Question 12 1 Poi Which of the followings are the three essential criteria in the definition of an asset? 1. Future economic benefits IV. Present obligation II. Future sacrifices of economic benefits V. Controf m. Past Event VI. Ownership A) II, III, V. B) I, III, V. 1, II, IV. D TIV, VI. Question 13 The two fundamental qualitative characteristics of useful information are: A comparability and verifiability. B timeliness and understandability relevance and faithful representation. D) materiality and relevance. Question 14 1 Point The term 'bargain purchase option is not used explicitly in AASB 16 but is described as: A being in place when the lessee is guaranteed to undertake the option at the end of the lease. the option to purchase the asset at a price that is expected to be sufficiently lower that the fair value at the date the option becomes exercisable, for it to be reasonably certain at the inception of the lease, that the option will be exercised and being in place when the lessee is guaranteed to undertake the option at the end of the lease. the option to purchase the leased asset for significantly less than its cost at the date the option becomes exercisable, for it to be reasonably certain at the inception of the lease, that the option will be exercised. the exercise price of a purchase option if the lessee is reasonably certain to exercise that option. Question 15 Normative theories: A are based on what is happening in the world. B) predicts unobserved phenomena. explain why people behave in certain ways. prescribe what should be the case based on a specific objective. Question 16 Which regulatory body has the responsibility for overseeing the standard-setting process in Australia? A FRC (B) AASB ASIC APRA Question 17 Which of the following are considered in the AASB Framework as enhancing qualitative characteristics? (A) relevance, faithful representation, materiality and comparability B relevance, faithful representation, timeliness and understandability materiality, faithful representation understandability and comparability D verifiability, timeliness, understandability and comparability Question 18 1 Po In the case of a lease, the accounting treatment by the lessee could: (Aaccrue the lease payments and match them against revenues earned by using a unit of production method B recognise an asset and associated liability equal in value to the present value of the minimum lease payments provide note disclosure to the accounts and recognise the lease payments in the same way as a rental expense. D) calculate the IRR Implicit in the lease contract and disclose it in the notes to the account Question 19 1 Poin Ms Maple is an accounting cadet for one of the big accounting firms. She is a bit confused as to which of the following sources should be referred to first in dealing with an accounting issue. A auditing standards B industry practice conceptual framework accounting standards Question 20 What is the essential factor in identifying whether an entity is a reporting entity? A Whether the entity is listed on the ASX or not. (B) Existence of users who are able to demand financial statements to meet their specific needs. Total revenue earned D Existence of users dependent on general purpose financial statements to make decisions. Question 21 Minimum lease payments include: A) any bargain purchase option amount. B any rentals paid to reimburse the lessor for executory costs. contingent rentals. D service costs