Question 1

In the context of a regulatory framework, a principles-based system

Options :

A : is a rule-driven approach.

B : attempts to cover specific eventualities.

C : provides a theoretical basis with broad terms of reference.

D : removes any element of judgement by providing clear requirements.

Answer: C

Question 2

Restrictions on the scope of a specific accounting standard are stated in

Options :

A : that specific standard.

B : the IASB's Conceptual Framework.

C : the explanatory materials provided by the AASB.

D : various Statements of Accounting Concepts (SACs) issued by the AASB.

Answer: A

Question 3

A company purchased a machine 10 years ago for $143 890. It is expected that the machine will generate future revenues of $108 495. The machine could be scrapped for $81 232. An equivalent machine in the same condition would cost $94 950 to buy now. What is the deprival value of the asset?

Options :

A : $35 395

B : $81 232

C : $94 950

D : $108 495

Answer: C

Question 4

Which one of the following statements regarding the IASB's Conceptual Framework for Financial Reporting is correct?

Options :

A : It overrides any local or international accounting standard.

B : It specifies the concepts that underlie the preparation and presentation of special purpose financial statements.

C : It specifies the concepts that underlie the preparation and presentation of general purpose financial statements.

D : It specifies the concepts that underlie the preparation and presentation of only consolidated financial statements.

Answer: C

Question 5

You assumed the role as the Chairperson of the Board of Directors of Daylight Ltd. As you start to write your first directors' report, which one of the following areas are you not required to include in your report?

Options :

A : Details of any dividends paid or proposed.

B : Details regarding any significant changes to Daylight's state of affairs for the year that just ended.

C : Details regarding accounting policies pursued by Daylight in preparation of its financial statements.

D : Review of operations of Daylight during the year just ended and any likely developments in the future that may impact Daylight.

Answer: C

Online Financial-Accounting-and-Reporting Practice Test - Free Sample Exam Questions

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