QUESTIONS is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services prior to the commencement of commercial production or use. O investigation O development O production O planning QUESTION 10 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 $38 000. The fair value of the equipment is 545 000, and the fair value of the truck is 548 000. Further cost incurred to prepare the truck for use by O'Briens was $700 for signage. What is the acquisition cost of the truck? 548 700 540 000 548 000 $45 700 QUESTION 11 An accountant is not sure how to recognise an asset that is purchased in excess of fair value. Which of the following actions will you recommend? O Recognise the asset at fair value and the excess as goodwill O Recognise the asset at fair value and the excess as a loss on purchase O Recognise the asset at fair value and the excess as receivable from supplier O Recognise the asset at cost QUESTION 12 Non-current assets that a government intends to preserve indefinitely because of their unique historical, cultural or environmental attributes are known as heritage assets O intangible assets O environmental assets agricultural assets QUESTION 13 Which of the following statements is true of the revaluation model in AASB 116? O It is the preferred model of managers. O It is required under AASB 116. O Once adopted, the firm can no longer revert back to the cost model. O None of the given options are correct. QUESTION 14 The requirement that assets shall not have a 'carrying amount above their is a central foundation of financial reporting, O recoverable amount net amount debts cash flows QUESTION 15 Both AASB 116 and AASB 13 provide some guidance on determining fair values. It is emphasised that fair values are determined on the basis that the entity is a going concern and that there is no need or intention to O perform a revaluation O invest O liquidate its assets O acquire other assets QUESTION 16 AASB 116 requires that a revaluation decrement should be treated as an expense of the period that is included in profit or loss and which might be referred to as on revaluation. a profit O a loss O a decrement O again