Multiple Choice Question 1. Which of the following describes an IASB requirement that the FASB has adopted

Question:

Multiple Choice Question
1. Which of the following describes an IASB requirement that the FASB has adopted as part of the short-term convergence project?
a. Following the IASB format for presentation of a statement of comprehensive income.
b. Retrospective application of the new accounting principle when a change in accounting principle occurs.
c. Using the cost recovery method when the percentage of completion method is not appropriate for long-term construction contracts.
d. Eliminating LIFO as an acceptable inventory cost flow method.

2. Which of the following IASB standards is a result of the FASB–IASB short-term convergence project?
a. IFRS 1, “First-Time Adoption of IFRS.”
b. IFRS 2, “Share-Based Payment.”
c. IFRS 3, “Business Combinations.”
d. IFRS 8, “Operating Segments.”

3. Which of the following is not currently the subject of a joint IASB–FASB project?
a. Financial statement presentation.
b. Research and development.
c. Revenue recognition.
d. Conceptual framework.

4. Under the SEC’s IFRS Roadmap, which of the following is a criterion that would make a U.S. company eligible for the early use of IFRS?
a. The company is one of the 20 largest companies in the United States.
b. The company is one of the 50 largest companies in the world.
c. The company is one of the 20 largest companies in its industry worldwide.
d. The company is in one of the 10 largest industries in the world.

5. Which of the following does not accurately describe a requirement that a company must fulfill when adopting IFRS for the first time?
a. The company must prepare an opening IFRS at the beginning of the year for which the company is preparing its first set of IFRS financial statements.
b. At the IFRS transition date, the company must select IFRS accounting policies based on those that will be in effect for the accounting period that will be covered by the first set of IFRS financial statements.
c. At the IFRS transition date, the company must derecognize assets and liabilities that were recognized under previous that are not allowed to be recognized under IFRS.
d. The company must provide a reconciliation of net income and stockholders’ equity under previous to net income and stockholders’ equity under IFRS in its first set of IFRS financial statements.

6. In which of the following areas does the IASB allow firms to choose between two acceptable treatments?
a. Measuring property, plant, and equipment subsequent to acquisition.
b. Presenting gains and losses as extraordinary on the face of the income statement.
c. Recognizing development costs that meet criteria for capitalization as an asset.
d. Recognizing past service costs related to pension benefits that have already vested.

7. IAS 1, “Presentation of Financial Statements,” does not provide guidance with respect to which of the following?
a. The statements that must be included in a complete set of financial statements.
b. The basic principles and assumptions to be used in preparing financial statements.
c. The importance of prudence in preparing financial statements.
d. The items that must be presented on the face of the financial statements.

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