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Study Resources (Accounting)

21.Identifiable intangible assets are those intangible assets that:   A. have been purchased by the entity from external parties. B. have an unlimited life. C. can have a value placed on them separately from other assets of the entity. D. cannot be separately sold. 22.Examples of intangible assets include:   A. loyal customers. B. patents and trademarks. C. provisions. D. loyal customers, patents and trademarks. 23.Examples of elements of a.
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21.Features common to heritage assets are that they typically:   A. are unique, are aspects of the natural environment (for example, parks) and cannot be replaced. B. have no alternative use, cannot be replaced and generate negative net cash flows. C. are self-generating, individually unique and generate negative net cash flows. D. have no alternative use, cannot be replaced.
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41.Net present value (NPV) method has been considered as an alternative valuation technique to historical cost for biological assets. The NPV method may be described as:   A. an accounting method for projecting the revenues and expenses associated with an asset or entity. B. an economic concept based on the notion that an asset's value.
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21.The present obligation component of a liability must be based on:   A. a legal obligation only. B. a social obligation. C. a contractual obligation. D. none of the given answers. 22.What is the treatment of contingent liabilities in the financial statements?   A. Contingent liabilities are to be recognised as a separate category in the statement of financial position, with a clear.
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1.Concept of control is problematic for heritage assets but not so for biological assets.  2.AASB 101 requires heritage assets to be disclosed separately on the statement of financial position. 3.In accordance with AASB 141 Agriculture, biological assets may be classified as part of property, plant and equipment in the statement.
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21.According to the AASB Framework an asset should have a number of characteristics, including:  A. It must be owned by the entity. B. It must be expected to provide future economic benefits to the entity. C. The transaction giving rise to the ownership must have already occurred. D. The future economic benefits must be very likely to eventuate. 22.The.
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51.How should borrowing costs relating to an asset being constructed over a substantial period of time be treated in the accounts?   A. expensed as incurred B. capitalised and amortised over the period of the construction of the asset C. accrued and amortised over the period of the loan D. capitalised as part of the cost of the asset 52.Golden.
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51.AASB 116 permits which of the following with respect to measurement of non-current assets using revaluation model?   A. Net revaluation decrements for each class of asset are initially debited to asset revaluation reserve. B. Use of cost model to measure other assets in the same class. C. All increments arising from revaluation are credited to asset.
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61.A non-current asset, for example, a building, has the following information available for valuation at balance date: Depreciable amount $50 000Accumulated depreciation $10 000Residual value $5 000Recoverable amount $35 000Value in use $80 000Which amount should be the carrying amount of this asset at balance date?   A. $5000 B. $35 000 C. $40 000 D. $80 000 62.Which of.
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61.Las Vegas Ltd sells second hand luxury cars of various makes and models, and uses the FIFO cost flow assumption to ascertain the cost of ending inventory. This would be incorrect because:   A. this is not the practice used by other car dealerships. B. this method will overstate profit. C. this method will not capture unique.
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31.Arguments for the use of financial valuations of heritage assets to fulfil the accountability and performance evaluation functions of accounting statement preparation include:   A. The funds contributed to government departments cannot be effectively tracked unless valuations of heritage assets are included in financial statements. B. Managers of heritage assets need to ensure that they.
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41.AASB 101 requires, as a minimum, certain line items to be included on the face of the statement of financial position . Additional line items may be disclosed based on an assessment of:   A. the nature and liquidity of assets. B. the functions of the assets within the entity. C. the amounts, nature and timing of.
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21.Which of the following is not a definition in AASB 102 on inventories?   A. Assets in the form of materials or supplies to be consumed in the production process. B. Assets in the process of production for sale. C. Raw materials to be used in maintaining machines that prepare goods for sale. D. Assets held for sale in.
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51.Which of the following statements is correct with respect to accounting for biological assets as required in AASB 141?   A. A biological asset may initially be recognised at cost when market-determined prices or value are not available and for which alternative estimates of fair value are not available. B. If a biological asset is.
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51.Pursuant to AASB 116, what is the carrying amount of an asset?   A. cost less accumulated depreciation B. cost or revalued amount less the accumulated depreciation and any accumulated impairment losses C. revalued amount less accumulated depreciation and any impairment losses D. cost or revalued amount less the accumulated depreciation 52.The company has a depreciable asset with a purchase.
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41.When debentures are issued at a discount:   A. the discount represents the cost of attracting the funds and should be recognised as an expense. B. no further entries are required because the discount is calculated prior to receipt of the funds and therefore will not be recorded. C. the effect interest method is used to calculate.
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61.The fact that a preference share is redeemable:   A. makes it a financial liability. B. makes it an equity instrument. C. makes it a compound financial instrument. D. does not automatically mean that it is a financial liability. Conditions and rights attaching to the share need to be considered before it can be classified as either a financial.
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61.Which of the following items are required to calculate ‘value in use' of an asset?   A. exit and entry prices B. purchase price and cost of disposal C. estimated net future cash flows and appropriate discount rate D. estimated net future cash flows 62.If an impairment loss recognised in prior periods for a revalued asset no longer exists, AASB.
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51.In disclosing liabilities, a reporting entity:   A. discloses on the basis of the current/non-current liability dichotomy. B. has a choice, based on the notions of relevance and reliability to disclose liabilities either on the basis of the current/non-current liability dichotomy or on the basis of order of liquidity. C. has a choice, based on the principle.
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51.As part of adopting IFRS, goodwill acquired in a business combination is no longer amortised. Instead, the acquirer shall test goodwill for impairment (AASB 3 Business Combinations). When is goodwill considered to be impaired?   A. If the recoverable amount of the cash generating unit is greater than the unit's carrying amount. B. If the.
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11.Development costs are less likely to meet the test for deferral than research costs. 12.Compared to the requirement in the US, the treatment of research and development costs in Australia is less conservative (that is, likely to result in higher profits). 13.AASB 138 requires that all intangibles, whether purchased or.
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61.Which of the following statements is a valid reason to select cost model over the revaluation model?   A. to report relevant information B. to reduce taxes C. to properly match costs with expenses D. to simplify the measurement accounting policy 62.Brahms Ltd acquired a property of land and building for $1.5 million. Management estimates the value of land to.
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1.AASB 102 Inventories applies to biological assets related to agricultural activity.  2.The first-in, first-out (FIFO) method assumes that items remaining in inventory at the end of the period are those most recently purchased or produced. 3.In periods where production costs or purchase prices of inventory items do not change, it.
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21.Depreciation is required because it is generally accepted that:   A. Assets will decrease in value over time. B. The economic benefits of an asset will not last indefinitely. C. Wear and tear on an asset must be recorded as an expense. D. Even though land may go up in value its cost needs to be recognised as an.
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31.Heritage assets have characteristics that create doubt about whether or not they satisfy the definition of an asset. These characteristics include:   A. They are not expected to generate net economic benefits. B. They never generate cash inflows. C. They are unlikely ever to be sold. D. They are not expected to generate net economic benefits and they are.
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11.For an asset to be recognised, it is required to possess a cost or other value that can be measured exactly. 12.Advertising expenditures are typically expensed as incurred because the future economic benefits are uncertain to occur. 13.The preserved body of famous Australian racehorse Phar Lap is an example of a heritage.
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41.When an item of property, plant and equipment is derecognised the treatment of any asset revaluation reserve that relates to an asset include:    A. debiting the asset revaluation reserve in the journal entry to record the profit or loss on sale of the asset. B. transferring the relevant amount out of the.
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21.A class of non-current assets as defined by AASB 116 is a category of non-current assets that:   A. were all purchased at the same time by the reporting entity. B. all have a similar nature or function in the operations of the entity. C. are disclosed as a single item without supplementary dissection in the financial.
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11.A necessary condition for a provision to be recognised is that there is a legal obligation to make a future sacrifice of economic benefits 12.Some researchers have found that firms can benefit from being in financial distress. 13.In terms of accounting treatment debentures and bonds are the same thing. 14.A.
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31.Some research has shown that being in financial distress may not be all bad news for an entity because:   A. Investors will see this as an opportunity to buy into a company that can really only improve. B. Existing managers will want to be released from their contracts allowing new ideas to be employed. C. There.
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1.In accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets some present obligations are allowed to be disclosed in the notes to the financial statements.  2.In a constructive obligation where the entity retains discretion to avoid any future sacrifice of economic benefits, no liability should be recognised in the.
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11.Depreciation of an asset is required when market value accounting is applied on a non-current asset. 12.AASB 116 allows capitalisation of items of plant and property because these are considered prepayments. 13.Depreciation expense is always recognised in profit and loss. 14.The depreciable base is the cost of a depreciable asset,.
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61.Which of the following items are not within the scope of AASB 141 Agriculture?   A. pigs B. carcass C. sausages D. cattle 62.Margaret Ltd has a vineyard and at the end of reporting period 30 June 2012 the following information is available: What is the change in fair value less estimated point-of-sale costs of the vines.
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1.Intangible assets that are amortised are no longer subjected to impairment testing.  2.Research of market potential prior to the launch of a product is permissible to be capitalised as an intangible asset. 3.Internally generated brands, mastheads, publishing titles and customer lists are permitted to be recognised as intangible assets. 4.AASB.
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