This quiz works best with JavaScript enabled. Home > Accounting > Financial Reporting > Financial Reporting – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Deferred Tax on actuarial gain of gratuity is created through: A) Profit and Loss Account. B) Profit and Loss appropriation account. C) Other Comprehensive Income. D) None of above. Show Answer Correct Answer: C) Other Comprehensive Income. 2. The following are assets in a long-term liability account, except A) Deferred tax liabilities. B) Employee benefits liabilities. C) Long-term debt that matures in 1 year. D) Rent payable-minus current portion. Show Answer Correct Answer: C) Long-term debt that matures in 1 year. 3. The function of Financial Reporting Foundation (FRF) are:i. To review the performance of the MASBii. To be responsible for the financing arrangements and operations of the MASBiii. to perform any other function as the Minister may prescribe by order published in the Gazette. Without limiting the generality of functions of the FRF in subsection iv. to provide its views to the MASB on any matter which the MASB seeks to undertake or implement in relation to the MASB's functions under section 7 of the Act A) I and ii. B) Iii and iv. C) I, ii, and iv. D) All above. Show Answer Correct Answer: D) All above. 4. Jacob, Rosie, and Isabella are studying for their business exam. They come across a financial statement that provides information about a company's assets, liabilities, and shareholders' equity. What is this statement called? A) Balance Sheet. B) Statement of Financial Position. C) Cash Flow Statement. D) Statement of Income. Show Answer Correct Answer: A) Balance Sheet. 5. What were the ISAs that were used in case 2 to decide the type of audit opinion to be issued by the auditing firm? A) ISA 315 and 330. B) ISA 700 and 705. C) ISA 240 and 250. D) ISA 530 and 580. Show Answer Correct Answer: B) ISA 700 and 705. 6. Information that allows users to know whether amounts owed to them will be paid, is an aspect of financial statements that is the focus of users of these financial statements: A) Investor. B) Government. C) Employee. D) Suppliers and other business creditors. Show Answer Correct Answer: D) Suppliers and other business creditors. 7. What is the limit of number of directors in a public company? A) 20. B) 15. C) 10. D) 3. Show Answer Correct Answer: C) 10. 8. Term to describe the amount of an expense due in an accounting period which is unpaid at the end of that period A) Prepayment. B) Expense. C) Accrual. D) Unpaid income. Show Answer Correct Answer: C) Accrual. 9. Disadvantages of Harmonization: A) Significant differences in current standards and the political burden of eliminating differences. B) Overcoming "Nationalism" and tradition and May not provide significant benefits. C) Will cause "Standards Overload" for some companies and varying Standards that can be accepted from different places. D) A, B, C are all true. Show Answer Correct Answer: D) A, B, C are all true. 10. The adjusting entry to record an accrued revenue results in which of the following types of accounts being debited and credited? A) Asset/Revenue. B) Asset/Liability. C) Expense/Asset. D) Expense/Liability. Show Answer Correct Answer: A) Asset/Revenue. 11. Arthur, Florence, and Max are studying for their business exam. They come across a question about financial statements. They want to know which financial statement provides information about a company's sources of income and expenses. Can you help them? A) Balance Sheet. B) Statement of Financial Position. C) Cash Flow Statement. D) Statement of Income. Show Answer Correct Answer: D) Statement of Income. 12. Interest paid is classified as an operating cash flow under: A) US GAAP but may be classified as either operating or investing cash flows under IFRS. B) IFRS but may be classified as either operating or investing cash flows under US GAAP. C) US GAAP but may be classified as either operating or financing cash flows under IFRS. D) None of above. Show Answer Correct Answer: C) US GAAP but may be classified as either operating or financing cash flows under IFRS. 13. Listed below are some characteristics of financial information.1. Relevance2. Consistency3. Faithful representation4. AccuracyWhich TWO of these are qualitative characteristics of financial information according to the IASB'sConceptual Framework for Financial Reporting? A) 1 and 2. B) 2 and 4. C) 3 and 4. D) 1 and 3. Show Answer Correct Answer: D) 1 and 3. 14. A receivables ledger control account had a closing balance of $ 8, 500. It contained a contra to the payables ledger of $ 400, but this had been entered on the wrong side of the control account.What should be the correct balance on the control account? A) $ 7, 700 debit. B) $ 8, 100 debit. C) $ 8, 400 debit. D) $ 8, 900 debit. Show Answer Correct Answer: A) $ 7, 700 debit. 15. An expenditure which benefits only the current period is known as: A) Revenue expenditure. B) Capital expenditure. C) Current expenditure. D) Deferred expenditure. Show Answer Correct Answer: A) Revenue expenditure. 16. What is a possible danger if politics plays too big a role in developing IFRS? A) Financial reporting standards that are issued that are not truly generally accepted. B) Individuals may influence the standards. C) User groups become active. D) The IASB delegates its authority to elected officials. Show Answer Correct Answer: A) Financial reporting standards that are issued that are not truly generally accepted. 17. Which of the following are not enhancing qualitative characteristics of useful financial information as identified in The Conceptual Framework?Item 1 PredictiveItem 2 InfluencingItem 3 ComparableItem 4 Relevance A) I, II, and III only. B) I, II and IV only. C) I, III and IV only. D) II, III and IV only. Show Answer Correct Answer: B) I, II and IV only. 18. Which statement is incorrect regarding the Conceptual Framework for Financial Reporting? A) Serves as a guide in developing future PFRSs. B) Serves as a guide in resolving accounting issues that are not addressed directly in existing PFRSs. C) Is not a PFRS and hence does not define standards for any particular measurement or disclosure issue. D) Prevails in cases where there is conflict with a PFRS. Show Answer Correct Answer: D) Prevails in cases where there is conflict with a PFRS. 19. Which of the following elements of financial statements is most closely related to measurement of financial position? A) Equity. B) Income. C) Expenses. D) None of above. Show Answer Correct Answer: A) Equity. 20. Revenue is recognized in the accounting period in which the settlement of the obligation has been carried out/fulfilled A) Correct. B) Salah. Show Answer Correct Answer: A) Correct. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Reporting Quiz 1Financial Reporting Quiz 2Financial Reporting Quiz 4Financial Reporting Quiz 5Financial Reporting Quiz 6Financial Reporting Quiz 7Financial Reporting Quiz 8Financial Reporting Quiz 9Financial Reporting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books