CR Quiz 1 Essay

Question 1
0 out of 1 points

In adopting International Financial Reporting Standards (IFSRs), the Australian Accounting Standards Board (AASB) has generally:

Correct Answer:
D.
issued its own standards based on IASB’s and ‘re-badged' them as AASB’s.

Question 2
1 out of 1 points

In accordance with Corporations Act, which of the following companies will be required to conform to the relevant Australian Accounting Standards when preparing their financial reports?
I. Proprietary Company with gross revenues of $25 million, gross assets of $8 million and number of EFT employees totalling 50
II. Proprietary Company with gross revenues of $12 million, gross assets of $12 million and EFT employees totalling 60
III. Company listed on a securities exchange
IV. Company that has publicly traded debt on issue
V. Reporting entities

Correct Answer:
A.
I, III, IV and V only

Question 3
1 out of 1 points

The Corporations Act requires which of the following statements to be included in a Directors' Declaration?

Correct Answer:
A.
All of the given answers should be included.

Question 4
1 out of 1 points

Which of the following factors should be considered in order to determine whether an entity is a reporting entity when it is not obvious that users exist who would be dependent on the financial reports of the entity?

Correct Answer:
B.
separation of management from those with economic interest in the entity and economic or political importance/influence.

Question 5
1 out of 1 points

The Framework for the Preparation and Presentation of Financial Statements outlines two underlying assumptions of financial statements. These are:

Correct Answer:
D.
accrual basis of accounting and going concern assumption.

Question 6
1 out of 1 points

According to the Framework for the Preparation and Presentation of Financial Statements, which of the following is consistent with the definition of income?

Correct Answer:
D.
increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.

Question 7
1 out of 1 points

Positive Accounting Theory seeks to:

Correct Answer:
B.
explain and predict which accounting methods management is likely to select from available choices.

Question 8
1 out of 1 points

Within the principal/agent perspective of PAT, the price-protection approach is:

Correct Answer:
D.
The principal pays the agent a lower salary on the basis that the agent is expected to undertake opportunistic behaviour.

Question 9
1 out of 1 points

Debt contracts will:

Correct Answer:
A.
occasionally restrict accounting techniques used by a firm.

Question 10
1 out of 1 points

Firms are more likely to be subject to political costs when:

Correct Answer:
C.
They are highly visible, in the media or other arenas, often as a result of high profits.

Wednesday, 26 March 2014 11:04:23 PM EST

Question 1
1 out of 1 points

The only body with the power to veto a standard recommended by the AASB is:

Correct Answer:
A.
the Australian Parliament.

Question 2
1 out of 1 points

The Corporations Act requires which of the following to be included in a Directors' Declaration?
I. State whether in their opinion the financial statements comply with accounting standards and the Corporations Act.
II. State whether in their opinion the financial statements give a true and fair view of the financial position and financial performance of the entity.
III. State whether or not in their opinion, when the declaration was made, there were reasonable grounds to believe that the company would be able to pay its debts as they fall due.
IV. Provide details of directors' emoluments.
V. State principal activities of the entity.

Correct Answer:
A.
I, II and III only

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