QUESTION 1 Which one of the following statements is incorrect? A. When Generally accepted accounting practice (GAAP) applies to a specific country, the reference to this country is included in the name of the GAAP. B. International Financial Reporting Standards (IFRS) deal with the recognition, measurement, presentation and disclosure requirements of financial statements, and the standards are based on the IFRS Conceptual Framework for Financial Reporting. C. In instances where a Standard is in conflict with the Conceptual Framework, the requirements of the standard must be adhered to. D. In South Africa the International Financial Reporting Standards (IFRS) is an ultimate financial reporting standard for state owned entities like Eskom. Reset Selection Question 2 of 10 2.5 Points QUESTION 2 The two most important qualities which financial information must have to make it useful are the following: A. Relevance and reliability B. Relevance and detail representation C. Relevance and faithful representation D. Relevance and materiality Reset Selection QUESTION 3 Which one of the following statements is incorrect? A. Derecognition is the removal of an asset or liability in the financial statements of an entity. B. The basic accounting equation is, assets + equity = liabilities. C. Equity is the residual interest D. The recognition criteria of an asset or liability in the financial statements is whether an element is relevant and faithfully represented. Reset Selection Question 4 of 10 2.5 Points QUESTION 4 Which one of the following is the correct definition of an asset in the financial statements? A. An item that can generate economic benefits. B. A present economic resource controlled by a reporting entity as a result of past events. C. A resource controlled by an entity as a result of a past event which will lead to future economic benefits. D. A present obligation of a reporting entity to transfer an economic resource as a result of past event. Reset Selection