Tổng hợp trắc nghiệm Kế toán quốc tế 1

Tổng hợp trắc nghiệm Kế toán quốc tế 1
Topic 1: Conceptual framework
1. Which one of the following would be classified as a liability?
a. Expansion is planning to invest in new machinery and has been quoted a price of $570,000.
b. Reckless purchased an investment 9 months ago for $120,000. The market for these
investments has now fallen and Reckless’s investment is valued at $90,000. (S)
c. Carter has estimated the tax charge on its profits for the year just ended at $165,000.
d. Dexter’s business manufactures a product under licence. In 12 month’s time the licence
expires and Dexter will have to pay $50,000 for it to be renewed.
2. Which of the following is a possible advantage of a rules-based system of financial reporting?
a. It prevents a fire-fighting approach to the formulation of standards
b. It ensures that no standards conflict with each other (S)
c. It offers accountants more protection in the event of litigation
d. It encourages the exercise of professional judgement*
3. Which of the following basic elements of financial statements is more associated with the
statement of financial position than the income statement?
a. Gains
b. Expenses
c. Income
d. Equity
4. Which of the following staments is relation to income is true?
a. Gains are normally reported separately from revenue in the Statement of profit or loss and
other comprehensive income due to the different probabilities attached to that type of
income.
b. The conceptual framework requires that all items of income are reported on a net basis.
c. The conceptual framework defines income as an increase in economic benefits which results in
an increase in equity.*
d. Gains and revenue are different in nature and therefore are recognised as separate elements
of the financial statements per the conceptual framework. (S)
5. The International Accounting Standards Board’s (IASB’s) Conceptual Framework includes all of the
following except:

a. Comparability*
b. Relevance
c. Neutrality
d. Materiality (S)
6. Which of the following best describes the role of the IFRS Advisory Coucil?
a. To select the members of the IASB
b. To prepare interpretations of international Accounting Standards
c. To promote the use of International Accounting Standards among its members
d. To provide the IASB with the views of its members on standard setting projects


7. What is meant by comparability when discussing fianancial accouting information?
a. Information is timely
b. Information that is measured and reported in a similar fashion across companies
c. Information is reasonably free from error
d. Information has predictive or feedback value
8. Comparability is identified as an enhancing qualitative characteristic in the IASB’s Conceptual
Framework for Financial Reporting. Which of the following does NOT improve comparability?
a. Disclosing discontinued operations in financial statements
b. Restating the financial statements of previous years when there has been a change of
accounting policy
c. Prohibiting changes of accounting policy unless required by an IFRS or to give more relevant
and reliable information
d. Applying an entity’s current accounting policy to a transaction which an entity has not
engaged in before
9. Which of the following is a fundamental quality of useful accounting information?
a. Comparability
b. Faithful representation
c. Consistency
d. Conservatism

10. What is a purpose of having a conceptual framework?
a. To enable the profession to more quickly solve emerging practical problems and to provide a
foundation from which to build more useful standards
b. To make sure that economic activity can be identified with a particular legal entity
c. To provide comparable information for different companies
d. To segregate activities among competing companies
11. The conceptual framework for financial reporting lists the qualitative characteristics of financial
statements: (i) comparability; (ii) verifiability; (iii) timeliness; (iv) understandability; (v) relevance;
(vi) faithful representation. Which two of the above are not included in the enhancing qualitative
characteristics listed by the conceptual framework?
a. (v) and (vi) *
b. (iv) and (v)
c. (ii) and (v)
d. (i) and (vii) (S)
12. The International Accounting Standards Board’s (IASB’s) Conceptual Framework includes all of the
following except:
a. Objective of financial reporting
b. Supplementary information*
c. Qualitative characteristics of accounting information (S)
d. Elements of financial statements
13. What is the objective of general-purpose financial reporting?


a. To provide a metric for financial information used to determine when the boundary between
two or more entities should be disregarded and the entities considered to be a licensing
arrangement
b. To provide companies with the option to select information that favors one set of interested
parties over another
c. To provide users with financial information that implies total freedom from error
d. To provide financial information about the reporting entity that is useful to present and

potential equity investors, lenders, and other creditors in making decisions in their capacity as
capital providers
14. Which of the following statements is incorrect in relation to the recognition criteria for elements
of the financial statements?
a. Income is recognised when an increase in future economic benefits related to a decrease in an
assets or an increase in a liability that has arisen can be measured reliably
b. Liabilities are recognised when it is probable that an outflow of resources embodying
economic benefits will result from the settlement of a present obligation and the amount at
which settlement will take place can be measured reliably
c. Assets are recognised when it is probable that future economic benefits will flow to the entity
and the asset has a cost or value that can be measured reliably (S)
d. Because equity is the arithmetic difference between assets and liablities, a separate
recognition criteria for quity is not needed in the conceptual framework
15. Changing the mothod of inventory valuation should be reported in the financial statements under
what qualitative characteristic of accounting information?
a. Consistency
b. Comparability
c. Verifiability
d. Timeliness
16. Which of the following accounting treatments correctly applies the principle of faithful
representation?
a. Excluding a subsidiary from consolidation because its activities are not compatible with those
of the rest of the group
b. Reporting a transaction based on its legal status rather than its economic substance
c. Recording the whole of the net proceeds from the issue of a loan note which is potentially
convertible to equity shares as debt (liability) (S)
d. Allocating part of sales proceeds of a motor vehicle to interest received even though it was sold
with 0% (interest free) finance
17. Which of the bodies listed below is responsible for revewing International Accounting Standards
and issuing guidance on their application?

a. IFRS Advisory Council
b. IFRS Interpretation Committee
c. International Accounting Standards Board
d. IFRS Foundation


18. Company A issuing its annual financial reports within one month of the end of the year is an
example of which enhancing quality of accounting information?
a. Timeliness
b. Verifiability
c. Comparability
d. Understandability
19. Which of the following is not true concerning a conceptual framework in accounting?
a. It should be a basis for standard-setting
b. It should allow practical proplems to be solved more quickly by reference to it
c. It should be based on fundamental truths that are derived from the laws of nature
d. All of these answers are correct
20. Which of the following measurement base(s) should be used by an entity according to the
conceptual framework for financial reporting?
a. Current cost
b. Any of the above
c. Present value
d. Historicial cost
21. Which of the following is a fundamental quality of useful accounting information?
a. Relevance
b. Neutrality
c. Comparability
d. Materiality

Topic 2: Property, Plant and Equipment (PPEs) (IAS16)

1. Which one of the following would occur if the purchase of computer stationary was debited to the
computer equipment at cost account?
a. An overstatement of profit and an understatement of non-current assets (S)
b. An overstatement of profit and an overstatement of non-current assets
c. An understatement of profit and an overstatement of non-current assets
d. An overstatement of profit and an understatement of non-current assets
2. Which of the following statements are correct? 1/ IAS 16 Property, plant and equipment requires
entities to disclose the purchase date of each asset. 2/ The carrying amount of a non-asset is the
cost or valuation of that assets less accumulated depreciation. 3/ IAS 16 Property, plant and
equipment permits entities to make a transfer from the revaluation surplus to retained earning for
excess depreciation on revalued assets. 4/ Once decided, the useful life of a non-current asset
should not be changed.
a. 1, 2 and 3 (S)
b. 1, 2 and 4
c. 2 and 3
d. 2 and 4
3. B acquired a lorry on 1 May 20X0 at a cost of $30,000. The lorry has an estimated useful life of four
years, and an estimated resale value at the end of that time of $6,000. B charges depreciaton on


the straight line basic, with a proportionate charge in the period of acquistion. What will the
depreciation charge for the lorry be in B’s accounting period to 30 Sept 20X0?
a. $5,000.
b. $3,000.
c. $2,500. ((30000-6000)/4/12*5)
d. $2,000.
4. The carrying value of a company’s non-current assets was $200,000 at August 20X0. During the
year ended 31 Jul 20X1, the company sold non-current assets for $25,000 on which made a loss of
$5,000. The depreciation charge for the year was $20,000. What was the carrying value of noncurrent assets at 31 Jul 20X1?
a. $155,000

b. $160,000
c. $150,000 (200.000-20.000-25.000-5.000)
d. $180,000
5. A company bought a property 4 years ago from 1 Jan for $170,000. Since then property prices have
risen substantially and the property has been revalued at $210,000. The property was estimated as
having a useful life of 20 years when it was purchased. What is the balance on the revaluation
surplus reported in the statement of financial position?
a. $136,000
b. $34,000
c. $210,000
d. $74,000 (Khấu hao 4 năm=170.000/20*4=34.000; GTGS=170.000-34.000=136.000;
ĐGLtăng=210.000-136.000=74.000)
6. Which one of the following statements correctly defines non-current assets?
a. Non-monetary assets without physical substance that are controlled by the entity and from
which future benefits are expected to flow
b. Assets in the form of materials or supplies to be consumed in the production process
c. Assets that are held for use in the production of goods or services and are expected to be used
during more than one accounting period
d. Assets which are intended to be used by the business on a continuting basic, including both
tangible and intangible assets that do not meet the IASB definition of a current asset
7. W bought a new printing machine. The cost of machine was $80,000. The installation cost was
$5,000 and the employees received training on how to use the machine, at a cost of $2,000.
Before using the machine to print customer’s order, a test was undertaken and the paper and ink
cost $1,000. What should be the cost of machine in the company’s statement of financial position?
a. $85,000
b. $80,000
c. $86,000
d. $88,000

8. A company sells machine B for $50,000 cash on 30 Apr 20X4. Machine B cost $100,000 when it
was purchased and has a carrying value of $65,000 at the date of disposal. What are the journal
entries to record the disposal of machine B?
a. Dr Accumulated depreciation: $35,000; Dr Loss on disposal (SPL): $15,000; Dr Cash: $50,000 /
Cr Non-current assets – cost: $100,000
b. Dr Accumulated depreciation: $35,000; Dr Cash: $50,000 / Cr Non-current assets – cost:
$65,000; Cr Profit on disposal (SPL): $20,000
c. Dr Accumulated depreciation: $35,000; Dr Non-current assets – cost: $65,000 / Cr Profit on
disposal (SPL): $20,000; Cr Cash: $50,000
d. Dr Accumulated depreciation: $65,000; Dr Loss on disposal (SPL): $35,000 / Cr Non-current
assets – cost: $100,000
9. Which of the following should be disclosed for tangible non-current assets according to IAS 16
Property, plant and equipment? 1/ Depreciation methods used and the total depreciation
allocated for the period. 2/ A reconciliation of the carrying amount of non-current assets at the
beginning and end of the period. 3/ For revalued assets, whether an independent valuer was
involved in the valuation. 4/ For revalued assets, the effective date for revaluation
a. 1, 2, 3 and 4
b. 1, 3 and 4
c. 1, 2 and 4
d. 1 and 2
10. What is the purpose of charging depreciation in accounts?
a. To allocate the cost of a non-current asset over the accounting periods expected to benefits
from its use
b. To account for wearing out’ of the asset over its uses
c. To ensure that funds are available for the eventual replacement of the asset
d. To reduce the cost of the asset in the statement of financial position to its estimated market
value

Topic 5. Intangible asset (IAS 38)
1. Mini Corp. acquires a patent from Maxi Co. in exchange for 2,500 shares of Mini Corp.’s €5 par

value ordinary shares and €85,000 cash. When the patent was initially issued to Maxi Co., Mini
Corp.’s shares were selling at €7.50 per share. When Mini Corp. acquired the patent, its shares
were selling for €9 a share. Mini Corp. should record the patent at what amount?
a. €85,000
b. €107,000 (9*2.500+85.000)
c. €103,750
d. €97,500
2. Goodwill is:
a. None of the above.
b. The excess of the fair value of a business over the fair value of all net identifiable assets
c. Only recorded by the seller of a business.
d. Amortized over the greater of its estimated life or forty years.


3. The intangible asset goodwill may be:
a. written off directly to retained earnings.
b. capitalized only when created internally.
c. capitalized either when purchased or created internally.
d. capitalized only when purchased.
4. According to IAS 38 Intangible assets, which of the following statements about research and
development expenditure are correct? 1.Research expenditure, other than capital expenditure on
research facilties, should be recognised as an expense as incurred; 2.In deciding whether
development expenditure qualifies to be regconised as an asset, it is necessary to consider
whether there will be adequate finance available to complete the project; 3.Development
expenditure regconised as an asset must be amortised over a period not exceeding five years.
a. 1, 2
b. 2, 3
c. 1, 3
d. 1, 2, 3
5. An exclusive 20-year right to manufacture a product or use a process is a:

a. Franchise.
b. Patent.
c. Copyright.
d. Trademark.
6. IFRS requires that start-up costs and initial operating losses during the early years be capitalized.
a. True
b. False
7. Which of the following methods of amortization is normally used for intangible assets?
a. Straight-line
b. Double-declining-balance
c. Sum-of-the-years’-digits
d. Units of production
8. Which of the following costs should be capitalized in the year incurred?
a. Development costs.
b. Costs to successfully defend a patent.
c. Organizational costs.
d. Costs to internally generate goodwill.*
9. The legal life of a patent is generally:
a. Life of the inventor plus fifty years.
b. Indefinite.
c. Twenty years.
d. Forty years.
10. Which of the following intangible assets should be shown as a separate item on the statement of
financial position?


a.
b.
c.
d.

Trademark
Goodwill
Patent
Franchise

11. According to IAS 38 Intangible assets, which of the following are intangible non-current assets in
the accounts of Ita Co? 1. A patent for a new glue purchased for $20,000 by Ita Co; 2. Development
costs capitalized in accordance with IAS 38; 3. A licence to broadcast a television series, purchased
by Ita Co for $150,000; 4. A state of the art factory purchased by Ita Co for $1.5 million.
a. 1, 2 and 3
b. 1 and 3
c. 2 and 4
d. 2, 3 and 4
12. Under International Financial Reporting Standards, research expenditures are:
a. Expensed if unsuccessful, capitalized if successful.
b. Capitalized if certain criteria are met.
c. Expensed in the period they are determined to be unsuccessful.
d. Expensed in the period incurred.
13. In January of 2013, Vega Corporation purchased a patent at a cost of $200,000. Legal and filing
fees of $50,000 were paid to acquire the patent. The company estimated a 10-year useful life for
the patent and uses the straight-line amortization method for all intangible assets. In 2016, Vega
spent $40,000 in legal fees for an unsuccessful defense of the patent. The amount charged to
income (expense and loss) in 2016 related to the patent should be:
a. $215,000.
b. $25,000.
c. $40,000.
d. $65,000.

14. Cromartie LTD. prepares its financial statements according to International Financial Reporting
Standards. During 2013 the company incurred $1,245,000 in research expenditures to develop a
new product. An additional $756,000 in development expenditures were incurred after
technological and commercial feasibility was established and after the future economic benefits
were deemed probable. The project was successfully completed and the new product was
patented before the end of the 2013 fiscal year. Sale of the product began in 2014. What amount
of the above expenditures would Cromartie expense in its 2013 income statement?
a. $2,001,000.
b. $1,245,000.
c. $756,000.
d. $0.
(Under IFRS, only the $1,245,000 in research expenditures is expensed. The development costs
are capitalized as an intangible asset.)
15. Impairment testing is conducted annually for both limited–life and indefinite-life intangible assets.
a. True
b. False
16. Which of the following does not describe intangible assets?
a. They are classified as long-term assets.
b. They lack physical existence.


c. They are monetary assets.
d. They provide long-term benefits.
17. Rich Corporation purchased a limited-life intangible asset for €270,000 on May 1, 2017. It has a
useful life of 10 years. What total amount of amortization expense should have been recorded on
the intangible asset by December 31, 2019?
a. €72,000 (2 năm 8 tháng-270.000/10/12*32)
b. €81,000
c. €54,000
d. €0

18. If a new patent is acquired through modification of an existing patent, the remaining book value of
the original patent may be amortized over the life of the new patent.
a. True
b. False
19. Short Corporation purchased Hathaway Co. for $52,000,000. The fair value of all Hathaway's
identifiable tangible and intangible assets was $48,000,000. Short will amortize any goodwill over
the maximum number of years allowed. What is the annual amortization of goodwill for this
acquisition?
a. $400,000.
b. $200,000.
c. $100,000.
d. $0.*
(mua bị lỗ khơng có goodwill)
20. Depreciation, depletion, and amortization:
a. Are all handled the same in arriving at taxable income.
b. All generally utilize the same methods of cost allocation.
c. All of the above are correct.
d. All refer to the process of allocating the cost of long-term assets used in the business over
future periods.*

Topic 3: Impairment (IAS 36)
1. When an impairment loss occurs, the carrying amount of the asset should be reduced to its
a. Recoverable amount
b. Net present value
c. Value in use
d. Market value
2. What is the treatment of an impairment loss under IAS 36?
a. Write it off against profit immediately
b. Record a liability in the SOFP for “Impairment losses”
c. Record it in Equity under “Revaluations”

d. Write it off against profit over a defined period agreed by management
3. Which of the following is an external indication of impairment?


a.
b.
c.
d.

Damage to an asset
Decline in market value
Management commitment to undergo a restructuring
Ongoing losses

4. When the recoverable amount of an asset is less than its carrying value in the Statement of
Financial Poisition, the asset is…
a. Flawed
b. Impaired
c. in negative equity
d. in a revaluation deficit
5. The amount, which an asset is recorded in the Statement of Financial Position, less any
accumulated depreciation and impairment losses, is called…
a. Present value
b. Carrying amount
c. Fair value
d. Net realisable value
6. IAS 36 presumes that budgets and forecasts while arriving at cash flow projections should be…
a. not more than ten years
b. more than ten years
c. not more than five years

d. not more than three years
7. In measuring Value in Use, the discount rate used for discounting the cash flows should be the…
a. Post-tax rate that reflects the entity’s assessment of time value of money and risks specific to
the asset
b. Pre-tax rate that reflects the market assessment of time value of money and risks specific to
the asset
c. Pre-tax rate that reflects the market assessment of time value of money and risks specific to
the entity’s competitors
d. Pre-tax rate that reflects the entity’s assessment of time value of money and risks specific to
the asset
8. If the fair value less costs to sell for an asset cannot be determined, then recoverable amount is
its…
a. Replacement value
b. Fair value
c. Market value
d. Value in use
9. The carrying amount of an asset is defined under IAS 36 as…
a. The amount at which an asset is recognised after adding any revaluation gains and
accumulated impairment losses
b. The amount at which an asset is recognised after deducting any accumulated depreciation and
adding back any accumulated impairment losses


c. The amount at which an asset is recognised after deducting any accumulated depreciation and
accumulated impairment losses
d. The amount at which an asset is recognised after adding any accumulated depreciation and
accumulated impairment losses
10. Which of the following is not covered by IAS 36 – Impairment?
a. Motor Vehicles
b. Intangible assets

c. Property, Plant and Equipment
d. Inventory
11. When should a reversal of a goodwill impairment be recognised?
a. Never
b. Immediately
c. At the end of the accounting period
d. At management’s discretion
12. When a cash-generating unit has an impairment loss, the loss must first be applied to…
a. on the entire cash generating unit on a pro-rata basis
b. any assets obviously impaired
c. against all assets on a pro-rata basis
d. goodwill
13. A cash-generating unit is defined as…
a. the largest identifiable group of assets that generates cash inflows that is largely independent
from the cash inflows of other assets.
b. the smallest identifiable group of assets that generates cash outflows that are largely
independent from the cash outflows of other assets
c. the easiest identifiable group of assets that generates cash inflows that are largely
independent from the cash inflows of other assets
d. the smallest identifiable group of assets that generates cash inflows that are largely
independent from the cash inflows of other assets.
14. Which of the following is not permitted as a cost to sell under IAS 36?
a. Standard wages for employees
b. Auctioneers fees
c. Cost to dismantle machine
d. Transport costs for machine
15. When should a reversal of an impairment loss be recognised?
a. Immediately*
b. Never
c. None of these

d. When approved by the board of directors
16. Value in use is…


a. The undiscounted future value of present cash flows expected to arise from continuing use of
asset, and from its disposal at the end of its useful life.
b. The discounted present value of future cash flows expected to arise from continuing use of
asset, and from its disposal at the end of its useful life
c. The discounted future value of future cash flows expected to arise from continuing use of
asset, and from its disposal at the end of its useful life
d. The discounted present value of historical cash flows expected to arise from continuing use of
asset, and from its disposal at the end of its useful life.
17. When should an impairment loss be recognised?
a. Immediately
b. At management’s discretion
c. Over a number of accounting periods
d. When requested by the entity’s auditors
18. How often should a cash generating unit to which goodwill has been assigned, be tested for
impairment?
a. As often as practicable
b. Every six months
c. At management’s discretion
d. Every year
19. Under IAS 36, when it is not possible to calculate the recoverable amount of a single asset, what
should be done?
a. A rough estimate should be provided
b. The value should remain unchanged
c. A disclosure should be provided in the notes to the financial statements
d. The recoverable amount of its cash generating unit should be calculated
20. The present value of expected future cash flows generated by an asset, plus its expected disposal

value is called…
a. Net present value
b. Value in use
c. Fair value
d. Market value

Topic 4: Investment property (IAS 40)
1. Which of the following term does this statement define: “ the amount of cast or cast equivalents
paid for the fair value of other consideration given to acquire an asset at the time of its acquisition
or construction”?
a. Deemed cost
b. Present value
c. Cost
d. Fair value


2. ABC Ltd. chooses fair value model for its investment property. At 1 Jan 10X8, ABC Ltd. transferred
an investment property to an owner-occupied property. Investment property has originally cost of
$20 million; accumulated depreciation up to the date of transfer was $12 million, there was no
impairment loss; property’s fair value at 1 Jan 20X8 was $14 million. What was the carrying value
of the Owner-occupied property recorded at 1 Jan 20X8?
a. $8 million
b. $14 million
c. $12 million
d. $2 million
3. Which of the following properties owned by an entity would be classified as an investment
property?
a. A new office building used as an entity’s head office, purchased specifically in order to exploit
its capital gains potential
b. Land purchased for its investment potential. Planning permission has not been obtained for

building construction of any kind*
c. A bungalow used for executive training
d. A property that has been leased to a tenant, but which is no longer required and is now being
held for resale

4. Which of the following does not define investment property?
a. Property held for capital appreciation (***)
b. Property held to earn rental (*)
c. (*) and (**)
d. Property used in the production or supply of goods or services (**)
5. Which of the following are examples of investment properties?
1. Land held for long-term capital appreciation;
2. Land held for undetermind future use but not currently in use;
3. A building owned by the undertaking (or held by the undertaking under a finance lease) and
leased out;
4. A building that vacant, but is held to be leased out via one, or more, operating leases;
5. Property held for sale in the ordinary course of business;
6. Property being built on behalf of third parties;
7. Owner-occupied property;
8. Property that is being built for use as investment property;


9. Existing investment property that is being redeveloped for continued use as investment
property;
10. Property that is leased to another undertaking, under a finance lease.
a. 1 to 4 only
b. 1 to 7 and 10 only
c. 1 to 10 all
d. 1 to 4 and 8 to 9 only*
6. The following costs should be accounted for as: 1. Start-up cost (unless they are necessary to bring

the property to the condition necessary for it to be capable of operating tin the manner intended
by management); 2. Operating losses incurred before the investment property achieves the
planned level of occupancy; 3. Abnormal amounts of wasted material, labour or other resources
incurred in constructing or developing the property.
a. Extraordinary items
b. Expenses
c. (Capitalised as) fixed assets
7. An entity purchased land and building for leasing out under operating lease. Following
expenditures related to the acquisition: purchase price: 100; broker’s commission: 10; property
transfer tax: 20. What is the cost of the property?
a. 110
b. 130
c. 120
d. 100
8. ABC Ltd. owns a property which has two parts, part A and part B. Part A is used to earn rental
income; Part B is used for administrative purpose. These two parts cannot be sold separately. How
should ABC classify this property?
a. Part A should be classified as Investment property; part B should be classified as Owneroccupied property
b. Part A should be classified as Investment property; ; part B should be classified as Inventories
c. Entire property should be classified as Investment property if the portion of B is insignificant
d. Entire property should be classified as Owner-occupied property if the portion of B is
insignificant
9. Which of the following should be classified as Investment property?
a. Land and building held to earn rental income
b. Property being constructed on behalf of third parties
c. Land and building held for sale in the ordinary course of business
d. An equipment held to earn rental income
10. Which of the following properties fall under the definition of investment property?
a. Property being constructed on behalf of third party
b. Property occupied by an employee

c. None of them
d. A building owned by an entity and leased out under an operating lease


11. Entity measure its investment property under:
a. Cost model, fair value model or revaluation model
b. Cost model or revaluation model
c. Cost model or Fair value model
d. Cost model only
12. Which of the following statements is true with regards to an investment property?
a. An investment property unlike owner-occupied property shall always be depreciated over its
usefull life.
b. The value in use of investment property is significantly higher than of owner-occupied
property
c. An investment property generates cash flows largely independently of the other assets held by
an entity.
d. An investment property unlike owner-occupied property shall always be measured at its
historical cost
13. ABC Ltd. chooses cost model for its investment property. At 1 Jan 10X8, ABC Ltd. transferred an
investment property to an owner-occupied property. Investment property has originally cost of
$20 million; accumulated depreciation up to the date of transfer was $12 million, there was no
impairment loss; property’s fair value at 1 Jan 20X8 was $14 million. What was the carrying value
of the Owner-occupied property recorded at 1 Jan 20X8?
a. $14 million
b. $8 million*
c. $2 million
d. $12 million
14. ABC Ltd. owns a property which has two parts, part A and part B. Part A is used to earn rental
income; Part B is used for administrative purpose. These two parts can be sold separately. How
should ABC classify this property?

a. Part A should be classified as Investment property; part B should be classified as Owneroccupied property*
b. Part A should be classified as Investment property; ; part B should be classified as Inventories
c. Entire property should be classified as Investment property if the portion of B is insignificant
d. Entire property should be classified as Owner-occupied property if the portion of B is
insignificant
15. Investment property can held by: 1. The owner; 2. The lessor, under a finance lease; 3. A lessee,
under a finance lease.
a. 1 to 3 all
b. 1 and 2 only
c. 1 and 3 only
16. Under IAS 16 – Investment Property, where should a gain or loss on disposal be recognized?
a. None of them
b. Profit or loss statement
c. Statement of changes in equity
d. Statement of Financial Position


17. An investment property should initially be measured at:
a. Fair value
b. Cost
c. Net realizable value
d. Market value
18. Which of the following should be classified as an investment property?
a. Land and building held for short-term sale in the ordinary course of business
b. Land and building held for administrative purposes.
c. Land and building held for used in the production of goods
d. Land and building held for long-term capital appreciation
19. Choose the correct statement:
a. Fair value of investment property carried under cost model should be disclosed in the
Statement of Other Comprehensive Income

b. Fair value of investment property carried under cost model should be disclosed in the
Statement of financial position. (S)
c. Fair value of investment property carried under cost model should not be disclosed in any
statement. (S)
d. Fair value of investment property carried under cost model should be disclosed in the
Disclosure note.
20. ABC Ltd. chooses cost model for its investment property. It sold an investment property that
originally cost $20 million. The selling price was $6 million. Depreciation of $12 million had been
recorded up to date of sale. There was no accumulated impairment loss. What does this disposal
resullt in?
a. $14 million loss
b. $14 million gain
c. $2 million loss
d. $2 million gain

Topic 7: Presentation of Financial statements (IAS 1)
1. The financial statement which summarizes operating, investing, and financing activities of an entity
for a period of time is the
a. Income statement
b. Statement of financial position
c. Statement of cash flow
d. Retained earning statement
2. The occurrence that most likely would have no effect on 2019 net income is the
a. Sale in 2019 of an office building contributed by stockholder in 1970
b. Correction of an error in the financial statements of a prior period discovered subsiquent to
their issuance*
c. Collection in 2019 of a dividend from an investment
d. Stock purchased in 2005 deemed worthless in 2019

3. IAS 1 permits to present expenses in the statement of profit or loss and other comprehensive
income in the classification
a. By segment and by function
b. By segment and by nature
c. By function and by nature
d. By segment and by operations
4. Which of the following would be a suitable accounting policy note for disclosure in the financial
statements relating to inventory?
a. Inventory is valued at the lower of cost and net realisable value for each separate product or
item.
b. Inventory is valued at the higher of cost and net realisable value for each separate product or
item.
c. Inventory is valued at the lower of total cost and total net realisable value.
d. Inventory is valued at cost for each separate product or item.
5. The example of a current liability is
a. Trade payable with payment deferred beyond 1 year
b. Deferred tax liability
c. Provision for warranty repairs within the second year of guarantee after sale
d. Long-term loan that became payable due to breach of covenants. The bank does NOT require
immediate repayment and agrees with the original repayment schedule.*
6. Which of the following would be a suitable accounting policy note for disclosure in the financial
statements relating to land and building?
a. The entity uses the same accouting policy for land anf building as it does for intangible assets.
b. Land and buildings are accounted for at cost and are not depreciated as the director belive
that the market value of land and buildings will increase over time
c. Land and buildings are accounted for at cost , and the buildings are written off over their
expected useful life of fifty years on a straight-line basis.
d. Land and buildings are accounted for at cost and are written off over their expected useful life
of fifty years on a straight-line basis.
7. Rosalie Corporation is located in London but does business throughout Europe. The compan builds

and sells equipment used in manufacturing pharmaceuticals. On December 31, 2019, Rosalie has
trading securities valued at £63,000; goodwill valued at £450,000; prepaid insurance valued at
£36,000; patents valued at £210,000; and a customer list valued at £390,000. On Rosalie
Corporation’s statement of financial position at December 31, 2019, what amount should be
reported as intangible assets?
a. £1,149,000
b. £1,050,000
c. £660,000
d. £1,113,000
8. The example of a current asset is:
a. Deferred tax asset


b. Trade receivable with payment deferred beyond 1 year
c. Available-for-sale financial assets
d. Inventories with quick turnover
9. Which of the following is not an acceptable major asset classification?
a. Investments
b. Deferred charges
c. Property, plant, and equipment
d. Current assets
10. Which of the following should be reported for share capital?
a. The shares authorized
b. The shares issued
c. All of these choices are correct
d. The shares outstanding
11. What identification information does NOT need to be presented on the face of the financial
statements
a. The presentation currency and the level of rounding
b. Date of the end reporting period or the period covered by the set of financial statements or

notes
c. Whether the financial statements are individual or group
d. Date of preparation of the financial statements
12. Dividends paid to ordinary shareholders shall be presented:
a. In the statement of changes in equity as a decrease in equity*
b. In the statement of profit or loss as a financial expense
c. In the statement of profit or loss as other operating expense
d. In the statement of other comprehensive income as a decrease in equity
13. The example of a non-current asset is:
a. Inventories with long production and completion times
b. Deferred tax asset
c. Government bond repayable in 3 months*
d. Trade receivable
14. A company presented its expenses in the profit or loss as follows: cost of sales, administrative
expense, marketing expenses, distribution expenses and other expenses. This presentation is:
a. By operation
b. By nature
c. By function
d. By segment
15. Treasury shares should be reported as a(n):
a. Investment
b. Other asset
c. Current asset


d. Reduction of equity
16. What components shall a complete set of financial statements include?
a. Statement of financial position, statement of comprehensive income, statement of changes in
equity, statement of cash flows, annual report
b. Statement of financial position, statement of profit or loss and other comprehensive income,

statement of changes in equity, statement of cash flows, accounting policies and notes
c. Statement of financial position, statement of other comprehensive income, statement of
changes in equity, statement of cash flows, directors report
d. Statement of financial position, income statement, statement of changes in equity, statement
of cash flows, accounting policies and notes, annual report
17. Working capital is equal to:
a. Current assets minus current liabilities
b. Current assets plus current liabilities
c. Current assets
d. Current liabilities
18. The principal benefit of separately reporting discontinued operations and continuing operations is
to enhance:
a. Intraperiod continuity
b. Predictive ability
c. Comprehensive reporting
d. Consistency in reporting
19. Which of the following companies is a going concern?
a. Oil and gas company operating in Egypt has just received a court order to close the factory and
stop all operations in Egypt within 1 year
b. A bank suffers in the mortgage crash and state refuses to bail it out
c. A trading company is in serious liquidity problems and a court granted an order to repay debt
of CU 1 000 000 to a creditor immediately. The company must sell its assets in order to settle
liability.
d. State-owned company runs out of cash and is not able to repay its liabilities and salaties on
time. According to applicable laws, the state must provide a low-interest loan to this company.
20. A manufacturing company recognized a valuation provision to inventories due to their
obsolescence. Does IAS 1 allow offsetting inventory valuation provision against inventory balance
in the statement of financial position:
a. Yes, because in this case, offsetting leads to better understanding of the financial statements
by their users

b. No, because IAS 1 does not permit offsetting of assets and liabilities unless is it allowed by
another standard
c. No, because IAS 1 states that assets and liabilities shall not be offset*
d. Yes, because IAS 1 specifically says that this situation is not offsetting.
Topic 10: Provision, Contingent Liabilities and Contingent Assets (IAS 37) (sai 3 cau, chua kt da)


1. A provision should be recorded when:
a. An undertaking has a present obligation legal, or constructive.
b. An estimate can be made of the obligation
c. 1-3 are all present*
d. It is probable that payment will be required.
2. According to IAS 37, a constructive obligation arises:
a. When an entity has created valid expectations in the affected parties based on the previous
experience, best practices or legislation.
b. As a result of a contract, some legislation or other operation of law.
c. As a result of a construction contract in line with IAS 11 Construction contracts.
d. When an entity has indicated to other parties that it will accept certain responsibilities and as
a result, an entity has created a valid expectation of those other parties that it will discharge
those responsibilities.*
3. According to IAS 37, an onerous contract is:
a. A contract in which the unavoidable costs of meeting the obligations under the contract
exceed the unavoidable costs of meeting the obligations of similar contract on the market.
b. A contract that was entered into under duress, or is concluded between related parties under
unfarourable market conditions.
c. Any contract in which the net present value of cash flows is lower than 0 and the entity
achieves future operating loss
d. A contract in which the unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it*
4. The following items have to be considered in finalizing the financial statements of Q, a limited

liability company: 1. The company gives warranties on its products. The company’s statistics show
that about 5% of sales give rise to a warranty claim; 2. The company has guaranteed the overdraft
of another company. The likelihood of a liaility arising under the guarantee is assessed as possible.
According to IAS 37 Provisions, contingent liabilities and contingent assets, what is te correct
action to be taken in the financial statements for these items?
a. 1,2: create a provision
b. 1: create a provision; 2: disclose by note only*
c. 1: disclose by note only; 2: create a provision
d. 1: disclose by note only; 2: no action
5. When a restructuring involves the sale of an operation, at what point may an obligation arise
under IAS 37?
a. When an expression of interest is filed
b. When a binding sale agreement is executed*
c. When business is marketed for sale
d. When a preferred buyer is located
6. According to IAS 37, a provision is:
a. A liability of uncertain timing or amount*
b. A liability of uncertain timing, amount and settlement
c. A present obligation arising from past events


d. A possible obligation arising from past events
7. Manufacturer of chemical products applies strong environmental policy worldwide and undertakes
to clean up the contaminated water and land. This company cause an environmental damage in
the country A, in which there is no legislation that would oblige the company to remove
contamination. Should the company recognize provision for cleanup costs in line with IAS 37?
a. No, because there is no obligation arising from past event.
b. Yes, because there is a legal obligation arising from past event
c. Yes, because there is a constructive obligation arising from past event (contamination)*
d. No, because there is no legislation in the country A to enforce the removal of contamination.

8. Which of the following statements about provisions and contingences is/are correct? 1.A company
should disclosure details of the changes in carrying value of a provisions from the beginning of the
end of the year; 2. Contingent assets must be recognised in the financial statements in accordance
with the prudence concept; 3. Contingent liabilities must be treated as actual liabilities and
provided for if it is probable that they will arise.
a. All three statements are correct
b. 2 and 3 only
c. 1 and 3 only*
d. 3 only
9. Which of the following is not a disclosure requirement for a contingent liability?
a. Indication of uncertainties relating to the amount
b. Possibility of any reimbursement
c. Exact timing of outflow*
d. Estimated financial effect
10. Which of the following statements about contingent assets and contingent liabilities are correct?
1. A contingent asset should be disclosed by note if an inflow of economic benefits is probable; 2.
A contingent liability should be disclosed by note if it is probable that a transfer of economic
benefits to settle it will be required, with no provision being made; 3. No disclosure is required for
a contingent liability if it is not probable that a transfer of economic benefits to settle it will be
required; 4. No disclosure is required for either a contingent liability or a contingent asset if the
likelihood of a payment or receipt is remote.
a. 2 and 3 only
b. 1 and 4 only
c. 1, 2 and 4
d. 2, 3 and 4
11. Which of the following is a restructuring cost under IAS 37?
a. Relocation of staff
b. Investment in new distribution networks
c. Marketing
d. Relocation of business activities from one region to another*

12. IAS 37 provision include:
a. Impairment of assets


b. Doubtful debts
c. Depreciation
d. Environmental provisions*
13. When shall the provision be recognized in line with IAS 37?
a. When all other condition are met*
b. When an entity has a present obligation as a result of past event
c. When it is probable that the outflow of resources embodying economic benefits will be
required to settle the obligation
d. When a reliable estimate can be made of the amount of the obligation
14. If a provision relates to a large population of items, the amount of te provision should be caculated
as:
a. The present value of the maximum expenditure that could possibly be required to settle the
obligation
b. The minimum expenditure that could possibly be required to settle the obligation*
c. The maximum expenditure that could possibly be required to settle the obligation
d. The expected value of the expenditure that will be required to settle the obligation
15. When a provision is needed that envolves a number of outcome, the provision is caculated using
the expected value of expenditure. The expected value of expenditure is to total expenditure of:
a. Each possible outcome divided by the number of outcomes
b. Each possible outcome multiplied by the number of outcomes
c. Each possible outcome weighted according to the probability of each outcome happening*
d. Each possible outcome
16. M’s paint shop has suffered some bad pubicity as a result of a customer claiming to be suffering
from skin rashes as a result of using a new brain of paint sold by M’s shop. The customer launched
a court action against M in Nov 20X3, claiming damages of $5,000. M’s lawyer has advised him
that the most probable outcome is that he will have to pay the customer $3,000. What amount

should M include as a provision in his accounts for the year ended 31 Dec 20X3?
a. $3,000*
b. $nil
c. $5,000
d. $8,000
17. D Co is a business that sells second hand cars. If a car develops a fault within 30 days of the sale, D
Co repair it free of charge. At 30 Apr 20X4 D Co had made a provision for repairs of $2,500. At 30
Apr 20X5, it caculated that the provision should be $2,000. What entry should be made for the
provision in D Co’s statement of profit or loss for the year to 30 Apr 20X5?
a. A credit of $500*
b. A charge of $500
c. A charge of $2,000
d. A credit of $2,000
18. If the possibility of a penalty is remote:
a. Record a contingent liability


b. Record a provision
c. Do nothing
d. Disclosure a contingent liability*
19. Mobile Co sells goods with a one year warranty under which customers are covered for any defect
that becomes apparent withing a year of purchases. In calendar year 20X4, Mobile Co sold 100,000
units. The compan expects warranty claim for 5% of units sold. Half of these claims will be for a
major defect, with an average claim value of $50. The other half of these claim will be for a minor
defect, with an average claim value of $10. What amount should Mobile Co include as a provision
in the statement of financial position for the year ended 31 Dec 20X4?
a. $300,000
b. $125,000
c. $150,000*
d. $25,000

20. Contingent asset is recorded when cash inflows are:
a. Received
b. Virtually certain
c. Probable*
d. Uncertain

Topic 8: Accounting policies, estimates and errors (IAS 8)
1. Applying a new policy to transactions other events and conditions as if that policy had always been
applied. This is:
a. Change in accounting policies
b. Retrospective restatement
c. Retrospective application
d. Change in accounting estimate
2. Change in accounting policy does not include:
a. Change from the practice (convention) of paying as Chrismas bonus one month’s salary to staff
before the end of the year to the new practice of paying one-half month’s salary only.
b. Change of new method of valuation of inventory from weighted-average to FIFO.
c. Change of new method of valuation of inventory from FIFO to weighted-average.
d. Change in useful life from 10 years to 7 years
3. Under IFRS, a voluntary change in accounting method may only be made by a company if:
a. A new standard mandates the change in method.
b. There is no prohibition of the method in the standards.
c. The new method provides reliable and more relevant information.
d. Management prefers the new method.
4. When a public shareholding company changes an accounting policy voluntarily, it has to:
a. Treat it prospectively and adjust the effect of the change in the current period and future
periods.
b. Account for it retrospectively

c. Treat the effect of the change as an extraordinary item.
d. Inform shareholders prior to taking the decision.
5. Adjustment of the carrying amount of an asset or a liability or the consumption of an asset. This
defines:
a. Misstatements
b. A change in accounting estimates
c. Accounting policies
d. A change in accounting policies
6. Correcting the recognition measurement and disclosure of amounts in financial statements as if a
prior-period error had never occurred. This is:
a. Retrospective application
b. Retrospective restatement
c. Change in accounting policies
d. Change in accounting estimate
7. Specific principles bases conventions rules and practices applied in presenting financial
statements. This defines:
a. Accouting policies
b. Accouting errors
c. Accouting estimates
d. Prospective application
8. XYZ Inc. change its method of valuation of inventories from weighted-average method to first-in,
first-out (FIFO) method. XYZ Inc. should account for this change as
a. A change in accounting policy and account for it prospectively
b. A change in accounting policy and account for it retrospectively
c. A change in estimate and account for it prospectively
d. Account for it as a correction of an error and account for it retrospectively
9. When an independent valuation expert advises an entity that the salvage value of its plant and
machinery had drastically changed and thus the change is material, the entity should
a. Change the annual depreciation for the current year and the future years
b. Retrospectively change the depreciation charge based on the revised salvage value

c. Ignore the effect of the change on annual depreciaiton, because changes in salvage values
would normally affect the future only since these are expected to be recovered in future.
d. Change the depreciation charge and treat it as a correction of an error.
10. When it is difficult to distinguish between a change of estimate and a change in accouting policy,
then an entity should
a. Since this change is a mixture of two types of changes, it is best if it is ignored in the year of
the change; the entity should then wait for the following year to see how the change develops
and then treat it accordingly.
b. Treat the entire change as a change in estimate with appropriate disclosure
c. Treat the entire change as a change in accounting policy