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Question 1
Free
True/False

The IASB Conceptual Framework has the force of law.

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True

False

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Question 2
Free
True/False

One of the benefits of the Conceptual Framework is that it provides parameters for the exercise of judgement in resolving accounting issues.

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True

False

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Question 3
Free
True/False

When an IASB standard conflicts with the Conceptual Framework,the former prevails.

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True

False

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Question 4
Free
True/False

The Conceptual Framework defines principles for a specific accounting recognition,measurement and disclosure matter.

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False

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Question 5
Free
True/False

The Conceptual Framework suggests that the relevance characteristic outweighs the faithfully represented characteristic if the financial statement is to be rendered useful.

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Question 6
True/False

The objective of financial statements is to provide future oriented information to help investors make business decisions.

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True
False
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Question 7
True/False

Relevance and faithfully represented characteristics are placed as overriding qualities of financial statements over other qualitative characteristics

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True
False
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Question 8
True/False

A separate recognition criteria for equity is not set forth in the Conceptual Framework because it represents a residual interest in the assets of an entity.

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True
False
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Question 9
True/False

Social accountability is considered in the Conceptual Framework as part of the objectives of general purpose financial reports.

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True
False
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Question 10
True/False

The IASB and US FASB are jointly developing a common conceptual framework to guide both standard setters in developing separate standards for their constituents.

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True
False
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Question 11
True/False

For the preparation and presentation of financial statements,Europe adopts the IASB Conceptual Framework.

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True
False
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Question 12
True/False

The IASB and US FASB are jointly developing a common conceptual framework because this is necessary for the Convergence Project,which aims to converge two sets of accounting standards.

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True
False
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Question 13
True/False

Prudence is exercised in the preparation and presentation of financial statements when asset values are never shown in excess of their realisable values but could be understated,and liabilities are never to be understated.

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True
False
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Question 14
True/False

The efficiency perspective is consistent with limiting accounting policy choices in the interest of consistency and comparability.

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True
False
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Question 15
True/False

The trade-off between relevance and faithful representation requires exercise of judgment constrained by timeliness and costs versus benefits.

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True
False
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Question 16
True/False

The recognition criteria for liabilities are consistent with those for assets.

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True
False
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Question 17
True/False

Transactions or events that cannot be linked to a 'cost' or a 'market price' are not recognised.

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True
False
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Question 18
Multiple Choice

A central goal in establishing a conceptual framework of accounting will be to obtain general consensus on:

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A
the scope and objectives of financial reporting.
B
the qualitative characteristics that financial information should possess.
C
what the elements of financial reporting are, including agreement on the characteristics and recognition criteria for assets, liabilities, income, expenses and equity.
D
the scope and objectives of financial reporting and the qualitative characteristics that financial information should possess.
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Question 19
Multiple Choice

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?

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A
separation of management from those with economic interest in the entity
B
economic or political importance/influence
C
financial characteristics
D
separation of management from those with economic interest in the entity and economic or political importance/influence
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Question 20
Multiple Choice

Mr and Mrs K Urban are partners in Urban Plc,a music shop with sales revenue of €5 000 000 per annum,total assets of €10 000 000 and employees totalling 15.Urban Plc is:

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A
a reporting entity because there are at least two users of a financial report.
B
not likely to be a reporting entity because it is unlikely to have users dependent on its financial reports.
C
likely to be a reporting entity because there are two shareholders and it is an exempt proprietary entity.
D
not a reporting entity because small proprietary companies are frequently not considered reporting entities.
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