1.

What are the two key criteria for an item of property, plant & equipment to be recognised as an asset? (IAS 16)

A.

When it can be reliably measured

B.

When it is controlled by the entity

C. When it is probable that economic benefits will flow to the entity from the asset
When it has a residual value

D.

2.

What does IAS 16 state about how we should depreciate an asset?

A. All assets having a known useful life should be depreciated

B. Assets should be recognised in the balance sheet at their carrying amount
C. Assets should be depreciated by systematically allocating their depreciable amount over their useful life
D The carrying amount of an asset is the value recognised in the accounts after deducting depreciation and
. impairment losses

3.

How should an entity choose which depreciation method to use?

A. Always use 25% diminishing balance unless there is a good reason not to
B. The method which best reflects way we use up the value of the asset over its expected useful life
C. If the residual value is negligible you can ignore it when calculating the depreciable amount
D.Useful life and and residual value should be reviewed annually and any changes reported according to IAS 8
E. When determining useful life, expected usage and expected physical wear and tear must be considered

4. What are the 3 key elements used to decide whether an intangible fixed asset should be recognised in the
accounts?

Control, marketability, materiality

A.
B.
C.

Completion of development, control, identifiability

Control, identifiability, economic benefits

D. Intention to complete development, economic benefits, identifiability

5.

Research costs - What does IAS38, Intangible Assets, state is the accounting treatment for research costs?

A. All research costs should be written off at the time they are incurred in line with the Prudence Concept.
B Revenue costs are treated as expenses on the Income Statement whereas Capital costs are treated as Non-current
. Assets

6. Development expenditure - What does IAS38, Intangible Assets, state is the accounting treatment for
development expenditure?

A The balance sheet must not be overstated. All development costs relate to something which may never happen so
. they are written off.
B If the entity can demonstrate all of 6 key criteria then it can can show the cost as an Intangible fixed asset on the
. balance sheet

7. Which TWO of the following options show ALL 6 of the criteria an entity needs to demonstrate in order to
recognise development expenditure as a capital cost?

A
Sufficient resources to enable completion, cost can be reliably measured, how economic benefits will be achieved
.

B.

Identifiability, cost can be reliably measured, control

C. Intention to complete, technically feasible, usefulness or marketability

D.

Control, technically feasible, usefulness

8. IAS 36 Impairment of fixed assets - The present value of future net cash inflows to the entity from a Cash
Generating Unit is the definition of which value?
Value in use

A.
B.

Recoverable amount

C.

Carrying amount

9. What does the following definition describe? the higher of the fair value, less costs to sell, and the value in use of
an asset or cash generating unit (IAS 36)

A.

Carrying amount

B.

Recoverable amount

C.

Market value in an arm's length transaction

10. Why would we need to consider a Cash generating unit (group of assets) rather than an individual

non-current

asset when determining recoverable amount? (IAS36)

A. It is not economically viable to work out the future cash inflows from an individual asset
Materiality

B.

C. Because individual assets often don't create cash inflows on their own

11.

If the carrying amount (net book value) of an asset is below the recoverable amount, what is the name we give
to the difference between the two values? (IAS 36)

A.

Revaluation loss

B.

Impairment loss

C.

Notional loss on sale

12.

IAS 40, Investment property What types of property are considered to be investment property?

A.

Land held for capital appreciation

B.

Vacant land

C.

Empty warehouse
Property to let

D.

13.

IAS17 - LeasesWhich type of lease is normally long term and transfers all the risks and rewards of ownership?

A.

Finance lease

B.

Operating lease

14. IAS17 allows us to capitalise an asset on a finance lease, this increases our Net AssetsWhich of the following
criteria in our contract would indicate that we should NOT capitalise the leased asset? (IAS 17)

A.

Term of the lease is major part of the asset's useful life

B. At inception, PV of minimum lease payments is substantially all of the FV of the asset

C.
D.

Lessor is responsible for repairs

Ownership transferred at end of lease

E.Lessee has option to purchase at end of lease at price so much lower than Fair Value it is almost certain they will
exercise the option

15. IAS 2 requires stock to be valued at lower of cost and NRV By recognising that stock is worth less than what it
cost the entity, we have recognised the loss in the accounts before it has occurred ie before we have sold the
stock. This is in line with the _______ concept.
Matching

A.

Business Entity

B.
C.

Reliability

D.

Prudence

E. Historical Cost

1. How are the US GAAP and IFRS treat R&D?

A. R&D costs must be expensed.
A.
US GAAP

B. Allows capitalization of R&D costs.

B.
IFRS

2. What standard provide very specific and industry guidance about constitutes revenue, how revenue
should be measured, and the effect of timing on recognition?

A
US GAAP
.
B.IFRS

3. Which of the following accounting practices is not permitted by the

IAS?

A
Capitalization of development expenditure
.
B.The LIFO method of inventory valuation
C Capitalization of certain types of
. leases
D.Capitalization of goodwill

4. Debt covenant (agreement) violations must be cured by fiscal year

end.

A
IFRS
.
B.US GAAP

5. What does IAS 38 stand for? (check all that

aplies)

A
Intangible Asset.
.
B.R&D.
C.Impairment
D.Property, Plant & Equipment.

6. Why invest internationally? (check all that

aplies)

A
Portfolio diversification internationally
.
B.Growth industries
C.Market move similarly but not with perfect correlation

7. What are the Barriers to International Harmonisation? (check all that

aplies)

A
Actual implementation of full Standards or all Standards may not occur.
.
B.Culture
C.USA
D.Initial costs of implementation (management,...)
E.Difficult to chose the enforcer of international standards
F.Global investors
G.Job mobility

8. Have a look at facts about London Stock Exchange: (check all that
aplies)

A
Accept all EU accounting under "mutual(relative) recognition"
.
B.Don`t accept Japanese accounting
C
Accepts US GAAP and IASs(International Accounting Standards)
.
D.Strong element of foreign listing in London.

9. Which standards are non specific about the timing and measurement of recognition; lacks industry-specific
guidance?

A
IFRS
.
B.US GAAP

10. What does IAS 2 (Inventories) stand for?

A
Lower of cost and net realizable value
.
B
Costs include purchase cost, conversion cost and other costs to bring to present condition and location
.

C.FIFO or average cost

D.LIFO is permitted

11.

What does IAS 36 stand for?

A
Property, Plant & Equipment
.
B.Inventories
C.Impairment
D.Intangible Assets

12. US GAAP permits LIFO?

A
True
.
B.False

13. What factors explain choice of listing? (check all that aplies)
A
Size of company in domestic market.
.
B.Importance of foreign
sales.
C.Importance of investment in foreign countries.
D
Importance of foreign employees for the company.
.
E.Language of the country.

14. USA. SEC - The Securities and Exchange Commission is

A
A government agency - underpins FASB`s authority
.
B.A non government agency - underpins FASB`s authority

15. Meaning of "transparency" that users are fully informed on: (check all that
aplies)

A
Process of preparing information
.
B.Procedures, e.g. data collection
C.Assumptions
D.Assurance/audit

16. China implemented IFRS (for all listed companies)

in:

A January
. 2007
B.January
2008

C.January
2009

17. SEC (The Securities & Exchange Commission) regulates not all of listing on US exchanges?(check all
that aplies)

A
True
.
B.False

18. What does IAS 38 stand for?

A
Intangible Asset
.
B.Impairment
C.Inventories

19. Operation of IASB (check all that aplies)?

A
Head office in London
.
B.14 members, technical expertise
C
Issues Standards (IFRS)and interpretations
.
D
IFRICs (International Financial Reporting Interpretation Committee)
.
E.Standard Advisory Council - wide geographical representation

20. How many steps US GAAP implement in asset impairment?

A
Single-step impairment
.
B.Two-step impairment
C.Tree-step impairment

21. USA does not permit upward revaluation?

A
True
.
B.False

22. What does IASC (formed in 1973) stand

for?

A
International Accounting Standards Committee
.
B.International Accounting Standards Commission

23. What is Flexebility stand s for?

A
Relationship between company law and tax law.
.

B.Formats of financial statement.

24. Communist accounting was based

on:

A
Needs of economic and production planning
.
B
Making specified profits as a monopoly producer
.
C.Returning profits to the state as an investor
D
The requirements as laid down by the Chartered Russian Accounting Professionals
.

25. What are IASB (International Accounting Standards Board) objectives? (check all that aplies)
A
Highly quality, understandable and enforceable standards.
.
B.Promote use and rigorous(strict)application.
C
Convergence of national accounting standards and IAS to high-quality solutions.
.

26. What are the Costs of foreign listening? (check all that aplies)
A
Underwriting (insurance)of new offers
.
B.Registration and regulation
C.Initial disclosure requirements
D.Control & oversight systems
E.Clearance & settlements of share deals
F.Local stock market too small or lacks liquidity

27. Evaluation of transparency. Standard & Poor`s gives transparency and disclosure score based on:
(check all that aplies)

A
Assumption.
.
B.Audit.
C.Ownership structure and investor relations.
D.Financial transparency and disclosure.
E.Board and management structure and processes.

28. What does IAS 2 stand for?

A
Inventories.
.
B.Accounting Policies, Estimates and Errors.
C.Impairment.

29. What does IFRIC stand for?

A
International Financial Reporting Issues Committee
.
B.International Financial Recommendation and Interpretations committee
C.International Financial Reporting Interpretation Committee
D.International Financial Reporting Issues Council

30. What does Remuneration report consist?

(check all that

aplies)

A
What are the senior managers/directors earning from the company?
.
B.Does their performance justify the remuneration?
C.Disclosure of policy for payment
D.Disclosure of amounts received by each

31. What does IAS 38 (R&D) stands for (check all that aplies)?
A
Research is an expense.
.
B
Development cost must be capitalized under specified condition.
.
C.Some reversals allowed but not goodwill.

32. Which of the following are cultural values developed by Hofstede?

A
Professionalism
.
B.Statutory control
C.Power distance
D.Conservatis
m

33. Is it true that IAS 38 recognize internally generated goodwill, brands, titles, customer list
rtc.?

A
True
.
B.False

34. What is the barrier to International harmonisation?

A
USA
.
B.Comparability
C.Easier/Cheaper investment
D.Lower Audit cost

35. What year IFRS (International Financial Reporting Standards) was formed
in?

A
2002
.
B.2003
C.2001
D.2004

36. What is IAS 16 (Property, Plant & Equipment) stands for? (check all that aplies)
A
Cost model or Revaluation model.
.
B.If revalued must be regular.
C
Systematic depreciation under cost model
.
D.Impairment tests for loss of value (IAS 36)
E.Disclose policies, depreciation methods and lives, acquisition, disposals, revaluation, commitments,
impairments.
F.Importance of consistency.
G.Change accounting policy if required by standard or give more relevant and reliable information.

37. What IAS 8 (Accounting Policies, Estimates and Errors) stands for? (check all that
aplies)

A Importance of
. consistency(logicality).
B.Change accounting policy if required by standard or give more relevant and reliable information.
C
Restate prior period to adjust changes in policies and errors.
.
D.Changes in estimates in current year`s income.
E.If revalued must be regular.
F.Impairment test

38. Main purpose of IFRS (IASC before 2002)?

A
UNIFORMITY in Accounting Principles Internationally
.
B.Objectivity in Accounting Principles Internationally
C.Matching principle in Accounting Principles Internationally

39. What does Narrative reporting in thr USA consit of?

A
Management discussion and analysis.
.
B.Market risk disclosure.

C.Pro-forma (non-GAAP)financial statements

D.Internal control
E.Assumptions
F.Process of preparing information.

40. The UK. What does TRANSPARENCY cosist of?

A
Notes to accounts
.
B.Segmental
reporting
C.Narrative Reporting
D.Directors` remuneration details
E.Stricter rules on provision
F.Change to amortization of
goodwill

41.

USA - Financial Accounting Standards Board (FASB) is:

A
Public-sector organization that determines accounting standards
.
B
Private-sector organization that determines accounting standards
.

42. In what year Europe has adopted IFRS first time (International Financial Reportin
Standards)?

A
Year ended 31 December 2006
.
B.Year ended 31 December 2007

43. What are the Benefits of foregn listing? Public share offerings (check all that aplies)
A
Need to raise additional equity finance
.
B
Local stock market too small or lacks liquidity
.
C.Overcome national barriers
D.Control and oversight systems
E.Registration & Regulation
F.Listing to provide equity finance for overseas acquisition

44. Is it true that IAS 38 Recognize intangible asset, whether purchased or self-created, if probable benefits
and cost estimated reliable?

A
True
.
B.False

45. What authority does regulate all listings on US exchanges?

A
SEC (Securities and Exchange Commission)
.
B
ADR (American Depository Receipt)
.
C.US GAAP

46. China. What year Deng Xiaoping allowed marked-based

approach?

A
1984
.
B.1992
C.2000
D.1980

47. According to Grays (1988) theory, conservatism is most closely associated with:
A
High individualism and low uncertainty avoidance
.
B.Strong collectivism and strong uncertainty avoidance
C.Low power distance and high individualism
D
High power distance and low uncertainty avoidance
.

48. In what year SEC allows foreign private issuers to report using IFRS, dropping the GAAP reconciliation
requirement?

A
2005
.
B.2007
C.2009

49. Investment strategies for diversity. Invest in an index-based portfolio, innore company information. What
investment strategy is it?

A
Active
.
B.Passive
C.Mixed

50. Is it true that ADR is Certificate of ownership of shares in Co based ouside USA?
A
True
.
B.False

1. ____________ accounting was created to account for changes in the general price level and makes adjustments
to the historical costs of non-monetary assets to update for changes in the purchasing power of the currency.

A. General purchasing power

Current replacement cost

B.

Price level

C.

Current cost

D.

2. _________________ accounting was created to account for specific price changes by updating the values of nonmonetary assets from historical cost to the current cost to replace those assets.
General purchasing power

A.

Price level

B.

Current replacement cost

C.

Specific price

D.

3.

General purchasing power accounting includes purchasing power gains and losses in net income.
True

A.

False

B.

4.

General purchasing power accounting requires all assets to be restated based on the general price index (GPI).
True

A.

False

B.

5.

IFRS requires companies operating in hyperinflationary economies to use ______________ accounting.

A.

Current replacement cost

B.

General purchasing power

6.

IFRS vs US GAAP definition of control over a subsiduary

A. IFRS
A.

Select a Match

B. US GAAP
B.

Select a Match

7.

IFRS vs US GAAP definition of control over a subsiduary

A. IFRS
A.

Select a Match

B. US GAAP

B.

Select a Match

8.

IAS 27 requires a parent to consolidate all subsidiaries unless,

A The subsidiary was acquired with the intention to be disposed of within 12 months and management is actively
. seeking a buyer
B. The subsidiary is dormant and its operations are insignificant to the company as a whole
C.

Management is actively seeking a buyer

A or b

D.

9.

US GAAP allows a subsidiary to be exluded from consolidation if it is being held for sale
True

A.

False

B.

10.

IFRS uses the ___________ method to account for business compbinations that are fully consolidated.
Pooling

A.

Historical cost

B.
C.

Purchase

D.

Fair value

11.

The purchase methods requires assets and liabilities of the subsidiary to be restated at their __________ as of
the date of acquisition.
Historical costs

A.
B.

Fair value

C.

Replacement value

12. IFRS allows the determination of the initial amount to measure subsidiaries assets and liabilities that are

acquired at under 100 percent through either the parent company concept or the economic unit aka the entity
concept.
True

A.

False

B.

13. The parent company concepts values subsidiary's assets and liabilities at book value plus the parent's
ownsership percentage of the difference between fair value and book value at the date of acquisition.
True

A.

False

B.

14. The economic unit or entity concept values subsidiary's assets and liabilites at 100 percent of their fair value at
the date of acquisition.

True

A.

False

B.

15.
A.

IFRS and US GAAP require goodwill to be tested for impairment annually.

True

False

B.

16.
A.
B.

The pooling of interest method is permitted in US GAAP

True
False