Question 1

Since 2005,the main influence on Australian accounting standards is:

Accepted Answer

A)   U.S. accounting standards.
B)   British accounting standards.
C)   International accounting standards.
D)   All of the above

Question 2

Accountants generally make no adjustments for changes in the value of the dollar.

Accepted Answer

A) True 
 B)False

Question 3

Under the AASB Framework,which of the following is NOT a primary qualitative characteristic of financial reporting?

Accepted Answer

A)   Relevance
B)   Conservatism
C)   Understandability
D)   Reliability

Question 4

The Global Reporting Initiative (GRI)is a worldwide,network-based organisation that produces a comprehensive sustainability reporting framework that is widely used globally.

Accepted Answer

A) True 
 B)False

Question 5

AASB 110 refers to subsequent events that relate to conditions that have arisen after the reporting date.Such events,if they could influence decision making:

Accepted Answer

A)   must be referred to in a special mail-out to shareholders.
B)   need not be accounted for.
C)   must be disclosed in a footnote to the financial statements.
D)   require adjustments to the figures in the financial statements.

Question 6

Accounting principles initially drew their authority from acceptance by the business community.

Accepted Answer

A) True 
 B)False

Question 7

The authority responsible for enforcing accounting and other corporate rules for companies in Australia is:

Accepted Answer

A)   ASIC.
B)   FRC.
C)   AASB.
D)   both A and C

Question 8

The underlying basis for the use of historical cost is the:

Accepted Answer

A)   relevance principle.
B)   matching principle.
C)   comparability principle.
D)   reliability principle.

Question 9

AASB 101 requires a summary of significant accounting policies to be included in the director's report that accompanies the financial statements.

Accepted Answer

A) True 
 B)False

Question 10

Since Freda's Alterations has very few transactions each year,financial statements are only prepared for the bank every alternate year.This violates the reliability principle.

Accepted Answer

A) True 
 B)False

Question 11

AASB 101 requires that accounting policy changes be disclosed in a note to the financial statements.A business bought new equipment and thought it would have a six-year useful life.After two years,the business decided that the equipment would be useful for only three more years.This would be considered a:

Accepted Answer

A)   change in accounting estimate.
B)   change in accounting policy.
C)   recording error.
D)   contingency.

Question 12

Which of the following statements is false?

Accepted Answer

A)   Reliable data are usually supported by objective evidence.
B)   An independent valuation is usually considered reliable.
C)   Reliable data are verifiable.
D)   Owner opinions are one source of objective evidence.

Question 13

AASB 110 refers to subsequent events that provide evidence about conditions that existed at reporting date.Such events:

Accepted Answer

A)   must be disclosed in a footnote to the financial statements.
B)   must be referred to in the auditor's report.
C)   do not have any effect on the accounts until the next financial period.
D)   require adjustments to the figures in the financial statements.

Question 14

All of the following accounting practices are examples of conservatism,except:

Accepted Answer

A)   completed contract method.
B)   lower-of-cost-and-net-realisable-value inventory method.
C)   accelerated depreciation.
D)   FIFO method when prices are increasing.

Question 15

Which type of business would be most likely to use the instalment method to record revenue?

Accepted Answer

A)   medical practitioner
B)   real estate developer
C)   pharmacy
D)   construction firm

Question 16

SAC 2 is titled:

Accepted Answer

A)   Objective of General Purpose Financial Reporting.
B)   Qualitative Characteristics of Financial Information.
C)   Definition and Recognition of the Elements of Financial Statements.
D)   Definition of the Reporting Entity.

Question 17

On 1 April 2017,Babies Unlimited sold a crib with accessories,which cost $1 000,for $1 500.It was sold for 10% deposit,with the balance to be paid in six equal payments beginning on 1 May 2017.How much sales revenue is recognised in the calendar year 2017 under the instalment method?

Accepted Answer

A)   $300
B)   $1 500
C)   $150
D)   $1 350

Question 18

The presumption is that a material item is one that is ________ of an appropriate base amount.

Accepted Answer

A)   greater than 20%
B)   greater than 10%
C)   equal to or less than 5%
D)   greater than 5%

Question 19

Accounting principles:

Accepted Answer

A)   should be accepted by people and organisations who need financial information to make decisions.
B)   explain financial phenomena.
C)   are similar to natural laws, like the law of gravity.
D)   apply only to large business organisations.

Question 20

Which of the following parties is NOT a frequent contributor in the consultation phase of the standard setting process?

Accepted Answer

A)   The professional accounting bodies, CPAA and ICAA
B)   Academics
C)   ASIC
D)   Industry groups

Exam 17: The Framework of Accounting

The underlying basis for the use of historical cost is the:

Correct Answer
verified

Which type of business would be most likely to use the instalment method to record revenue?

Correct Answer
verified

Since 2005,the main influence on Australian accounting standards is:

Correct Answer
verified

The Global Reporting Initiative (GRI)is a worldwide,network-based organisation that produces a comprehensive sustainability reporting framework that is widely used globally.

Correct Answer
verified

Accounting principles initially drew their authority from acceptance by the business community.

Correct Answer
verified

Since Freda's Alterations has very few transactions each year,financial statements are only prepared for the bank every alternate year.This violates the reliability principle.

Correct Answer
verified

Accounting principles:

Correct Answer
verified

Which of the following statements is false?

Correct Answer
verified

Under the AASB Framework,which of the following is NOT a primary qualitative characteristic of financial reporting?

Correct Answer
verified

SAC 2 is titled:

Correct Answer
verified

AASB 110 refers to subsequent events that provide evidence about conditions that existed at reporting date.Such events:

Correct Answer
verified

Correct Answer
verified

Accountants generally make no adjustments for changes in the value of the dollar.

Correct Answer
verified

The authority responsible for enforcing accounting and other corporate rules for companies in Australia is:

Correct Answer
verified

AASB 110 refers to subsequent events that relate to conditions that have arisen after the reporting date.Such events,if they could influence decision making:

Correct Answer
verified

AASB 101 requires a summary of significant accounting policies to be included in the director's report that accompanies the financial statements.

Correct Answer
verified

Which of the following parties is NOT a frequent contributor in the consultation phase of the standard setting process?

Correct Answer
verified

On 1 April 2017,Babies Unlimited sold a crib with accessories,which cost $1 000,for $1 500.It was sold for 10% deposit,with the balance to be paid in six equal payments beginning on 1 May 2017.How much sales revenue is recognised in the calendar year 2017 under the instalment method?

Correct Answer
verified

All of the following accounting practices are examples of conservatism,except:

Correct Answer
verified

The presumption is that a material item is one that is ________ of an appropriate base amount.

Correct Answer
verified

Exam 17: The Framework of Accounting

The underlying basis for the use of historical cost is the:

Correct AnswerverifiedShow Answer

Which type of business would be most likely to use the instalment method to record revenue?

Correct AnswerverifiedShow Answer

Since 2005,the main influence on Australian accounting standards is:

Correct AnswerverifiedShow Answer

The Global Reporting Initiative (GRI)is a worldwide,network-based organisation that produces a comprehensive sustainability reporting framework that is widely used globally.

Correct AnswerverifiedShow Answer

Accounting principles initially drew their authority from acceptance by the business community.

Correct AnswerverifiedShow Answer

Since Freda's Alterations has very few transactions each year,financial statements are only prepared for the bank every alternate year.This violates the reliability principle.

Correct AnswerverifiedShow Answer

Accounting principles:

Correct AnswerverifiedShow Answer

Which of the following statements is false?

Correct AnswerverifiedShow Answer

Under the AASB Framework,which of the following is NOT a primary qualitative characteristic of financial reporting?

Correct AnswerverifiedShow Answer

SAC 2 is titled:

Correct AnswerverifiedShow Answer

AASB 110 refers to subsequent events that provide evidence about conditions that existed at reporting date.Such events:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Accountants generally make no adjustments for changes in the value of the dollar.

Correct AnswerverifiedShow Answer

The authority responsible for enforcing accounting and other corporate rules for companies in Australia is:

Correct AnswerverifiedShow Answer

AASB 110 refers to subsequent events that relate to conditions that have arisen after the reporting date.Such events,if they could influence decision making:

Correct AnswerverifiedShow Answer

AASB 101 requires a summary of significant accounting policies to be included in the director's report that accompanies the financial statements.

Correct AnswerverifiedShow Answer

Which of the following parties is NOT a frequent contributor in the consultation phase of the standard setting process?

Correct AnswerverifiedShow Answer

On 1 April 2017,Babies Unlimited sold a crib with accessories,which cost $1 000,for $1 500.It was sold for 10% deposit,with the balance to be paid in six equal payments beginning on 1 May 2017.How much sales revenue is recognised in the calendar year 2017 under the instalment method?

Correct AnswerverifiedShow Answer

All of the following accounting practices are examples of conservatism,except:

Correct AnswerverifiedShow Answer

The presumption is that a material item is one that is ________ of an appropriate base amount.

Correct AnswerverifiedShow Answer

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