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Question 1

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 2

Which of the following statements are correct in the context of accounting concepts and principles?

I)The going concern assumption requires that assets be carried at their cost values.

II)Prudence allows the creation of contingency reserves and more generous provisions.

III)Financial information is considered complete even if it excludes non-material information.

IV)Understandability does not require complex information to be excluded from financial reports.

Options :

A : I and III only

B : II and III only

C : II and IV only

D : III and IV only

Answer: D

Question 3

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 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

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