This quiz works best with JavaScript enabled. Home > Accounting > Financial Reporting > Financial Reporting – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. On 31 December 2021. a company issued a $ 30 000 180-day note at 8 percent, using the cash received to pay for inventory, and issued $ 110 000 long-term debt al 11 percent annually, using the cash received to pay for new equipment. Which of the following most accurately reflects the combined effect of both transactions on the company's cash flows for the year ended December 31 2021 under IFRS? Cash flows from: A) Operations are unchanged. B) Financing increase $ 110, 000. C) Operating decrease $ 30, 000. D) None of above. Show Answer Correct Answer: B) Financing increase $ 110, 000. 2. Closing entries are made at the end of the fiscal period so that: A) The balance sheet will be up to date. B) The Capital account will be up to date. C) The income statement accounts will begin the next fiscal period with a zero balance. D) Both b) and c). Show Answer Correct Answer: D) Both b) and c). 3. These are those intended to meet the needs of users who are not in a position to demand reports tailored to meet their particular information needs. A) General Purpose Financial Statements. B) Special Purpose Financial Statements. C) All Purpose Financial Statements. D) None of above. Show Answer Correct Answer: A) General Purpose Financial Statements. 4. Which of the following statements is most likely not true regarding standards for interim reporting? A) Declines in inventory value should be deferred to future interim periods. B) Use of the gross margin method for computing cost of goods sold must be disclosed. C) Costs and expenses not directly associated with interim revenue must be allocated to interim periods on a reasonable basis. D) Gains and losses that arise in an interim period should be recognized in the interim period in which they arise if they would not normally be deferred at year-end. Show Answer Correct Answer: A) Declines in inventory value should be deferred to future interim periods. 5. Calculate Networth for the purpose of determining applicability of Ind AS in case of NBFC:Securities Premium:70 crores Deferred Expenditure:30 crores Capital reserve out of promoters contribution:20 crore Revaluation Reserve:10 crore A) 100 crore. B) 60 crore. C) 70 crore. D) 130 crore. Show Answer Correct Answer: B) 60 crore. 6. Benefits of Global GAAP Harmonization A) Capital markets have become broader, and capital investment can move throughout the world without any obstacles. B) High-quality financial reporting standards are used consistently throughout the world and improve efficiency in capital allocation. C) Investors can make better investment decisions, portfolios will be more diverse and financial risks will be reduced. D) Companies can improve the strategic decision making process in the field of mergers and acquisitions. E) A, B, C, D Benar. Show Answer Correct Answer: E) A, B, C, D Benar. 7. The main objectives of the IASB Framework are A) To present information that is useful for decision making. B) To falsify information that is useful for decision making. C) To distort information that is useful for decision making. D) To prevent information that is useful for decision making. Show Answer Correct Answer: A) To present information that is useful for decision making. 8. Companies do not use fair value because market value = expense recognition is not available A) Correct. B) Salah. Show Answer Correct Answer: B) Salah. 9. A business purchased a motor car on 1 July 20X3 for $ 20, 000. It is to be depreciated at 20 per cent per year on the straight line basis, assuming a residual value at the end of five years of $ 4, 000, with a proportionate depreciation charge in the years of purchase and disposal. The $ 20, 000 cost was correctly entered in the cashbook but posted to the debit of the motor vehicles repair account.How will the business profit for the year ended 31Desember 20X3 be affected by the eror? A) Understated by $ 18, 400. B) Understated by $ 16, 800. C) Overstated by $ 18, 400. D) Overstated by $ 16, 800. Show Answer Correct Answer: A) Understated by $ 18, 400. 10. Accrual accounting is used because A) Cash flows are considered less important. B) It provides a better indication of ability to generate cash flows than the cash basis. C) It recognizes revenues when cash is received and expenses when cash is paid. D) None of these answers are correct. Show Answer Correct Answer: B) It provides a better indication of ability to generate cash flows than the cash basis. 11. Which financial report content can be customized A) Slip. B) Policy. C) Prospect. D) Commission Inbox. Show Answer Correct Answer: A) Slip. 12. Which of these transactions requires an adjusting entry (debit) to Unearned Revenue? A) Revenue earned before being collected, when it is later collected. B) Revenue collected but not yet earned. C) Revenue earned but not yet collected. D) Revenue collected before being earned when it is later earned. Show Answer Correct Answer: D) Revenue collected before being earned when it is later earned. 13. The continuity concept is an idea that a business is separate and distinct from its owner/owners and from any other business. A) True. B) False. Show Answer Correct Answer: B) False. 14. What is not a service company is: A) Accounting firm. B) PPAT. C) Vehicle rental. D) Drugstore. Show Answer Correct Answer: D) Drugstore. 15. To be a faithful representation as described in the Conceptual Framework, information must be all of thefollowing, except A) Complete. B) Free from error. C) Confirmatory. D) Neutral. Show Answer Correct Answer: C) Confirmatory. 16. Which of the following has the highest authoritative support? A) International Financial Reporting Standards. B) International Accounting Standards. C) Interpretations of the IFRIC. D) Framework for Financial Reporting. Show Answer Correct Answer: A) International Financial Reporting Standards. 17. Every transaction that records both debit and credit entry is: A) Single entry system of book-keeping. B) Double Entry system of book-keeping. C) Cash basisof accounting. D) Accrual basis. Show Answer Correct Answer: B) Double Entry system of book-keeping. 18. In preparing opening statement of financial position, an entity is required to: A) Recognize all assets and liabilities. B) Derecognize all assets and liabilities required by PFRS. C) Measure all recognized assets and liabilities in compliance with PFRS. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. It shows the results of operation of the entity at the end of a particular period. A) Statement of Financial Operation. B) Statement of Financial Results of Operation. C) Statement of Financial Performance. D) None of above. Show Answer Correct Answer: C) Statement of Financial Performance. 20. When a reporting entity is not a legal entity and does not comprise only legal entities all linked by a parent-subsidiary relationship, the boundary of the reporting entity can contain an incomplete set of economic activities if that entity provides a description of how the boundary was determined A) True. B) False. Show Answer Correct Answer: B) False. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Reporting Quiz 1Financial Reporting Quiz 2Financial Reporting Quiz 3Financial Reporting Quiz 4Financial Reporting Quiz 5Financial Reporting Quiz 6Financial Reporting Quiz 7Financial Reporting Quiz 8Financial Reporting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books