Question
1. Which one is NOT true for accounting model? A. Continental European model is oriented toward the decision needs of large numbers of investors and
1. Which one is NOT true for accounting model?
A. | Continental European model is oriented toward the decision needs of large numbers of investors and creditors | |
B. | Anglo-Saxon model is used in English-speaking countries influenced by the United Kingdom or the United States | |
C. | Continental European model is used to provide information for taxation and government-planning | |
D. | Continental European model is used in Europe, Japan, and code law countries |
2. Which statement is true about convergence?
A. | Convergence facilitates better comparability of financial statements | |
B. | Convergence facilitates international mergers and acquisitions | |
C. | Convergence means enforcement of a single set of accepted standards by several regulatory bodies. | |
D. | All of above. |
3. Synergy Ltd. purchased an equipment on January 1, Year 1 for 200,000. The equipment has a four-year life, no residual value, and is depreciated on a straight line basis. On January 1, Year 2, the company conducted its first revaluation when the fair value was 240,000. Under IAS 16, the journal entry recorded on this date would include:
A. | A credit to Revaluation Surplus for 90,000. | |
B. | A debit to Revaluation Surplus for 90,000 | |
C. | A debit to Loss on Revaluation for 90,000. | |
D. | A credit to Revaluation Surplus for 40,000. |
4. Synergy Ltd. purchased an equipment on January 1, Year 1 for 200,000. The equipment has a four-year life, no residual value, and is depreciated on a straight line basis. On January 1, Year 2, the company conducted its first revaluation when the fair value was 240,000.
What was Year 2 depreciation expenses under IFRS and under U.S.GAAP, respectively?
A. | Under IFRS: $50,000; Under U.S.GAAP: $50,000 | |
B. | Under IFRS: $80,000; Under U.S.GAAP: $50,000. | |
C. | Under IFRS: $80,000; Under U.S.GAAP: $80,000. | |
D. | Under IFRS: $60,000; Under U.S.GAAP: $50,000. |
5. During Year 1, Reforce Company conducted research and development on a new product and incurred $60,000 research and $300,000 development cost. The company had determined that all of the IAS 38 criteria have been met for capitalization of development cost. On January 2, Year 2, the product is ready for sale and is expected to be marketable for 3 years.
What was the difference between IFRS and U.S.GAAP for Year 1 net income?
A. | Net income under IFRS was $300,000 higher than net income under U.S.GAAP. | |
B. | Net income under IFRS was $300,000 lower than net income under U.S.GAAP. | |
C. | Net income under IFRS was $360,000 higher than net income under U.S.GAAP. | |
D. | There was no difference for net income under IFRS and U.S.GAAP |
6. During Year 1, Reforce Company conducted research and development on a new product and incurred $60,000 research and $300,000 development cost. The company had determined that all of the IAS 38 criteria have been met for capitalization of development cost. On January 2, Year 2, the product is ready for sale and is expected to be marketable for 3 years.
What was the difference between IFRS and U.S.GAAP for Year 1 total assets?
A. | Total assets under IFRS were $300,000 lower than total assets under U.S.GAAP. | |
B. | Total assets under IFRS were $360,000 higher than total assets under U.S.GAAP. | |
C. | Total assets under IFRS were $300,000 higher than total assets under U.S.GAAP. | |
D. | There was no difference for total assets under IFRS and U.S.GAAP. |
7. During Year 1, Reforce Company conducted research and development on a new product and incurred $60,000 research and $300,000 development cost. The company had determined that all of the IAS 38 criteria have been met for capitalization of development cost. On January 2, Year 2, the product is ready for sale and is expected to be marketable for 3 years.
What was the impact on Year 2 net income under IFRS?
A. | $300,000 Amortization expense was debited | |
B. | $100,000 Amortization expense was debited. | |
C. | $100,000 Development cost was debited | |
D. | There was no impact on Year 2 net income. |
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