1..Normative accounting theories and research seek to:

a.

Describe what is normal, or generally accepted, practice

b.

All of the given options are correct.

c.

Prescribe particular approaches not driven by existing practices

d.

Explain and predict particular phenomena based on observation

2. Five quires of paper were purchased by the office to be used for business purposes. It should not be classified as a fixed asset under which of the following accounting principle?

a.

Timeliness Principle.

b.

Dual Aspect Principle.

c.

Materiality Principle.

d.

Consistency Principle

Mariam was much interested in doing a research on childs development. It took multiple years for her to complete the study as the sample size was large. She did her research on how the kids of different geographical locations and backgrounds respond to sports and the impact of sports on their all-round development. Which method of research was adopted by Mariam?

a.

Simulation method

b.

Persuasive arguments.

c.

Field study method

d.

Survey method

Which of the following would not be an example of a user who may rely on general purpose financial reports?

A Henry who is given $5 000 on his 18th birthday by his grandfather to invest in the share market.

B Singh who manufactures sugar free muesli bars hopes to secure long term sales contracts with school canteens all over the county.

C Milly who runs a successful organic food caf is keen to expand into the food truck industry by obtaining finance via crowd-funding.

D Van who owns a fishing and camping store is keen to expand his product range by approaching his suppliers to ask about increasing his credit limit.

Question 8

Which of the following statements about the application of IFRS in accordance with The Conceptual Framework is the most correct?

A Entities that are not expected to continue in the foreseeable future are to prepare their accounts on the net realisable value assumption.

B Entities may change the valuation and measurement of assets provided they disclose the change and its effects in the financial report.

C Entities within the scope of the Corporations Act can choose to apply Australian or International accounting standards when preparing their financial reports.

D Entities may prepare financial statements on a cash flow basis provided that they meet the characteristics of comparability, understandability, timeliness and verifiability.

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