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Study Resources (Accounting)

42.A redeemable preference share is one that may be:   A. converted into debt at the option of the shareholder. B. converted into cash at the option of either the company or the shareholder. C. forgiven any future calls where the company has profits in excess of specified levels. D. have any dividends converted into further preference shares rather.
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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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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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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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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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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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51.A lease involving land and buildings:   A. must be recorded as an operating lease as land has an indefinite life. B. requires two separate leases to be recorded, one for the land and another for the building. C. will still require a determination to be made as to whether the lease constitutes a finance or operating.
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22.Employee benefits include:   A. wages and salaries, sick leave, payroll tax, annual leave. B. superannuation, wages and salaries, sick leave and annual leave. C. sick leave, annual leave, unemployment benefits, salaries and wages. D. annual leave, wages and salaries, post-employment benefits, payroll tax. 23.An employee whose contract for service includes an entitlement to 1 week's cumulative sick leave per.
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1.As a residual interest, equity ranks after liabilities in terms of a claim against the assets of a reporting entity.  2.If a partly paid share issue is oversubscribed and the shares are allocated on a pro rata basis, the excess application monies must be refunded to all subscribers. 3.An allotment.
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21.The central accounting issue associated with leases is:   A. the timing of the recognition of the lease payments. B. whether or not the leased assets should be treated as assets of the lessee. C. the treatment of provisions for the repairs and maintenance on leased assets. D. the method of recording any commitment to guarantee the value of.
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62.Where there is a redemption of preference shares 'out of profit':   A. The redemption is recorded in the appropriations section of the profit and loss account. B. The redemption is recorded as an expense. C. The redemption is recorded as a liability and is amortised over a maximum of five years. D. The redemption is not recorded in.
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1.Contingent rent is included in the determination of minimum lease payments under AASB 117 Leases.  2.The discount rate to be used in calculating the present value of the minimum lease payments is the interest rate implicit to the lease, or if this is not practicable to do so, the lessor's.
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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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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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1.AASB 119 Employee Benefits prescribes that all obligations relating to wages and salaries, annual leave and sick-leave entitlements, regardless of whether they were expected to be settled within 12 months of the reporting date be measured at nominal (undiscounted) amounts.  2.In a long-service leave liability to an employee, a conditional.
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11.Non-vesting sick leave that has accumulated will be paid to employees when their employment ceases. 12.Long-service leave that is payable beyond 12 months after the financial year is to be measured at its present value. 13.Long-service leave must be accrued and recorded as a liability from the first day of.
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11.A non-cancellable lease, which transfers the risks and rewards associated with asset ownership, can still be terminated early with the permission of the lessor. 12.In the situation where there is an unguaranteed residual in a finance lease agreement, the leased asset will be recorded in the books of the lessee.
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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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62.Entity A contributes to a defined benefit superannuation plan for its employees. It calculates the following: The $786 represents:    A. the expense to be recognised in the statement of comprehensive income. B. the asset to be recognised in the statement of financial position. C. the liability to be recognised in.
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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.What discount rate does AASB 119 require to be used to discount estimated future cash outflows associated with the relevant employee entitlements?   A. risk-adjusted, organisation-specific discount rate B. market-determined, organisation-specific discount rate C. inflation adjusted, real rate of return required on equity financing D. the interest rate on high quality corporate bonds with terms to maturity that match.
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22.Double entry accounting requires that:    A. the claims held by external parties equal the claims held by the owners. B. the total assets of an entity equal the total of the claims held by external parties plus those claims held by the owners. C. the liabilities of the entity equal its total assets.
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41.Under AASB 117, operating leases require the following disclosures by lessees:   A. the total of future minimum sublease payments expected to be received under non-cancellable subleases at the statement of financial position date. B. a general description of the lessee's significant leasing arrangements. C. No disclosures are required as operating leases are expensed each year. D. the total.
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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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1.In a convertible note, AASB 132 Financial Instruments: Recognition and Measurement requires the holder of such a financial instrument to present the liability component and the equity component separately on the statement of financial position. 2.For a designated cash flow hedge, AASB 139 Financial Instruments: Recognition and Measurement requires the.
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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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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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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.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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52.AASB 119 defines 'employee benefits' as:    A. salaries and wages, and associated on-costs. B. all cash payments made to employees. C. all cash payments made to employees in their roles as employees. D. all forms of consideration given up by an entity in exchange for service rendered by employees. 53.A non-contributory superannuation fund means:.
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61.Paragraph 47 of AASB 117 requires that for a finance lease, the lessor must disclose:   A. the guaranteed residual values accruing to the lessor. B. unearned finance income. C. contingent rents recognised as expenses in the period. D. the guaranteed residual values accruing to the lessor and unearned finance income. 62.What characteristic(s) of land means that the lessee does.
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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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