Question 1

Under the Fourth Directive income statements may be presented:
A)Only horizontally by nature
B)Only vertically by function
C)Only horizontally by nature or by function
D)Either horizontally or vertically by nature or by function

Accepted Answer

According to the Fourth Directive, income statements can be presented either horizontally or vertically and by nature or by function. Therefore, option D is the best choice as it covers all the possible methods of presenting income statements.

Question 2

In terms of the balance sheet format the Fourth Directive;
A)Requires member states to prescribe the horizontal format
B)Requires member states to prescribe the vertical format
C)Does not require member states to prescribe either format
D)Requires member states to prescribe one or both of the two formats

Accepted Answer

The Fourth Directive allows member states the flexibility to prescribe either the horizontal or vertical format for balance sheets, or both, accommodating different accounting practices and preferences within the EU.

Question 3

Biological assets should be shown separately on the face of the balance sheet.

Accepted Answer

According to International Accounting Standard 41 (IAS 41), biological assets should be shown separately on the face of the balance sheet under the non-current assets category.

Question 4

An asset should be classified as a current asset even if it is restricted from being exchanged for at least 12 months after the accounting period.

Accepted Answer

An asset should be classified as a current asset only if it is expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer. If it is restricted from being exchanged for at least 12 months, it should not be classified as a current asset.

Question 5

The layout of the balance sheet is specified in greater detail in the EU 4^th Directive than in the IASs.

Accepted Answer

The EU 4^th Directive provides more specific instructions on the layout of the balance sheet than the International Accounting Standards (IASs).

Question 6

Under IAS,A 'statement of comprehensive income' has been mandatory since:
A)2009
B)2008
C)2007
D)2006

Accepted Answer

Since 2009, the International Accounting Standards (IAS) have required the presentation of a statement of comprehensive income, as part of the adoption of the IFRS (International Financial Reporting Standards).

Question 7

As a minimum requirement,which of the following is required to be shown as a separate line item on the balance sheet?
A)Property
B)Plant
C)Equipment
D)Investment property

Accepted Answer

Investment property must be shown as a separate line item on the balance sheet as required by International Financial Reporting Standards (IFRS). While the other options (property, plant, equipment) may also appear as separate line items, they are not required to be so by IFRS.

Question 8

Under IAS 1,if the conditions are broken on long term debt it should immediately be classified as a current liability.

Accepted Answer

According to IAS 1, if the conditions of a long-term debt are broken and the creditor has the right to demand repayment within 12 months of the balance sheet date, then it should be classified as a current liability regardless of the company's intentions to refinance or negotiate new terms.

Question 9

A non-current asset should continue to be classified as non-current:
A)Until it is decided that it will be sold
B)Until it is actually disposed of
C)For the duration of its originally defined useful life
D)Until it is fully depreciated

Accepted Answer

A non-current asset remains classified as such until it is actually disposed of. The decision to sell, the duration of its useful life, or its depreciation status does not change its classification.

Question 10

In the EU companies under a certain size may file abridged account.

Accepted Answer

In the EU, companies under a certain size may file abridged accounts, which means they can provide less detailed financial statements in their annual reports. This is designed to reduce the administrative burden on smaller businesses.

Quiz 10: Structure of Published Financial Statements

Under the Fourth Directive income statements may be presented:

In terms of the balance sheet format the Fourth Directive;

Biological assets should be shown separately on the face of the balance sheet.

An asset should be classified as a current asset even if it is restricted from being exchanged for at least 12 months after the accounting period.

The layout of the balance sheet is specified in greater detail in the EU 4th Directive than in the IASs.

Under IAS,A 'statement of comprehensive income' has been mandatory since:

As a minimum requirement,which of the following is required to be shown as a separate line item on the balance sheet?

Under IAS 1,if the conditions are broken on long term debt it should immediately be classified as a current liability.

A non-current asset should continue to be classified as non-current:

In the EU companies under a certain size may file abridged account.

The layout of the balance sheet is specified in greater detail in the EU 4^th Directive than in the IASs.