Question 1

Where is "Cash flows related to taxation" usually categorized under IFRS?
A)Operating Activities
B)Investing Activities
C)Financing Activities

Accepted Answer

Cash flows related to taxation are typically categorized under operating activities in IFRS. This includes cash received from or paid for income taxes.

Question 2

Which of the following enhance qualitative characteristics of a financial report?
A)Comparability
B)Verifiability
C)Timeliness
D)Understandability
E)All of the above

Accepted Answer

All of the listed characteristics enhance the qualitative qualities of a financial report. Comparability refers to the ability to compare financial information between different periods or organizations. Verifiability ensures that the reported information can be verified through independent sources. Timeliness means that the information is provided in a timely manner. Finally, understandability ensures that the information is presented in a clear manner so that users can easily understand the financial report.

Question 3

Which of the following statements about fair value is not correct?
A)Fair values are relevant because they reflect conditions relating to economic resources and obligations,under which financial statement users will make decisions
B)Fair values are neutral because they are unbiased
C)Fair values have predictive value because they help predict future cash flows of interest to investors in valuing equity
D)Fair values are not consistently applied because they reflect the same type of information every period

Accepted Answer

Fair values can change from period to period and may not reflect the same type of information consistently. This is because fair values are based on market conditions and can fluctuate over time. Therefore, statement D is not correct.

Question 4

IFRS applies to which type of entities?
A)Governmental entities
B)Profit-oriented entities
C)Not-for-profit entities
D)All of the above

Accepted Answer

IFRS applies to profit-oriented entities, including publicly traded companies and large private companies. It does not apply to governmental or not-for-profit entities.

Question 5

Which of the following is not included in the income statement?
A)Finance costs
B)Share of profit and loss from equity method
C)Extraordinary operations
D)Tax expense

Accepted Answer

Extraordinary operations are not included in the income statement because they represent unusual and infrequent events, such as natural disasters or expropriations, and are not considered part of the regular business operations. Accounting standards typically require these items to be reported separately from the normal operations to ensure the income statement reflects the ongoing business performance.

Question 6

Which of the following statements is correct?
A)IFRS issued by the IASB currently consist of eleven standards issued since the formation of the IASB in 2001.
B)IAS issued by the IASC from its beginning in 1971 that have not been superseded by the IFRS.Currently of the original forty-one IAS,ten are still in effect.
C)Financial statements can be described as complying with IFRS as long as they comply with two out of the whole requirements of IFRS.
D)Interpretations originated by the IFRIC or its predecessor,the SIC.Currently,sixteen IFRIC and eleven SIC are still in effect.

Accepted Answer

The answer of Which of the following statements is correct?
A)IFRS...

Question 7

Of the following,what information is not provided by reporting entities in their financial statements?
A)Economic resources
B)Claims against the reporting entity
C)The effects of transactions
D)Projections of future financial information

Accepted Answer

Financial statements report historical financial information and do not include projections of future financial information.

Question 8

Does IFRS allow for the presentation of extraordinary items or gains and losses as a separate element of the income statement and the inclusion of "deferred tax assets/liabilities under current assets and current liabilities?
A)Yes,Yes
B)Yes,No
C)No,Yes
D)No,No

Accepted Answer

IFRS does not allow for the presentation of extraordinary items in the income statement, as it considers all items to be part of ordinary activities. Additionally, deferred tax assets and liabilities are not classified as current under IFRS but are presented as non-current items.

Question 9

Which following characteristics would a perfectly faithful representation have?
A)Completeness
B)Neutrality
C)Free from error
D)All of the above

Accepted Answer

A perfectly faithful representation would have all of the above characteristics - completeness, neutrality, and free from error.

Question 10

Which of the following is not a component of the Conceptual Framework for Financial Reporting?
A)Objective of general purpose financial statements
B)Presentation and disclosure
C)Legitimacy and rationality
D)Recognition and measurement

Accepted Answer

Legitimacy and rationality are not components of the Conceptual Framework for Financial Reporting. The components are Objective of general purpose financial statements, Qualitative characteristics of useful financial information, Elements of financial statements, Recognition and measurement, and Presentation and disclosure.

Question 11

Financial statements are directed towards the informational needs of the following capital providers except:
A)current investors
B)potential investors
C)creditors and other lenders
D)regulators,employees,and taxing authorities

Accepted Answer

Financial statements are primarily directed towards meeting the informational needs of capital providers who are interested in assessing the entity's ability to provide a return on their investment. Therefore, regulators, employees, and taxing authorities are not considered as capital providers, and financial statements are not primarily directed towards meeting their informational needs.

Question 12

Which following components in the Framework overrides specific standards?
A)Objective of general purpose financial statements
B)Qualitative characteristics
C)Recognition and measurement
D)Presentation and disclosure
E)None of the above

Accepted Answer

The components listed (Objective of general purpose financial statements, Qualitative characteristics, Recognition and measurement, Presentation and disclosure) are all integral parts of the framework that work together to guide the preparation and presentation of financial statements. None of these components is designed to override specific standards; instead, they provide the foundation and principles upon which specific accounting standards are developed.

Question 13

Which of the following values related to relevance do financial information have?
A)Predictive value
B)Confirmative value
C)Materiality
D)All of the above

Accepted Answer

Financial information can have predictive value (helping users forecast future outcomes), confirmative value (helping users check whether their expectations are correct), and materiality (being significant enough to influence the economic decisions of users). Therefore, all options are correct.

Question 14

Does IFRS include non-cash investing and financing activities in the statement of cash flows?
A)Yes
B)No

Accepted Answer

Under IFRS, non-cash investing and financing activities are not included in the statement of cash flows. Instead, they are disclosed elsewhere in the financial statements, typically in the notes.

Question 15

Which of the following is not included in financial statements?
A)Statement of financial position
B)Statement of comprehensive income
C)Accounting standards and notes from management
D)Statement of changes in equity

Accepted Answer

Accounting standards and notes from management are not considered as part of financial statements themselves, but rather are supplementary information provided alongside the statements to help users understand the information presented. The other options, statement of financial position, statement of comprehensive income, and statement of changes in equity, are all considered part of financial statements.

Question 16

IFRS' statement of comprehensive income shows the following categories:
A)Profit or loss)
B)List of items of comprehensive income
C)Total comprehensive income
D)All of the above

Accepted Answer

The statement of comprehensive income under IFRS shows both the profit or loss (A) as well as a list of items of comprehensive income (B), which can include items such as unrealized gains or losses on investments or foreign currency translation adjustments. The total comprehensive income (C) is then calculated as the sum of the profit or loss and the items of comprehensive income. Therefore, all of the above options are included in the statement of comprehensive income under IFRS.

Quiz 2: IFRS Conceptual Framework and Financial Statements

Where is "Cash flows related to taxation" usually categorized under IFRS?

Which of the following enhance qualitative characteristics of a financial report?

Which of the following statements about fair value is not correct?

IFRS applies to which type of entities?

Which of the following is not included in the income statement?

Which of the following statements is correct?

Of the following,what information is not provided by reporting entities in their financial statements?

Does IFRS allow for the presentation of extraordinary items or gains and losses as a separate element of the income statement and the inclusion of "deferred tax assets/liabilities under current assets and current liabilities?

Which following characteristics would a perfectly faithful representation have?

Which of the following is not a component of the Conceptual Framework for Financial Reporting?

Financial statements are directed towards the informational needs of the following capital providers except:

Which following components in the Framework overrides specific standards?

Which of the following values related to relevance do financial information have?

Does IFRS include non-cash investing and financing activities in the statement of cash flows?

Which of the following is not included in financial statements?

IFRS' statement of comprehensive income shows the following categories: