1. Top of Form

These are incremental costs that are directly attributable to negotiating and arranging a lease

a. Initial direct costs

b. Transaction costs

c. Costs of services

d. Executory costs

2.IFRIC 4, Determining whether an Arrangement contains a Lease does not apply to:

A. Outsourcing arrangements

B. Public-to-private service concession arrangements

C. Arrangements in the telecommunications industry

D. Take-or-pay and similar contracts

3.Significant influence is presumed to exist if an investor holds, directly or indirectly, at least what percentage of the voting power of the investee, unless it can be clearly demonstrated that this is not the case?

A. 20% - 50%

B. Exactly 20%

C. Below 20%

D. 21% - 50%

4.Which of the following statements best describes the term "going concern"?*

a. When current liabilities exceed current assets

b. The financial statements are normally prepared on the assumption that an entity will continue in operation for the forseeable future.

c. The potential to contribute to the flow cash and cash equivalents to the entity

d. The expenses exceed income

5.If a sinking fund is used to purchase securities, the sinking fund*

a. Increases when revenue is earned on the securities

b. Decreases when the securities are purchased

c. Decreases when revenue is earned on the securities

d. Is not affected by revenue earned on the securities

6.Adjusting events after the reporting period are those that:

A. Provide evidence of conditions that existed at the end of the reporting period

B. Are indicative of conditions that arose after the end of the reporting period

C. Are favorable or unfavorable and indicative of conditions that arose after the end of the reporting period

D. Provide for conditions that existed after the date the financial statements were authorized for issue

7.Which of the following is (are) an example of a situation in which offsetting is appropriate? STATEMENT 1: Financial assets and financial liabilities that arise from financial instruments having the same primary risk exposure (e.g., assets and liabilities within a portfolio of forward contracts or other derivative instruments) but involve different counterparties. STATEMENT 2: Financial or other assets pledged as collateral for non-recourse financial liabilities. STATEMENT 3: Derivative financial instruments entered into with the same counterparty subject to a master netting agreement. STATEMENT 4: The entity currently has a legally enforceable right to set-off the recognized amounts and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously

A. Only IV

B. I and III

C. Only III

D. III and IV

8.Revenue arising from the use by others of entity assets yielding interest, royalties and dividends shall be recognized on the following bases except:

A. Interest shall be recognized using the effective interest method.

B. Royalties shall be recognized on straight line basis in accordance with the substance of the relevant agreement.

C. Dividends shall be recognized when the shareholder's right to receive payment is established.

D. All are true.

9.In computations of weighted average of shares outstanding, when a share dividend or stock split occurs, the additional shares are

a. weighted by the number of days outstanding.

b. weighted by the number of months outstanding.

c. considered outstanding at the beginning of the year.

d. considered outstanding at the beginning of the earliest year reported.

10.Bonds that mature on a single date are called

a. Term bonds

b. Serial bonds

c. Debenture bonds

d. Callable bonds

11.Which is true concerning the balance sheet presentation of receivables?*

a. Trade receivables and nontrade receivables are shown separately.

b. Nontrade receivables are presented as noncurrent assets.

c. Trade accounts receivable and trade notes should be presented separately.

d. Trade receivables and nontrade receivables which are currently collectible, shall be presented as one line item called "trade and other receivables".

12.It is the International Accounting Standards Board's main vehicle for consulting the public and sets out a specific proposal in the form of a proposed IFRS (or amendment to an IFRS).

A. Request for views

B. Exposure draft

C. Discussion paper

D. Effect analysis

13.PAS 18, Revenue, does not deal with revenue arising from the following except?

A. changes in the fair value of accounts receivables

B. dividends arising from investments which are accounted for under cost method

C. lease agreements

D. changes in the value of other current assets

14.Consolidated financial statements are prepared when a parent-subsidiary relationship exists.*

a. Economic entity assumption

b. Relevance characteristic

c. Comparability characteristics

d. Neutrality characteristics

15.Which is incorrect concerning the comparability of financial information?*

a. Users must be able to compare the financial statements of an entity through time in order to identify trends in its financial position and performance.

b. Users must be able to compare the financial statements of different entities in order to evaluate their relative financial position, performance and cash flows.

c. It is appropriate for an entity to leave its accounting policies unchanged when more relevant and reliable alternative exist.

d. It is important that financial statements show information for the preceding period because users wish to compare financial position, performance and cash flows of an entity over time.

16.Which of the following is not true about a conceptual framework?*

a. Should increase financial statement users' understanding and confidence in financial reporting.

b. Should enhance comparability among entities' financial statements.

c. Should allow new and emerging practical problems to be solved more quickly.

d. Should be based on fundamental truth that is derived from the law of nature

17.What is a present obligation?*

a. Legal obligation only.

b. Constructive obligation only.

c. Both legal and constructive obligations.

d. Neither legal nor constructive obligations.

18.During the lifetime of an entity, accountants produce financial statements at arbitrary or artificial points in time in accordance with which basic accounting concept?*

a. Objectivity

b. Periodicity assumption

c. Materiality

d. Economic entity

19.Companies account for transfers of investments between categories

a. prospectively, at the end of the period after the change in the business model.

b. prospectively, at the beginning of the period after the change in the business model.

c. retroactively, at the end of the period after the change in the business model.

d. retroactively, at the beginning of the period after the change in the business model.

20.The Conceptual Framework for Financial Reporting:

A. is a PFRS

B. overrides all other PFRS requirements

C. defines standards for any particular measurement or disclosure issue

D. is in the hierarchy that management must, in the absence of a specific PFRS requirement, apply in developing an accounting policy that results in information that is relevant and reliable.