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C. Prudent
D. Faithful
D. The costs versus the benefits of the alternative methods of disclosing the
transaction involved
7. Which of the following statements is not an objective of financial reporting?
A. Provide information that is useful in investment and credit decisions
B. Provide information about enterprise resources, claims to those resources, and
changes to them
C. Provide information on the liquidation value of an enterprise
D. Provide information that is useful in assessing cash flow prospects
8. Financial accounting can be broadly defined as the area of accounting that
prepares
A. General purpose financial statements to be used by parties internal to the
business enterprise only
B. Financial statements to be used by investor only
C. General purpose financial statements to be used by parties both internal and
external to the business enterprise
D. Financial statements to be used primarily by management
9. Preparation of consolidated financial statements when a parent-subsidiary
relationship exist is an example of the
A. Economic entity assumption
B. Relevance characteristic
C. Comparability characteristic
D. Neutrality characteristic
C. Company constitution
D. Prospectus.
B. I and II only
D. I, II and III
A. Materiality depends on the size and nature of the item judged in the particular
circumstances of its omission or misstatement.
B. Materiality provides that the specific disclosure requirements of a PFRS must
be met even if the resulting information is not material.
C. Items of a dissimilar nature or function shall be presented separately unless
they are immaterial.
D. Information is material if its nondisclosure could influence the economic
decisions of users taken on the basis of the financial statements.
17.An entity decided to extend its reporting period from a year (12-month period) to
a 15-month period. Which of the following is not required under PAS 1 in case of
change in reporting period?
A. The entity should disclose the reason for using a longer period than a period
of 12 months.
B. The entity should change the reporting period only if other similar entities in
the geographical area in which it generally operates have done so in the current
year.
C. The entity should disclose that comparative amounts used in the financial
statements are not entirely comparable.
D. The entity should disclose the period covered by the financial statements.
18.What is disclosed when departing from an international accounting standard?
I. The Title of the Standard or Interpretation from which it has departed
II. The nature of the departure, and the treatment the Standard or Interpretation
would require
III. The reason why that treatment would be so misleading
IV. The treatment adopted
V. The financial impact of the departure on the financial statements (for each
period presented)
A. I and II only
B. I, II III and V only
C. Non-current liabilities
D. Non-current assets
C. Cash method
D. Accrual method