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Study Resources (Accounting)

11.The tax figure calculated and recorded on the statement of comprehensive income is an accurate reflection of the entity's tax liability for the stated period. 12.The balance sheet approach to accounting for taxation relies on comparing the historical cost of an item with its appropriate tax base. 13.When the carrying.
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33.'Comprehensive income' refers to:   A. the statement of total recognised income and expense. B. the statement of changes in equity. C. the net profit figure shown at the bottom of the statement of comprehensive income. D. none of the given answers. 34.The notes to the accounts that relate to income and expense should include:   A. only commentary on issues covered by.
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22.Revenues may be generated by:   A. holding and disposing of inventory in the normal course of business. B. having a liability forgiven. C. receiving a donation. D. all of the given answers. 23.The general rule under modified historical-cost accounting is that holding gains on non-current assets should be:   A. treated as revenue in the period that the fair value of the.
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32.Under the approach of AASB 112 to accounting for income taxes, a deductible temporary difference creates which account?   A. deferred tax revenue B. deferred tax liability C. deferred tax asset D. provision for tax payable 33.Tissues Ltd has a depreciable asset that is estimated for accounting purposes to have a useful life of 8 years. For taxation purposes the.
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82.Describe the key issue for determining the existence of a financial asset or financial liability. How does ‘exchanging financial assets or financial liabilities with another entity under conditions that are potentially favourable or potentially unfavourable' help determine the classification of an instrument as an asset or liability?  83.Explain the reason for.
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43.Hicks' notion of income is that:   A. An individual's income is what they consume. B. An individual's income is the minimum value that they can consume during a period and still be as well off at the end as they were in the beginning. C. An individual's income is the difference between their revenues and expenses. D. An.
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70.How does AASB 101 define 'extraordinary items'? Discuss the current arrangements for accounting for such items.  72.What is a prior period error? How has the treatment of prior period errors changed from the former AASB 1018 to the current AASB 108? What is the major implication of this change?  .
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52.Transactions such as the purchase of assets or the issuance of debt are not considered income because:   A. they involve external parties. B. they necessarily involve cash. C. they do not result in an increase in equity. D. they both result in an increase of the asset or liability concerned. 53.Biological assets are:   A. recognised as income when sold. B. to be valued.
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23.AASB 132 defines a financial instrument as:   A. any commitment that gives rise to either a financial asset or a financial liability of the reporting entity. B. any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. C. any commitment that ultimately gives.
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33.The structure of futures contracts as they are traded in Australia is best described in which of the following?   A. All parties that trade in futures make a (relatively small) specific deposit before they enter into the contract. The contract is marked to market on a daily basis and gains on the.
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1.Unearned revenues are assets treated as liabilities, as these are received by a business for services to be performed at a future date.  2.Construction costs plus gross profit earned to date from a construction contract are accumulated in the construction in progress account less progress billings and these are disclosed.
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42.Digitor Industries Ltd accrues long-service leave as employees work towards their entitlement. For tax purposes, long-service leave is not deductible until it is paid. During the current period Digitor has accrued $50 000 in long-service leave expense and paid none. The tax rate is 30%. What is the journal entry.
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63.Which of the following statements are true? I. The initial measurement of financial assets is to be at fair value.II) The initial measurement of financial liabilities is to be at present value.III) The initial measurement of financial liabilities is to be at fair value.IV) The subsequent measurement of financial assets.
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70.Discuss the recognition principles required in AASB 2 when an entity issues a share-based transaction instrument that has vesting conditions? 71.Why are equity instruments in a share-based payment transactions modified? What is the accounting treatment for such modifications that is consistent with AASB 2? .
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33.Market prices for share options granted to employees are typically not available because:   A. Options granted to employees are subject to terms and conditions that do not apply to traded options. B. It is difficult to obtain the fair value of these options using option pricing models. C. Employee options have long lives and are usually.
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74.Discuss the accounting treatment prescribed by AASB 101 Presentation of Financial Statements for reclassification adjustments from components of other comprehensive income to profit and loss.  77.Discuss the impact changes in accounting policies can have on users of the financial statements.  .
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23.Which of the following items are considered share-based payment transactions within the scope of AASB 2?    A. share dividends to employees who are shareholders of the entity B. goods acquired from a supplier on credit to be settled in cash C. services provided by an employee to be settled in equity instruments D. purchase.
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42.In the case of a fixed price contract, AASB 111 specifies four conditions that must all be met in order for the percentage-of-completion method to be applied. These conditions include:   A. Costs related to the contract can be clearly identified and measured reliably. B. It is probable that the economic benefits arising from the.
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11.AASB 2 requires all share-based payment transactions to be measured at grant date. 12.If a grant of equity instruments is conditional upon satisfying specified vesting conditions, the vesting conditions shall be taken into account in estimating the fair value of the instruments at measurement date. 13.AASB 2 requires that goods.
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22.AASB 112 uses what term to describe the method for accounting for taxes that it mandates?    A. net balances method B. financial position method C. asset and liability method D. balance sheet method 23.The AASB 112 approach has been adopted because:   A. it matches the revenues earned with tax payable on those revenues. B. it is conservative. C. it is.
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11.The central issue in classifying a financial liability is the existence of a present obligation. 12.Once a financial instrument has been classified as a liability in the statement of financial position, under AASB 132 the reporting entity is not permitted to reclassify it unless a specific transaction or other specific.
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52.The balance sheet approach adopted in AASB 112:   A. will continue to be used as the alternatives are too simplistic. B. will only be understood by the very sophisticated financial readers. C. uses existing statement of financial position data thus reducing record keeping costs. D. will only be understood by the very sophisticated financial readers and uses existing.
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62.Which of the following statements is not in accordance with IASB (2011) Revenue from Contracts with Customers with respect to revenue recognition when right of return exists?    A. Revenue E Revenue recognition of the consideration for the transferred products to which the entity is reasonably assured to be entitled. B. when goods.
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63.Following are the items of income and expense recognised during the period by Murray Ltd: Which of the following combinations identify all items permitted in AASB 101 ‘Presentation of Financial Statements to be presented under other comprehensive income?    A. I, II, V and VI B. II, III, VI and.
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73.Which of the following items is not a financial instrument?   A. cash B. derivative instrument that is unfavourable to the entity C. goodwill D. trade accounts receivable 74.On 31 October 2012 Gordon Investment Ltd has a well diversified portfolio of shares that it is intending to sell in 3 months time. To hedge against the adverse movements in the.
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72.Are there parties that would benefit from the accounting requirements of AASB 2? Discuss. 74.Discuss the three main headings required to be disclosed by AASB 2 with respect to share-based payments. 75.Discuss why equity-settled share-based payments may also be issued with market conditions. .
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23.Different measurement models affect the determination of income and expenses. The different measurement models include:   A. historical cost, fair value, present value. B. historical cost, direct costs, indirect costs. C. current cost, historical cost, overhead cost. D. market value, opportunity cost, historical cost. 24.A statement displaying components of profit or loss is referred to in AASB 101 as a(n):   A. profit.
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1.If share appreciation rights vest immediately, the entity shall presume that the services rendered by the employees in exchange for the share appreciation rights have been received. 2.In share-based payment transactions with cash alternatives, the entity shall measure the equity component of the compound financial instrument as the difference between.
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53.Paragraph 98 of AASB 101 lists some circumstances that may give rise to separate disclosure of items of income and expense. They include:   A. reversals of inventory write-downs. B. extraordinary items. C. finance costs. D. distribution costs. 54.Components of ‘other comprehensive income' would include:    A. net profit reported in the statement of comprehensive income. B. net operating cash flows reported on.
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32.When the collectability of an amount that has been recorded as revenue becomes uncertain, the appropriate accounting treatment is to:    A. recognise as an expense the amount in respect of which recovery has ceased to be probable. B. calculate the discounted present value of the amount expected to be received and adjust.
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