This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Reporting > Financial Reporting – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. 2. What is not a service company is: A) Drugstore. B) Vehicle rental. C) PPAT. D) Accounting firm. Show Answer Correct Answer: A) Drugstore. 3. To be a faithful representation as described in the Conceptual Framework, information must be all of thefollowing, except A) Neutral. B) Free from error. C) Confirmatory. D) Complete. Show Answer Correct Answer: C) Confirmatory. 4. 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. 5. Every transaction that records both debit and credit entry is: A) Accrual basis. B) Single entry system of book-keeping. C) Cash basisof accounting. D) Double Entry system of book-keeping. Show Answer Correct Answer: D) Double Entry system of book-keeping. 6. 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. 7. 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. 8. 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. 9. How many financial statements are there? A) 1. B) 3. C) 2. D) 4. Show Answer Correct Answer: B) 3. 10. The elements of financial statements which relate to financial position are: A) Assets, liabilities and equity. B) Income and expenses. C) Assets, liabilities, income and expenses. D) Income, expenses and equity. Show Answer Correct Answer: A) Assets, liabilities and equity. 11. George started a new business and Leo is his accountant. Leo is preparing a financial statement that provides information about the company's sources of financing and how it is using the money. Which financial statement is Leo preparing? A) Statement of Financial Position. B) Statement of Income. C) Balance Sheet. D) Cash Flow Statement. Show Answer Correct Answer: A) Statement of Financial Position. 12. How can financial reporting aid in detecting financial fraud? A) By ignoring financial statements and focusing on social media reviews. B) By analyzing revenue from different marketing campaigns. C) By identifying inconsistencies and anomalies in financial data. D) By comparing employee satisfaction levels. Show Answer Correct Answer: C) By identifying inconsistencies and anomalies in financial data. 13. What is Mydeco's enterprise value (EV) at the end of 2019? A) $ 1, 150 million. B) $ 1, 113.95 million. C) $ 1, 120 million. D) $ 1, 100 million. Show Answer Correct Answer: B) $ 1, 113.95 million. 14. Mr Lala, the owner of Lala Enterprise, can include his personal property in the financial statement of Lala Enterprise. A) True. B) False. Show Answer Correct Answer: B) False. 15. Elements of Financial Statements A) Definition-assets, liabilities, and other financial statement elements are defined. B) Recognition-guidelines as to when to recognize revenues and expenses. C) Measurement-various bases are allowed:historical cost, current cost, realizable value, and present value. D) A, B, C is true. Show Answer Correct Answer: D) A, B, C is true. 16. According to the IASB's Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful representation?1. It is neutral2. It is relevant3. It is presented fairly4. It is free from material error. A) 1 and 2. B) 2 and 3. C) 1 and 4. D) 3 and 4. Show Answer Correct Answer: C) 1 and 4. 17. What is the entity concept? A) Assume the business will continue to operate for the foreseeable future. B) A boundary is drawn around each organization. This means personal assets and expenses are not part of the company. C) You only use GAAP for things that really make a difference or are significant to the company. D) You have to report accounting info at regular intervals. Show Answer Correct Answer: B) A boundary is drawn around each organization. This means personal assets and expenses are not part of the company. 18. What is the importance of financial reporting for regulatory authorities? A) To monitor social media marketing strategies. B) To enforce taxation policies. C) To control employee salaries. D) To review customer complaints. Show Answer Correct Answer: B) To enforce taxation policies. 19. Which of the following statements about accounting concepts and the characteristic of financial information are correct?1. The concept of accruals requires transactions to be reflected in the financial statements once the cash or its equivalent is received or paid.2. Information is material if its omission or misstatement could influence the economics decision of users taken on the basis of the financial statements.3. Based on faithful representation, it may sometimes be necessary to exclude material information from financial statements due to difficulties establishing an accurate figure. A) 1 Only. B) 1 and 2 Only. C) 2 Only. D) 2 and 3 Only. Show Answer Correct Answer: C) 2 Only. 20. Only selected explanatory notes are provided in interim financial reports prepared under PAS 1. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 21. Most businesses operate under accrual basis. A) False. B) True. Show Answer Correct Answer: B) True. 22. Juan Martinez, CFO of VIRMIN, S.A., is selecting the depreciation method to use for a new machine. The machine has an expected useful life of six years. Production is expected to be relatively low initially but to increase over time. The method chosen for tax reporting must be the same as the method used for financial reporting. If Martinez wants to minimize tax payments in the first year of the machine's life, which of the following depreciation methods is Martinez most likely to use? A) Straight-line method. B) Units-of-productionmethod. C) Double-declining balance method. D) None of above. Show Answer Correct Answer: C) Double-declining balance method. 23. Which of the following is not an assumption in preparing financial statements?..... A) Economic Entity. B) Monetary Unit. C) Going Concern. D) Cost. Show Answer Correct Answer: D) Cost. 24. Financial Accounting Standards in Indonesia adopt..... A) International Financial Reporting Standards. B) General Accepted Accounting Principles. C) Statement of Financial Accounting Standards. D) International Public Sector Accounting Standards. Show Answer Correct Answer: A) International Financial Reporting Standards. 25. International financial reporting standards are currently developed by which entity? A) The Financial Accounting Standards Board. B) The International Accounting Standards Board. C) The International Organization of Securities Commissions. D) None of above. Show Answer Correct Answer: B) The International Accounting Standards Board. 26. In the conceptual framework of financial reporting, it is stated that the purpose of preparing financial reports is to convey financial information to..... A) Potential investors. B) Current investors and potential investors. C) Stakeholders, which include investors, creditors, employees, government, partners and the community. D) Current and potential investors and creditors. Show Answer Correct Answer: D) Current and potential investors and creditors. 27. Fairplay had the following information related to the sale of its products during 2009, which was its first year of business:Revenue = $ 1, 000, 000Returns of goods sold = $ 100, 000Cash collected = $ 800, 000Cost of goods sold = $ 700, 000Under the accrual basis of accounting, how much net revenue would be reported on Fairplay's 2009 income statement? A) $ 200, 000. B) $ 900, 000. C) $ 1, 000, 000. D) None of above. Show Answer Correct Answer: B) $ 900, 000. 28. ..... for Financial Statements shall serve as the covering letter in transmitting the entity financial statements to the COA, and other regulatory agencies and other entities. A) Statement of Agency Responsibility. B) Statement of Management Responsibility. C) Statement of Entity Responsibility. D) None of above. Show Answer Correct Answer: B) Statement of Management Responsibility. 29. Based on the standards, income, expenses and other income/expenses must be reported as..... A) Income from discontinued operations. B) Earning before tax. C) Income from operations. D) Gross income. Show Answer Correct Answer: C) Income from operations. 30. Technically, creative accounting provides accounting choices that allow increasing the value of the firm, namely..... A) Increase Income and Reduce Assets. B) Reducing Expenses and Increasing Debt. C) Increase Assets and Reduce Expenses. D) Lowering Debt and Raising Charges. Show Answer Correct Answer: C) Increase Assets and Reduce Expenses. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books