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NEW QUESTION # 69
Which THREE of the following statements are NOT true of the IFRS Foundation trustees?
- A. Are mainly from Europe and the USA
- B. Responsible of appointing members of the IFRS interpretations committee
- C. Receive funding by donations from the general public
- D. Responsible for appointing members of the IA5B
- E. Are involved in the technical matters relating to accounting standards
Answer: A,C,E
NEW QUESTION # 70
Which of the following is NOT a responsibility of the International Accounting Standards Board?
- A. Withdrawal of international accounting reporting standards.
- B. Fundraising for the international accounting standards committee foundation.
- C. Preparation of international financial reporting standards.
- D. Final approval of interpretations by the international financial reporting interpretations committee.
Answer: B
NEW QUESTION # 71
To apply the fundamental principles of the Code of Ethics, existing and potential threats to the entity first need to be identified and evaluated.
Which THREE of the following are identified in the Code as threats?
- A. Self-review threats
- B. Integrity threats
- C. Familiarity threats
- D. Objectivity threats
- E. Self-interest threats
- F. Confidentiality threat
Answer: A,C,E
NEW QUESTION # 72
Which of the following would be capitalized as an intangible asset in accordance with IAS 38 Intangible Assets?
- A. The cost of advertising the launch of a new product.
- B. The cost of assets used in the research and development department.
- C. The cost of testing a new process which will create efficiency savings of 10% once implemented.
- D. The cost of market research into a new geographical market.
Answer: C
NEW QUESTION # 73
UV's financial statements for the year ended 31 March 20X8 were approved for publication on 30 June 20X8.
In accordance with IAS 10 Events After the Reporting Period, which of the following material events would have been classified as a non-adjusting event in these financial statements?
- A. On 1 June 20X8 UV was awarded damages of $70,000 in respect of a legal claim that it had made against the local government authority in October 20X7.
- B. On 10 April 20X8 UV received a communication stating that one of its customers had ceased trading and gone into liquidation. The balance outstanding at 31 March 20X8 was unlikely to be paid.
- C. On 28 April 20X8 a fire destroyed half of UV's main production facility. Output was severely reduced for six months.
- D. On 1 June 20X8 UV's auditors discovered that an error in valuation had caused the closing inventory to be overvalued by $150,000.
Answer: C
NEW QUESTION # 74
An entity acquires 100% of the equity shares in another entity.
The consideration paid for the shares is less than the fair value of the net assets acquired.
Which of the following is the correct accounting treatment for the difference between the consideration paid and the fair value of the net assets acquired, in accordance with IFRS 3 Business Combinations?
- A. Recognise as a deferred credit and release to consolidated profit or loss over its useful economic life.
- B. Recognise as a deduction from goodwill in the consolidated statement of financial position.
- C. Recognise as a gain in the statement of changes in equity.
- D. Recognise as a gain in the consolidated statement of profit or loss.
Answer: D
NEW QUESTION # 75
ST has an asset that was classified as held for sale at 30 June 20X4. The asset's carrying value was
$230,000 and its fair value $210,000.
The cost of disposal was estimated to be $15,000.
In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which of the following values should be used for the asset in the statement of financial position as at 30 June 20X4?
- A. $230,000
- B. $210,000
- C. $195,000
- D. $215,000
Answer: C
NEW QUESTION # 76
Indicate the possible reasons for the changes identified below to working capital ratios by placing the appropriate reason against each change.
Answer:
Explanation:
NEW QUESTION # 77
Country ZZ allows the cost of a capital asset to be adjusted for an indexation allowance which takes into consideration the effect of inflation, although the indexation allowance cannot convert a chargeable gain into a chargeable loss.
The following data relates to the sale of an asset ABC has the following working capital ratios at 31 December
20X2:
Dunng the year ended 31 December 20X4 credit purchases wefe $1,700,000 and at 31 December 20X4 the outstanding trade payables balance was $340,000 Calculate the working capital cycle for ABC.
Give your answer to the nearest whole number of days and assume there are 365 days in a year. March 20X4:
Calculate the chargeable gain or loss in respect of the sale of this asset.
Give your answer to the nearest $.
Answer:
Explanation:
$0
NEW QUESTION # 78
In Country X corporate income tax is levied on profits as follows:
Which of the following describes the tax rate structure in Country X?
- A. Competent
- B. Regressive
- C. Progressive
- D. Proportional
Answer: C
NEW QUESTION # 79
Which of the following is an effect of using equity accounting to include an entity in the consolidated statement of financial position of a group?
- A. The group share of each asset and liability of the investee entity is included with the investing entity's balances.
- B. The investment in the investee entity is included in non-current assets at cost to the investing entity.
- C. 100% of each asset and liability of the investee entity is included with the investing entity's balances.
- D. A single figure is included in net assets which is the sum of the initial cost of investment in the investee entity plus the group share of all changes in net assets since acquisition.
Answer: D
NEW QUESTION # 80
Statements of financial position for FG, IJ and KL at 31 December 20X5 include the following balances:
FG acquired 90% of IJ's equity shares for $358,000 on 1 July 20X5 when IJ's retained earnings were $98,000.
FG acquired 100% of KL's equity shares for $360,000 on 1 January 20X5 when KL's retained earnings were $155,000.
FG used the proportion of net assets method to value non-controlling interests at acquisition.
KL sold a piece of land to FG for $130,000 on 1 September 20X5. At the date of transfer the land had a carrying value of $50,000.
The management of FG expect KL to make profits in the future and no impairment ot its goodwill was proposed at 31 December 20X5.
Calculate the non-controlling interest balance in FG's consolidated statement of financial position at 31 December 20X5.
Give your answer to nearest whole $.
Answer:
Explanation:
$32600
NEW QUESTION # 81
Which one of the following is NOT a step in the development of an International Financial Reporting Standard (IFRS)?
- A. Establishment of an advisory committee to advise on issues arising in the development of the IFRS.
- B. Publication of exposure drafts.
- C. Production of draft interpretations of the IFRS which are open to public comment.
- D. Publication of discussion documents.
Answer: C
NEW QUESTION # 82
Which THREE of the following are included within an entity's statement of profit or loss?
- A. Dividends paid
- B. Impairment loss
- C. Dividends revived
- D. Finance income
- E. Revaluation surplus
Answer: B,C,D
NEW QUESTION # 83
The tax rules in a country state that all tax returns must be filed by 31 March each year and that any outstanding tax balance must be paid by 14 April each year. An entity filed its tax return on 10 April
20X2 and paid the outstanding tax on 20 April 20X2.
Which TWO of the following powers is the tax authority likely to have in respect of these actions by the entity?
- A. Charge interest for non-payment of the outstanding tax balance between 10 April 20X2 and 20 April
20X2. - B. Charge a fixed penalty for late submission of the tax return.
- C. Charge interest for non-payment of the outstanding tax balance between 14 April 20X2 and 20 April
20X2. - D. Seize the assets of the entity.
- E. Charge interest for non-payment of the outstanding tax balance between 31 March 20X2 and 20 April
20X2.
Answer: B,C
NEW QUESTION # 84
Company R use a defined benefit plan pension scheme. Employee UW has been working for Company R for 25 years. The defined benefit plan is 1.5% of the employee's annual salary during their time at the company, for every year of employment.
Employee UW started on a £18,000 per annum salary. After 10 years of employment. Employee UW received a promotion and began earning £22,000. After another 3 years of employment. Employee UW got promoted to a wage of £35,000, and is still on this salary now. How much pension has Employee UW accumulated since working at Company R?
- A. £9,900
- B. £9,375
- C. £6,750
- D. £18,000
Answer: A
NEW QUESTION # 85
Country J is a newly formed independent country and it's accounting professionals are considering adopting international financial reporting standards (IFRS).
Which of the following is a disadvantage to Country J of adopting IFRS as their local generally accepted accounting practice (GAAP)?
- A. IFRS are quick to implement which reduces the costs involved.
- B. Specific local variations that might be needed will not be accommodated.
- C. Facilitates comparability with other countries who use IFRS as their local GAAP.
- D. Easier to adopt standards which have already been developed.
Answer: B
NEW QUESTION # 86
Which THREE of the following are part of the International Accounting Standards Committee (IASC) Foundation structure?
- A. Standards Advisory Council
- B. International Financial Reporting Evaluations Committee
- C. International Financial Reporting Interpretations Committee
- D. International Organisation of Securities Commission
- E. Standards Application Council
- F. International Accounting Standards Board
Answer: A,C,F
NEW QUESTION # 87
EF has been offering its customers a 60 day credit period, but now wants to improve its cash flow.
EF is proposing to offer a 2% discount for payment in 15 days.
Assume a 365 day year and an invoice value of $100.
Which of the following is the effective annual interest rate EF will incur for this action?
- A. 13.1%
- B. 17.8%
- C. 63.4%
- D. 35.4%
Answer: B
NEW QUESTION # 88
The tax rules in a country state that all tax returns must be filed by 31 March each year and that any outstanding tax balance must be paid by 14 April each year. An entity filed its tax return on 10 April 20X2 and paid the outstanding tax on 20 April 20X2.
Which TWO of the following powers is the tax authority likely to have in respect of these actions by the entity?
- A. Charge interest for non-payment of the outstanding tax balance between 10 April 20X2 and 20 April
20X2. - B. Charge a fixed penalty for late submission of the tax return.
- C. Charge interest for non-payment of the outstanding tax balance between 14 April 20X2 and 20 April
20X2. - D. Seize the assets of the entity.
- E. Charge interest for non-payment of the outstanding tax balance between 31 March 20X2 and 20 April
20X2.
Answer: B,C
NEW QUESTION # 89
A specialized product was commissioned by a customer and the agreed price was $38,000. The product was completed at a cost of $34,000.
It was then discovered that new regulations meant that the specialized product now failed health and safety requirements. The specialized product had to be modified to meet the new regulations at a cost of $9,000. The customer agreed to pay an extra $3,000 towards the modifications.
At 31 December 20X5 the specialized product was still in inventory and had not been modified.
Calculate the value of the specialized product that should be included in inventory as at 31 December
20X5.
Give your answer to the nearest whole $000.
Answer:
Explanation:
$32000
NEW QUESTION # 90
LM is preparing its cash forecast for the next three months.
Which of the following items should be left out of its calculations?
- A. Tax payment due, that relates to last year's profits.
- B. Receipt of a new bank loan raised for the purpose of purchasing new machinery.
- C. Rental payment on a leased vehicle.
- D. Expected loss on the disposal of a piece of land.
Answer: D
NEW QUESTION # 91
DEF is considering introducing a Pay-As-You-Earn (PAYE) system but unsure of the advantages of using it.
Which of the following statements are advantages from the employees perspective of an entity using a PAYE system for collecting taxes from employees.
Select ALL that apply.
- A. The employee does not have to complete a self assessment tax return.
- B. The employee does not have to budget for their tax payments because the tax is deducted at source.
- C. The employee will avoid being charged penalties for paying late.
- D. The employee will be able to deal with tax authority directly to make payments.
- E. The employee will calculate their own tax payment.
Answer: A,B,C
NEW QUESTION # 92
FG purchased 40% of the equity shares of QR and exerted significant influence over the board of the directors.
QR will be classified as____of FG.
Answer:
Explanation:
NEW QUESTION # 93
An entity has a number of subsidiary and associate investments.
Which of the following must be disclosed in the entity's separate financial statements if it is exempt from presenting consolidated financial statements?
- A. A list of its top ten shareholdings including number of shares held and their market value.
- B. A copy of the summarised financial statements of each of its subsidiaries.
- C. A list of all its significant investments in subsidiaries and associates which includes the date of acquisition and the price paid.
- D. The bases on which significant investments in subsidiaries and associates have been accounted for in those separate financial statements.
Answer: D
NEW QUESTION # 94
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