1. For the purposes of recognising property, plant and equipment assets the acquisition date is the date: Select one:

A. on which the contract to acquire the asset becomes unconditional B. the consideration is paid C. on which the acquirer obtains control of the asset D. the contract to exchange assets is signed

2

The Corporations Act requires which of the following statements to be included in a Directors' Declaration?

Select one:

A.

Whether or not in their opinion, when the declaration was made, there were reasonable grounds to believe that the company would be able to pay its debts as they become due.

B.

All the options listed here are correct.

C.

Whether in their opinion the financial statements comply with accounting standards and the Corporations Act.

D.

Whether in their opinion the financial statements give a true and fair view of the financial position and financial performance of the entity.

2.

When assessing the recoverable amount of assets that have previously been subject to an impairment loss, which of the following indicators assist in providing external evidence that an impairment loss has reversed

Select one:

A.

an adverse effect on the entity from significant changes that have taken place

B.

a decrease in market interest rates during the period

C.

internal reporting sources indicate that the economic performance of the asset will not be as good as expected

D.

a significant decrease in the assets market value during the period

3.

An impairment loss occurs when:

Select one:

A.

the recoverable amount of an asset exceeds its initial cost.

B.

the recoverable amount of an asset exceeds the carrying amount.

C.

the carrying amount of an asset exceeds the recoverable amount.

D.

the asset has a residual value of zero.

Clear my choice

4.

The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential ______________ in making decisions about providing resources to the entity.

Select one:

A.

Lenders

B.

Investors

C.

Creditors

D.

All of these

5.

At reporting date Guru Ltd estimated an impairment loss of $25348 against its single cash-generating unit. The company had the following assets: headquarters building $166254; plant $81446; equipment $62309. The impairment loss allocated to building is

A.

13594

B.

25348

C.

8449

D.

None of these

5.

When evaluating whether an asset has been impaired, the carrying amount of the asset must be compared to its recoverable amount. Recoverable amount is the higher of:

Select one:

A.

fair value less costs to sell: and, value in use

B.

original cost: and, net present value.

C.

initial cost: and, fair value.

D.

value in use: and, original cost

6

The cost of property, plant and equipment is only recognised as an asset if it is probable that the future economic benefits will flow to the entity and:

Select one:

the cost can be reliably measured

the asset has been sent to the buyer

it is a physical asset

the asset has been fully paid for in cash.

7.

If there is a relatively high degree of uncertainty about whether an entity has the appropriate rights to use an asset, or difficulty in assessing the likelihood that future flows of economic benefits will actually occur, it might not be relevant to provide related information to the financial statement readers. This statement relates to the idea of:

Select one:

A.

All of the given options are correct.

B.

reliability

C.

accuracy

D.

probability