a combination of
- A. national company law and national accounting standards.
- B. national company law and local stock exchange requirements.
- C. national company law, national accounting standards and local stock exchange requirements.
- D. company law, accounting standards, local stock exchange requirements and international accounting standards.
Answer: C
NEW QUESTION # 59
The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal, refers to which basis of measurement?
- A. present value
- B. current cost
- C. historical cost
- D. realisable value
Answer: D
NEW QUESTION # 60
Which one of the following would be recognised in the statement of profit or loss and other comprehensive income?
- A. employee wages
- B. prepayment of expenses
- C. retained earnings
- D. inventory
Answer: A
NEW QUESTION # 61
Which one of the following statements is correct?
- A. Accounting standards provide the basic knowledge upon which the conceptual framework is developed.
- B. Accounting standards are developed and maintained using a consultative process with the OECD.
- C. Australian accounting standards are based on the US GAAP.
- D. Accounting standards prescribe the possible accounting treatments.
Answer: D
NEW QUESTION # 62
Which one of the following shows whether the financial statements of a company show a true and fair presentation of the financial performance of the company?
- A. Director's Report
- B. Corporate Governance Statement
- C. Auditor's Report
- D. Statement of cash flows
Answer: C
NEW QUESTION # 63
A multinational company is converting the methodology of reporting by its subsidiaries in various countries to make it uniform with the requirements of the International Financial Reporting Standards (IFRS). While changing the reporting methodologies, accountants have to apply certain judgments.
Which one of the following is not a valid motivation for decision making on reporting methodologies?
- A. to present the company's financial performance in the most favourable way
- B. to comply with the information demands of government bodies in home country
- C. to present the financial statements in a manner that is understood by most users
- D. to be consistent with the methodologies followed in the home country of the company
Answer: A
NEW QUESTION # 64
When business managers seek detailed information about the profitability or efficiency of different parts of their operations, they would find the most useful information in
- A. various management accounting reports.
- B. the annual financial report.
- C. the company's accounting policies.
- D. financial statements as specified by IAS 1 Presentation of Financial Statements.
Answer: A
NEW QUESTION # 65
A decrease in assets is most likely to be recognised in the financial report as
- A. revenue earned.
- B. a change in equity.
- C. a liability.
- D. an expense.
Answer: D
NEW QUESTION # 66
Which one of the following countries has the view that Generally Accepted Accounting Principles (GAAP) refers to accounting practices which are regarded as permissible by the accounting profession?
- A. United States of America
- B. United Kingdom
- C. Australia
- D. Canada
Answer: B
NEW QUESTION # 67
The Framework for the Preparation and Presentation of Financial Statements which assists the development of the International Financial Reporting Standards (IFRS) was originally approved by the
- A. International Federation of Accountants (IFAC).
- B. IFRS Interpretations Committee (IFRIC).
- C. International Accounting Standards Committee (IASC).
- D. International Accounting Standards Board (IASB).
Answer: C
NEW QUESTION # 68
Current cost accounting reflects an approach to capital maintenance based on maintaining which one of the following?
- A. cost of assets in the business
- B. profitability of the business
- C. operating capability of the business
- D. financial capability of the business
Answer: C
NEW QUESTION # 69
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?
- A. Details of any dividends paid or proposed.
- B. Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.
- C. Details regarding any significant changes to Daylight's state of affairs for the year that just ended.
- D. Details regarding accounting policies pursued by Daylight in preparation of its financial statements.
Answer: D
NEW QUESTION # 70
Which one of the following parties provides information to ensure that the financial statements show a true and fair view?
- A. tax consultants
- B. shareholders
- C. directors of the company
- D. financial Institutions
Answer: C
NEW QUESTION # 71
Which one of the following is not a principal motivation for creative accounting?
- A. personal incentives
- B. public good
- C. benefits from shares and share options
- D. bonus-related pay
Answer: B
NEW QUESTION # 72
The body that is part of the international standard-setting framework reporting to the International Financial Reporting Standards Foundation (IFRS Foundation) is the
- A. International Accounting Standards Committee.
- B. International Accounting Board.
- C. International Accounting Standards Board.
- D. Centre on Transnational Corporations.
Answer: C
NEW QUESTION # 73
Which one of the following is not an Australian Securities Exchange (ASX) principle of good corporate governance?
- A. Respect the rights of shareholders.
- B. Promote ethical and responsible decision-making.
- C. Safeguard the environment.
- D. Remunerate fairly and responsibly.
Answer: C
NEW QUESTION # 74
Which one of the following statements is correct about using judgement in the financial reporting process?
- A. Accountants should not be allowed to use their own judgement.
- B. Use of individual judgement is required to choose between alternative methods available within accounting standards.
- C. Judgement can be allowed in the statement of comprehensive income but not in the statement of financial position.
- D. A true and fair view cannot be assured if individual judgement is allowed.
Answer: B
NEW QUESTION # 75
The chairperson of XYZ Company is concerned about the readability of the annual financial report that is about to be published on its website. XYZ Company is obliged to comply with International Financial Reporting Standards, and the report contains all of the required financial statements, the auditor's report, corporate governance statements, declarations of accounting policy, explanatory notes and a section that addresses the company's corporate social responsibility program.
The chairperson is wondering whether the report can be condensed. The issue that is concerning the chairperson is known as
- A. the cost of compliance.
- B. information overload.
- C. the costs of social responsibility reporting.
- D. the agency costs of monitoring.
Answer: B
NEW QUESTION # 76
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