1. Which of the following is not an objective of financial statements?

A. To present information about financial position of an entity as of a

given date.

B. To present information about the realizable amount of an entitys

assets in the event of liquidation.

C. To present information about the financial performance of an entity for

a given reporting period.

D. To present information about the changes of financial position of an

enterprise.

2. Which of the following is not to be presented on the face of the statement of financial position?

A. Notes payable

B. Treasury shares

C. Net income

D. Share capital

3. Financial statements are

A. Specific purpose financial reports.

B. Intended to meet the information needs of the management.

C. Structured presentation of the financial position and changes in financial position of an enterprise.

D. Reports about the performance of the management.

4. Which among the following is not presented in the profit or loss section of the statement of comprehensive income?

A. Dividends declared during the period.

B. Revenue earned during the period.

C. Expenses incurred during the period.

D. Finance costs incurred during the period.

5. Which of the following is presented under selling or marketing expense using the function of expense method of presenting expenses in the profit or loss section of the statement of comprehensive income?

A. Uncollectible accounts expense.

B. Advertising expense.

C. Administrative expense.

D. Office supplies expense.

6. Which of the following is not a line item on the face of the income statement using the function of expense method?

A. Revenue.

B. Finance costs.

C. Income tax expense.

D. Salaries and wages.

7. Which of the following line items is normally shown in income statement presenting expenses by function but not in an income statement presenting expenses by nature?

A. Gross profit.

B. Income from associates.

C. Income from operations.

D. Finance cost.

8. Which of the following would not appear in the statement of changes in equity?

A. Sales revenue.

B. Net profit.

C. Dividends.

D. Share capital issued.

9. The method of presenting cash flow from operations where net income is adjusted for items without any cash effect is called

A. Direct method.

B. Indirect method.

C. Allowance method.

D. Reconciliation method.