1.
According to the IASB Conceptual framework, which of the
following is not an objective of financial statements?
a. Providing information regarding the financial position of a
business
b. Providing information regarding the financial performance of a
business
c. Enabling users to assess the performance of management to
aid decision making
d. Helping to assess the going concern status of a business
2. According to the IASB Conceptual framework for Financial
Reporting, which two of the following are part of the faithful
representation?
I. It is neutral
II. It is relevant
III. It is presented fairly
IV. It is free from material error
a. I and II
b. II and III
c. III and IV
d. I and IV
3. What is the role of the IASB?
a. Oversee the standard setting and regulatory process
b. Formulate international financial reporting standards
c. Review defective accounts
d. Control the accountancy profession
4. _ is the residual interest in the assets of the entity after deducting all
its liabilities. (Equity)
5. The IFRS interpretations Committee is a forum for the IASB to
consult with the outside world. (False)
6. The IASB Conceptual Framework identifies user groups. Which of
the following is not an information need for the “investor” group?
a. Assessment of repayment ability of an entity
b. Measuring performance, risk and return
c. Taking decisions regarding holding investments
d. Taking buy/sell decisions
7. Historical Cost values all assets at their cost to the business, without
any adjustments for depreciation. (False)
8. An entity is not a going concern if the management intends to curtail
significantly the scale of the entity’s operations. (True)
9. Which of the following items would be a violation of the materiality
concept?
a. An entity did not present separately a loss arising from the
disposal of an asset for P5,000 in its statement of
comprehensive income. Profit before tax for the year was P1
million.
b. An entity did not disclose a P5,000 illegal bribe made by one
of its senior management to a government official in its
financial statements
c. An entity expensed the purchase of plastic dust bins that have
an expected useful life of two years
d. All of the above transactions violate the materiality concept.
10. A _ depiction is not based on personal judgements, not biased, not
weighted and no biases. (Neutral)
11. In the _, we depreciate assets over their useful lives. (Going Concern
Assumption)
12. _ is the interpretative body of the IASB. (IFRIC)
13. Before a specific standard could be passed and implemented, the
IFRS Foundation Constitution requires the conduct of a public
hearing and field tests. (False)
14. As an accountant, it is our duty to promote compliance with IFRS
among preparers and auditors of financial statements. (True)
15. _ authoritative statements of how particular types of transaction and
other events should be reflected in the financial statements.
(Accounting standards)
16. One of the downsides of the application of the International
Accounting standards is that the preparation costs for financial
reports would be lower than the necessary. (False)
17. One reason why some management wouldn’t want to follow the
international standards is because they would want to align their
external reporting with the internal assessments’ performance of their
company. (True)
18. Verifiable financial accounting information provides results that
would be substantially duplicated by independent measurers using
the same measurement methods. (True)
19. _ means having information available to decision-makers before it
loses its capacity to influence decisions. (Timeliness)
20. _ use of accounting principles from one accounting period to another
enhances the utility of financial statements to users by facilitating
analysis and understanding of comparative accounting data.
(Consistent)
21. Comparable financial accounting information presents similarities
and differences that arise from basic similarities and differences in
the enterprise or enterprises and their transactions, and not merely
from difference in financial accounting treatment. (True)
22. Presentation of information should not only facilitate understanding
but also avoid wrong interpretation of financial statements. (True)
23. _ in annual reports, however, requires that users should be informed
about the data limitations and the magnitude of possible
measurement errors. (Adequate disclosure)
24. To comply with the law, the legal form of a transaction must always
be reflected in financial statements. (False)
25. Standards provide guidance on accounting for all types of transaction
(False)
26. In order for an item to be recognized as an element of financial
statement, is should be _ that an any future economic benefit
associated with the item will flow to or from the enterprise.
(Probable)
27. _ are interested in information about the entity in order for the to
regulate the activities of the enterprises, determine taxation policies
and as the basis for national income and similar statistics.
(Government)
28. _ have an interest in information about the continuance of an
enterprise especially when they have a long-term involvement with
or are dependent with the enterprise (Customers)
29. The IASB’s Conceptual Framework for Financial Reporting identifies
characteristics which make financial information faithfully represent
what it purpose to represent.
Which of the following are examples of those characteristics?
(1) Accruals
(2) Completeness
(3) Going concern
(4) Neutrality
a. 1 and 2
b. 2 and 3
c. 3 and 4
d. 2 and 4
30. _ include the Board of directors, CEOs CFOs, vice presidents,
business unit managers, plant managers and the supervisors.
(Internal users)
