Choose the best answer for each of the following multiple choice questions and write its letter to the corresponding question number in the answer table (use capital letters: A,B,C or D ). Part: I: 1-CLO5. The fact that an entity has related parties cannot have any effect on the entity's financial performance unless there are transactions between the entity and those parties. True or False? a- True b- False 2- CLO5- Every operating segment of an entity is also a reportable segment. True or False? a. True b- False 3- CLO5- Galaxy Limited is a listed company operating in retail industry with three business units: Milky Way, Andromeda, and Whirlpool. Which of the followings is likely to be the key management personnel of Galaxy Limited? a- The general manager of Milky Way; b- The managing director's personal assistant; c- The company's auditor; d- The company's IT manager. 4- CLO5- An entity (X) is necessarily related to a reporting entity (Y) if: a- X owns ordinary shares in Y b- X is a major supplier of Y c- X and Y are both subsidiaries of the same parent d- X is a bank which lends money to Y Part 2 5- CLO4-According to IAS 36 Impairment of Assets, the recoverable amount test requires an entity to compare the fair value an asset less costs to sell, with: a- the amount obtainable from the sale of the asset b- the costs directly attributable to the liquidation of the asset c- its value in use. d- its disposal value 6- CLO4- An asset's carrying amount is JOD25,000. Its fair value less costs of disposal is JOD15,000 and its value in use is 1OD19,000. There is an impairment loss of: a-JOD10,000b-JOD6,000c-JOD4,000d-Nil 7. CLO4 - At reporting date, the carrying amount of a cash-generating unit was considered to be have been impaired by JOD900. The unit included the following assets: Land JOD5000: Plant JOD3000; Goodwill JOD500. The amount of impairment allocated to the land is: a-JOD250b-JOD229c-JOD300d-JOD529 8- CLO4- The IAS 36 definition of "corporate assets" specifically excludes goodwill. True or False? a- True b- False Part 3 9- CLO3-Should a provision be recognized in relation to: (a) future operating losses l (b) onerous contracts? a- (a) No (b) Yes b- (a) Y es (b) No c- (a) Yes (b) Yes d. (a) No (b) No 10- CLO3-Which of the following statements is correct? a- a provision is a class of liabilities b- a contingent liability is a class of liabilities c- a provision is a class of contingent liabilities d. contingent liabilities and provisions are classes of liabilities 11. CLO3-PSUT company is currently suing one of its suppliers for failure to supply goods according to contract. Legal advice suggests that PSUT ple will probably win the case and will probably be awarded damages. How the accountant should deal with this matter? a- recognise a liability b- recognise a provision c- recognise a contingent liability d- recognise a contingent asset e- recognise an asset 12- CLO2-Which of the following are regarded as financial instruments: I Deposits held by a financial institution; II Ordinary shares; III Raw materials inventories; IV Property, plant and equipment. V Accounts receivable and accounts payable. a- I, II, IV and V only: b- II, III and IV only; c- I, II and V only; d- I, IV and V only. 13- CLO2-Company A issues preference shares to Company B, the terms of which entitle party B to redeem the preference shares for cash if Company A's revenues fall below a specified level. From Company A's perspective the preference shares are: a- an equity instrument b-a financial liability c- a compound financial instrument d- a financial asset 14- CLO2-IFRS9 requires that on initial recognition, financial assets and liabilities be measured at: a- historic cost; b- fair value; c- lower of cost or market; d- net present value. 15-CLO2- According to IFRS9 Financial Instruments Presentation, which of the following items would be regarded as a financial liability? a- ordinary shares held in another entity; b- a contract that is a non-derivative for which the entity is obliged to deliver a variable number of its own equity instruments; c- a contractual right to exchange under potentially favorable conditions, an option to purchase shares below the market price; e- the right of a depositor to obtain cash from a financial institution with which it has deposited cash