1. An impairment loss occurs when:

		the asset has a residual value of zero.
		the recoverable amount of an asset exceeds the carrying amount.
		the carrying amount of an asset exceeds the recoverable amount.
		the recoverable amount of an asset exceeds its initial cost.

2. When an asset is measured using the revaluation model, any impairment loss is treated as:

		a revaluation decrement.
		a revaluation increment.
		an off-set against depreciation expense.
		an addition to depreciation expense.

3. A general purpose financial statements means:

		a financial report prepared by the company for the needs of any user
		a financial report intended to meet the information needs of preparers
		a financial report intended to meet the information needs of users who are unable to command the preparation of special purpose reports
		a financial report intended to meet the information needs of users who are able to command the preparation of reports to satisfy all of their information needs

4. Which of the following best describes the correct treatment of contingent liabilities in the financial statements?

		Contingent liabilities are to be recognised as a separate category in the statement of financial position, with a clear note disclosure of the factors that constitute the contingent event for each material contingent liability.
		Contingent liabilities are required to be recognised in statement of comprehensive income under AASB 137/IAS 37.
		Contingent liabilities are required to be disclosed in the notes to the financial statement unless the possibility of an outflow in settlement is remote.
		Contingent liabilities are to be recognised in the statement of financial position and included in categories that reflect their nature and possible timing.

5. Excellent Ltd purchased a new building on a prime central business district site for $8 000 000. During the acquisition process, the following costs were further incurred:

• Stamp duty: $ 800 000
• Internal refurbishment costs to the building required to be made before use: $ 200 000
• Cost of renovating the parking bays located in 100 metres away from the building: $200 000

The useful life of the building is expected to be 40 years. The residual value of the building at that time is estimated to be $ 800 000. The benefits from owning the land and building are expected to be derived evenly. What is the appropriate annual depreciation charge?

		$170 000
		$200 000
		$205 000
		$210 000

6. Grace Ltd has 10 employees, who are each paid $600 per week for a 5 day working week. Each employee is entitled to 8 days accumulating non-vesting sick leave per year. At 1 July 2020 the accumulated untaken leave was 44 days in total. During the year ended 30 June 2021 a total of 55 days sick leave was taken, of which 10 days were unpaid leave. Of the accumulated untaken leave at 30 June 2021 it is estimated that 40% of it will be taken during the following year.

The balance of the provision for sick leave at 30 June 2021 is (rounded to the nearest dollar):

		$9 480
		$3 792
		$3 024
		$2 832

7. Consider the following information relating to an item of plant and equipment at the reporting date.

Item	Carrying amount ($)	Fair value ($)	Costs of disposal ($)	Value in use ($)
Plant and equipment	185,000	170,000	10,000	180,000

Which of the following statement is incorrect?

		The fair value less costs of disposal is 160,000.
		The recoverable amount is 180,000.
		If the plant and equipment is carried under the cost model, an impairment loss of this asset is $5,000.
		If the plant and equipment is carried under the revaluation model, the revaluation adjustment is a $25,000 decrease