company and financial reporting

QUESTION 1 A normative theory of accounting provides prescription about what accounting methods an organisation should adopt not adopt remove avoid QUESTION 2 Conceptual frameworks can be classified as normative theories of accounting as they provide guidance prescription to people involved in preparing general purpose financial statements. True False QUESTION 3 Accounting Standard AASS 1053 Application of Tiers of Australian Accounting Standards defines a as an entity in respect of which it is reasonable to expect the existence of users who rely on the entity's general purpose financial statements for information that will be useful to them for making and evaluating decisions about the allocation of resources. It can be a single entity or a group comprising a parent and all of its subsidiaries: non reporting entity reasonable entity reporting entity resource entity QUESTION 5 The financial information included within the financial statements reflects only the financial performance of the entity as determined by applying the guidance and rules incorporated within the conceptual Framework and within applicable accounting standards: they do not provide a means of assessing the performance of the entity legal technological social or environmental political QUESTION 6 A financial statement that complies with the requirements of the Conceptual Framework and accounting standards, and that meets the information needs common to users who are unable to prepare financial statements tailored specifically to satisfy all of their information needs, is known as a general purpose financial statement special purpose financial statement demand financial statement true and fair financial statement QUESTION 7 A financial statement designed to meet the needs of a specific group or to satisfy a specific purpose is known as a general purpose financial statement special purpose financial statement demand financial statement true and fair financial statement QUESTION 9 The broad role of accounting, and of a corporate report and corporate reporting is to inform relevant about the extent to which the actions for which an organisation is deemed to be responsible (which in itself is a controversial issue as people can have very different views about the responsibilities of organisations have actually been fulfilled. stakeholders directors managers compliance officers QUESTION 10 One of the reasons why regulators require reporting entities to comply with accounting standards is that this perceived to increase the comparability of the information being produced by different reporting entities True False QUESTION 11 Certain classes of property, plant and equipment, for example, aircraft. might comprise a number of individual component parts. How does A458 116 paragraph 43 require these components be accounted for? The components can be measured as one asset. There is a prescribed unit of measurement for recognition that must be followed Only one depreciation rate can be used for the asset. Each component with a significant cost must be depreciated separately ponent with a significant cost must be depreciated separately. QUESTION 12 O'Briens Construction Ltd exchanged equipment that had a book value of $40 000 for a truck that had a book value in the other entity's books) of 538 000. The fair value of the equipment is $45 000, and the fair value of the truck is 548 000. Further cost incurred to prepare the truck for use by O'Briens was 5700 for sgnage What is the acquisition cost of the truck? 548 700 $40 000 548 000 $45 700 QUESTION 13 current assets that a government intends to preserve indefinitely because of their unique historical, cultural or erwironmental attributes are known as heritage assets Intangible assets environmental assets agricultural assets QUESTION 14 Using the cost model outlined in AASB 116 to measure property, plant and equipment at acquisition which of the following costs would not be included? Directly attributable costs initial estimates of dismantling and removal costs 12-month servicing plan Purchase price