1. Which of the following statement/s are incorrect? I. An enterprise should not recognize a contingent liability II. The amount recognized as a provision should be the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. III. A provision is a liability of certain timing and amount. IV. Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid.

- II and IV only

- I and IV only

- I, II and IV

- III only

2. Statement 1: Taxable temporary differences are temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of current periods when the carrying amount of the asset or liability is recovered or settled.

Statement 2: Offsetting of current tax assets against current tax liabilities shall be allowed only if the enterprise has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis, or to realize the asset and settle the liability simultaneously.

-Only Statement 2 is true.

-Only Statement 1 is true.

- All statements are false.

- All statements are true.

3. On the lessors accounting, which of the following situations would prima facie lead to a lease contract being classified as an operating lease?

(1 Point)

Existence of a bargain purchase option

Transfer of ownership by end of lease term

Lease term is for a major part of the assets useful life

Present value of minimum lease payments is 50% of the fair value of the leased asset

4. If share-based payment transaction provides that the employees have the right to choose the settlement whether in cash or shares, the entity is deemed to have issued:

(1 Point)

Liability instrument

Compound financial instrument

Either an equity/liability instrument

Equity instrument

5. In a defined contribution plan, a formula is used that:

(1 Point)

Ensures that pension expense and the cash funding will be different

Requires an employer to contribute a certain sum each period based on the formula

Defines the benefits that the employee will receive at the time of retirement

Ensures that the employer is at risk to make sure funds are available at retirement