Question 1

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 2

Which one of the following is not a function of the trustees of the International Financial Reporting Standards Foundation (IFRS Foundation)?

Options :

A : ensuring the financing of the International Accounting Standards Board (IASB)

B : appointing the members of the International Accounting Standards Board (IASB)

C : promoting the application of International Financial Reporting Standards (IFRSs)

D : providing suggestions on technical matters relating to accounting standards

Answer: D

Question 3

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

Question 4

Liquidity of a company is based on its ability to

Options :

A : buy back shares.

B : meet long term commitments.

C : pay dividends to shareholders.

D : meet short term commitments.

Answer: D

Question 5

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

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