This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Reporting > Financial Reporting – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Decision makers have various types of decisions, ways of discussing, information they already have previously or information obtained from other sources, and the ability to process information. The impact, for information to be useful, there must be a relationship between the user and the decisions made, which is often referred to as..... A) Relevant. B) Reliable. C) Easy to understand. D) Materiality. Show Answer Correct Answer: A) Relevant. 2. Your one year period begins on January 1st and ends December 31st. A) Accounting Period. B) Calendar Year. C) Fiscal Year. D) None of above. Show Answer Correct Answer: B) Calendar Year. 3. If there are standards that conflict with the conceptual framework of financial reporting, then the company in its accounting policies must...... A) Follows the conceptual framework. B) Follow applicable standards. C) Provide its own accounting policies. D) Does not follow standards or conceptual frameworks. Show Answer Correct Answer: B) Follow applicable standards. 4. ABC Co. has current assets of $ 50, 000 and total assets of $ 150, 000. ABC has current liabilities of $ 30, 000 and total liabilities of $ 80, 000. What is the amount of ABC's owner's equity? A) 20000. B) 120000. C) 30000. D) 70000. Show Answer Correct Answer: D) 70000. 5. Which ONE of the following statements correctly describes the contents of the Statement of Profit or Loss? A) A list of ledger balances shown in debit and credit columns. B) A list of all the assets owned and all the liabilities owed by a business. C) A record of income generated and expenditure incurred over a given period. D) A record of the amount of cash generated and used by a company in a given period. Show Answer Correct Answer: C) A record of income generated and expenditure incurred over a given period. 6. Which of the following statements is/are true?1.The IFRS Interpretations Committee is a forum for the IASB to consult with the outside world.2. The IFRS Foundation produces IFRSs. The IFRS Foundation is overseen by the IASB.3. One of the objectives of the IFRS Foundation is to bring about convergence of national accountingstandards and IFRSs. A) 1 and 3 only. B) 2 only. C) 2 and 3 only. D) 3 only. Show Answer Correct Answer: D) 3 only. 7. COMPUTATIONALVilo Corp. has estimated that total depreciation expense for the year ending December 31, 20X6, will amount to P60, 000, and that 20X6 year-end bonuses to employees will total P120, 000. In Vilo's interim income statement for the six months ended June 30, 20X6, what is the total amount of expense relating to these two items that should be reported? A) 180, 000. B) 90, 000. C) 0. D) 30, 000. Show Answer Correct Answer: B) 90, 000. 8. What is "expectation gap" ? A) The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do. B) The difference between what the public thinks the accountant should do and what Congress says the accountant should do. C) The difference between what the public thinks the accountant should do and what the accountant thinks they can do. D) The difference between what the accountant should do and what the Courts say the accountant should be doing. Show Answer Correct Answer: C) The difference between what the public thinks the accountant should do and what the accountant thinks they can do. 9. Private Company which is a Subsidiary Company of Public Company shall be calculated as: A) Public Company. B) Private Company. C) Not calculated at all. D) None of these. Show Answer Correct Answer: A) Public Company. 10. Accumulated other comprehensive income will be presented in..... A) Statement of financial position in the equity section. B) Report comprehensive income in the other comprehensive income section. C) Statement of financial position in the long-term liabilities section. D) Income statement in the other comprehensive income statement section. Show Answer Correct Answer: A) Statement of financial position in the equity section. 11. The international financial reporting environment includes challenges in financial reporting including all of the following except A) Political environment. B) Decision-usefulness. C) Ethics. D) Expectations gap. Show Answer Correct Answer: B) Decision-usefulness. 12. Max, Samuel, and Eesha are studying for their business exam. They come across a question in their textbook:'What financial statement reports a company's assets, liabilities, and shareholders' equity?' Can you help them answer this? A) Balance Sheet. B) Statement of Income. C) Statement of Financial Position. D) Cash Flow Statement. Show Answer Correct Answer: A) Balance Sheet. 13. If an entity changes an accounting estimate during an interim period, the change shall be applied A) As at the beginning of that interim period where the change occurred. B) As at the beginning of the current year. C) As at the end of the current year. D) As at the end of the interim period where the change occurred. Show Answer Correct Answer: A) As at the beginning of that interim period where the change occurred. 14. Calculate Capital Adequacy Ratio:Tier I capital:50 crore Tier II capital:90 crore Risk weighted assets:250 crore Off balance sheet items:300 crores A) 46.67%. B) 9.09%. C) 16.36%. D) 25.45%. Show Answer Correct Answer: D) 25.45%. 15. Which statement is incorrect regarding prudence? A) Neutrality is supported by the exercise of prudence. B) Prudence is the exercise of caution when making judgments under conditions of uncertainty. C) Prudence does not allow for overstatement of assets, liabilities, income or expenses. D) Prudence allows for understatement of assets, liabilities, income or expenses. Show Answer Correct Answer: D) Prudence allows for understatement of assets, liabilities, income or expenses. 16. The primary users of general purpose financial reports are: A) Investors and lenders. B) Investors and customers. C) Employees and lenders. D) Investors and employees. Show Answer Correct Answer: A) Investors and lenders. 17. Expenses on the income statement may be grouped by: A) Nature, but not by function. B) Function, but not by nature. C) Either function or nature. D) None of above. Show Answer Correct Answer: C) Either function or nature. 18. Jones Company has been experiencing a lower-than-desired current ratio. To improve the current ratio, Jones Company should: A) Issue short-term debt to buy inventory. B) Issue short-term debt to finance additional fixed assets. C) Issue long-term debt to purchase fixed assets. D) Issue more capital stock to raise cash. Show Answer Correct Answer: D) Issue more capital stock to raise cash. 19. Select the statement that is most suitable to Bordereau A) Search components, statuses and numbering. B) Allows customer to access and manage their policies, quotes, claims and profile at convenience. C) A report provided by a re-insured company, detailing the losses or premiums affected by reinsurance. D) None of above. Show Answer Correct Answer: C) A report provided by a re-insured company, detailing the losses or premiums affected by reinsurance. 20. A company issues $ 1, 000, 000 face value of 10-year bonds on 1 January 2015when the market interest rate on bonds of comparable risk and terms is 5%. Thebonds pay 6% interest annually on 31 December. At the time of issue, the bondspayable reflected on the balance sheet is closest to: A) $ 926, 399. B) $ 1, 000, 000. C) $ 1, 077, 217. D) None of above. Show Answer Correct Answer: C) $ 1, 077, 217. 21. Which of the following IAS will be refer to learn about Cash flow statement: A) IAS 1. B) IAS 2. C) IAS 18. D) IAS 7. Show Answer Correct Answer: D) IAS 7. 22. Intangible assets with finite useful lives mostly differ from intangible assets withinfinite useful lives with respect to accounting treatment of: A) Revaluation. B) Impairment. C) Amortization. D) None of above. Show Answer Correct Answer: C) Amortization. 23. An entity is not prohibited from including in its condensed interim financial statements information that is more than the minimum line items or selected explanatory notes set out under PAS 34. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 24. ..... provide additional information and help clarify the items presented in the financial statements. A) Quotes to FS. B) Notes to FS. C) Words to FS. D) None of above. Show Answer Correct Answer: B) Notes to FS. 25. Financial Statements of corporation with total assets of Php 600, 000 needs to be audited by an independent certified public accountant. A) True. B) False. Show Answer Correct Answer: A) True. 26. If an entity does not prepare interim financial reports, then A) The year-end financial statements will not be acceptable under local legislation. B) The year-end financial statements' compliance with IFRS is not affected. C) Interim financial reports should be included in the year-end financial statements. D) The year-end financial statements are deemed not to comply with IFRS. Show Answer Correct Answer: B) The year-end financial statements' compliance with IFRS is not affected. 27. The decisions of the 'primary users' involve A) Buying equity and debt instruments. B) Selling or holding equity and debt instruments. C) Providing or settling loans and other forms of credit. D) All of the above. Show Answer Correct Answer: D) All of the above. 28. Items that will be held for more than a year ex:equipment, trucks, buildings A) Current Assets. B) Fixed Assets. C) Assets. D) Accounts Receivable. Show Answer Correct Answer: B) Fixed Assets. 29. You record your income when it is earned and expenses when they are incurred A) Cash Basis. B) Accrual Basis. Show Answer Correct Answer: B) Accrual Basis. 30. If the current cost measurement basis is used, assets are measured at: A) The amount paid to acquire them. B) Present value. C) The amount which could be obtained by selling them. D) Replacement cost. Show Answer Correct Answer: D) Replacement cost. Next →Related QuizzesAccounting QuizzesFinance QuizzesFinancial 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