This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Reporting > Financial Reporting – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 14 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An entity granted a share appreciation right to the CEO on January 1, 2022. After a 3-year service, the employee is entitled to receive a cash equal to the appreciation in share price over the market value on January 1, 2022. The market value on January 1, 2020 is the predetermined price for the purpose of determining the compensation. The share option right has the following terms:Service period-January 1, 2022-December 31, 2024Number of shares-100, 000Exercise date-January 1, 2025The quoted prices of the entity's share are:January 1, 2022-150December 31, 2022-155December 31, 2023-152December 31, 2024-160What is the debit entry on December 31, 2023? A) Salaries Expense 166, 667. B) Salaries Expense 33, 333. C) Salaries Expense 200, 000. D) Salaries Expense 500, 000. Show Answer Correct Answer: B) Salaries Expense 33, 333. 2. Which of the following is the principle that a company must recognize revenue in the period in which it is earned, it is not considered earned until a product or service has been provided? A) Full disclosure principle. B) Expense recognition (matching) principle. C) Revenue recognition principle. D) Cost principle. Show Answer Correct Answer: C) Revenue recognition principle. 3. US generally accepted accounting principles are currently developed by which entity? A) The Securities and Exchange Commission. B) The Financial Accounting Standards Board. C) The Public Company Accounting Oversight Board. D) None of above. Show Answer Correct Answer: B) The Financial Accounting Standards Board. 4. What is the primary purpose of financial reporting? A) To provide insights into a company's financial performance and position. B) To create competition among businesses. C) To assess employee satisfaction. D) To attract new customers. Show Answer Correct Answer: A) To provide insights into a company's financial performance and position. 5. Shareholders' equity reported on the balance sheet is most likely to differ fromthe market value of shareholders' equity because: A) Historical cost basis is used for all assets and liabilities. B) Some factors that affect the generation of future cash flows are excluded. C) Shareholders' equity reported on the balance sheet is updated continuously. D) None of above. Show Answer Correct Answer: B) Some factors that affect the generation of future cash flows are excluded. 6. An audit committee is A) Composed of internal auditors. B) Composed of members of the audit team. C) Composed of members of a company's board of directors who are not involved in the day-to-day operations of the company. D) A committee composed of persons not associating in anyway with the client or the boardof directors. Show Answer Correct Answer: C) Composed of members of a company's board of directors who are not involved in the day-to-day operations of the company. 7. Which of the following is not a contributory factor towards faithful representation? A) Completeness. B) Neutrality. C) Consistency. D) Freedom from error. Show Answer Correct Answer: C) Consistency. 8. George and Lily are studying for their business exam. Their tutor, Samuel, asks them, 'Which financial statement would you look at to find information about a company's cash inflows and outflows?' A) Balance Sheet. B) Cash Flow Statement. C) Statement of Financial Position. D) Statement of Income. Show Answer Correct Answer: B) Cash Flow Statement. 9. In case of prepayment of loan asset, the unamortised transaction cost is: A) Recorded as gain/loss on prepayment. B) Amortised over the original remaining period of loan asset. C) None of the above. D) None of above. Show Answer Correct Answer: A) Recorded as gain/loss on prepayment. 10. What is grant date? A) A date at which the entity and the counterparty agree to a share-based payment arrangement, being when the entity and the counterparty have shared understanding of the policies, terms, conditions and pre-existing contract of agreement. B) A date at which the entity and the counterparty agree to a share-based payment arrangement, being when the entity and the counterparty have shared understanding of the terms and conditions of the arrangement. C) A date at which the entity and the counterparty agree to a share-based payment arrangement, being when the entity and the counterparty have shared understanding of the policies, terms, conditions and pre-existing contract of agreement including the liason. D) None of the above. Show Answer Correct Answer: B) A date at which the entity and the counterparty agree to a share-based payment arrangement, being when the entity and the counterparty have shared understanding of the terms and conditions of the arrangement. 11. Of the accounts contained in the adjusted trial balance column in the work sheet as below, which will be included in the liabilities side of the Statement of Financial Position column? A) Prepaid insurance. B) Investment property. C) Non-current assets held for sale. D) Income received in advance. Show Answer Correct Answer: D) Income received in advance. 12. The following are Subsidiaries in SH Commercial & Trading, except A) Pertamina International Timor SA. B) PT. Archipelago Regas. C) PT Pertamina Lubricant. D) Pertamina International Marketing & Distribution. Show Answer Correct Answer: B) PT. Archipelago Regas. 13. How does the Conceptual Framework explain the role of stewardship? A) Providing information needed to assess management's stewardship is identified as an additional objective of financial reporting, equal in prominence to providing financial information useful to users in making decisions relating to providing resources to the entity. B) Decisions relating to providing resources to the entity depend on users' assessment of the amount, timing and uncertainty of the prospects for future net cash inflows to the entity and on their assessment of management's stewardship. C) Providing information needed to assess stewardship is more important than providing information needed to assess the prospects for future cash inflows to the entity. D) Financial reports are not intended to provide information needed to assess stewardship. Show Answer Correct Answer: B) Decisions relating to providing resources to the entity depend on users' assessment of the amount, timing and uncertainty of the prospects for future net cash inflows to the entity and on their assessment of management's stewardship. 14. Revenue should be recognized A) At the end of production. B) At the time of cash collection. C) When the performance obligation is satisfied. D) When realized. Show Answer Correct Answer: C) When the performance obligation is satisfied. 15. Refers to the allocation of the cost of the asset over its estimated useful life. A) Against the Asset. B) Deterioration. C) Consumption. D) Depreciation. Show Answer Correct Answer: D) Depreciation. 16. An entity is prohibited from publishing a complete set of financial statements in accordance with PAS 1 in its interim financial report. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 17. Below are the parties who need accounting information, especially in making decisions or company policies? A) Government. B) Employee. C) Investor. D) Creditor. Show Answer Correct Answer: C) Investor. 18. Rent paid in advance is an example of which of the following? A) Deferred Expense (Prepaid Expense). B) Accrued Expense. C) Deferred Revenue (Unearned Revenue). D) Accrued Revenue. Show Answer Correct Answer: A) Deferred Expense (Prepaid Expense). 19. It shows the changes in equity between two accounting periods reflecting the increase or decrease in the entity's net assets during the year. A) Statement of Changes in Net Assets/Equity. B) Statement of Net Assets. C) Statement of Equity. D) None of above. Show Answer Correct Answer: A) Statement of Changes in Net Assets/Equity. 20. GL Tie out reconciliation must be reviewed and approved prior to what submission? A) QSSA. B) QTBS. C) QBTS. D) QSSM. Show Answer Correct Answer: B) QTBS. 21. It is prepared after adjusting entries are made and posted in the ledger. A) Adjusted Trial Balance. B) Income Statement. C) Balance Sheet. D) Unadjusted Trial Balance. Show Answer Correct Answer: A) Adjusted Trial Balance. 22. The enhancing qualitative characteristics of financial information include: A) Comparability and understandability. B) Relevance and timeliness. C) Understandability and faithful representation. D) Relevance and faithful representation. Show Answer Correct Answer: A) Comparability and understandability. 23. The remaining equipment is Rp. 500, 000, in the Trial Balance there is an Equipment account of Rp. 800, 000 A) Supplies Expense (D) Rp. 300, 000 Supplies (K) Rp. 300, 000. B) Supplies Expense (D) 500, 000 Supplies (K) Rp. 500, 000. C) Supplies (D) Rp. 500, 000 Supplies Expense (K) Rp. 500, 000. D) Supplies (D) Rp. 300, 000 Supplies Expense (K) Rp. 300, 000. Show Answer Correct Answer: A) Supplies Expense (D) Rp. 300, 000 Supplies (K) Rp. 300, 000. 24. Farr Corp. had the following transactions during the quarter ended March 31, 20X7:Loss from rare earthquake P70, 000Payment of fire insurance premium for calendar year 20X7 P100, 000 What amount should be included in Farr's income statement for the quarter ended March 31, 20X7? (Casualty loss-Insurance expense) A) Casualty loss:17, 500; Insurance expense:25, 000. B) Casualty loss:70, 000; Insurance expense:25, 000. C) Casualty loss:0; Insurance expense:100, 000. D) Casualty loss:70, 000; Insurance expense:100, 000. Show Answer Correct Answer: B) Casualty loss:70, 000; Insurance expense:25, 000. 25. Recording transactions with rounding to hundreds of rupiah = materiality A) Salah. B) Correct. Show Answer Correct Answer: B) Correct. 26. Intrinsic value is? A) The difference of market value of share option over the option price. B) The excess of market value over the nominal value. C) The difference between the market value and the fair value. D) None of the above. Show Answer Correct Answer: A) The difference of market value of share option over the option price. 27. Which of the following is the pro (agree) Rational for regulating financial accounting practicei. Markets for information are not efficient; without regulation a sub-optimal amount of information will be produced and ignore the rights of individual investors, some of whom can lose their savings as a result of relying upon unregulated disclosure.ii. Investors need protection from fraudulent organizations that may produce misleading informationiii. Accounting information iv. Enhancing comparability A) Iii only. B) I and ii. C) I, ii, and iii. D) I, ii and iv. Show Answer Correct Answer: D) I, ii and iv. 28. An entity may rely on estimates to a less extent during interim reporting compared to annual reporting. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 29. Income tax expense reported on a company's income statement equals taxespayable, plus the net increase in: A) Deferred tax assets and deferred tax liabilities. B) Deferred tax assets, less the net increase in deferred tax liabilities. C) Deferred tax liabilities, less the net increase in deferred tax assets. D) None of above. Show Answer Correct Answer: C) Deferred tax liabilities, less the net increase in deferred tax assets. 30. The two "levels" of harmonization A) Harmonization in accounting standards, which is increased agreement in accounting rules. B) Harmonization in practice, which is increased agreement in actual accounting practices. C) Harmonization in standards may or may not result in harmonization in practice. D) A, B, C True. Show Answer Correct Answer: D) A, B, C True. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesFinancial Reporting Quiz 1Financial Reporting Quiz 2Financial Reporting Quiz 3Financial Reporting Quiz 4Financial Reporting Quiz 5Financial Reporting Quiz 6Financial Reporting Quiz 7Financial Reporting Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books