NPM :_ NAME :__________________________

Write down the answer : true or false, along with the reason
 The major financial statements used under IFRS include the statement of changes in
financial position and the statement of stockholders’ equity.

 The International Accounting Standards Board issues IFRS.

 The 2nd level of the IASB’s conceptual framework provides the qualitative characteristics
that make accounting information useful and the elements of financial statement.

 The first level of the conceptual framework identifies the recognition and measurement
concepts used in establishing accounting standards.

Cross (x) on the most correct answer

 Accrual accounting is used because
a. cash flows are considered less important.
b. it provides a better indication of ability to generate cash flows than the cash basis.
c. it recognizes revenues when cash is received and expenses when cash is paid.
d. none of the above.

 The major financial statements include all of the following except:

a. Statement of financial position. c Statement of comprehensive income
b. Statement of changes in financial position d Statement of stockholers equity

 Which of these statements regarding the IFRS and U.S. GAAP is correct?
a. U.S. GAAP is considered to be "principles-based" and more detailed than IFRS.
b. U.S. GAAP is considered to be "rules-based" and less detailed than IFRS.
c. IFRS is considered to be "principles-based" and less detailed than U.S. GAAP
d. Both U.S. GAAP and IFRS are considered to be "rules-based", but U.S. GAAP tends
to be more complex.

 What is the quality of information that enables users to better forecast future operations?
a. Reliability. c Comparability
b. Materiality. d Relevance

 Expensing the cost of a simple calculator when it is acquired is an example of which

constraint?
a. Materiality. C Conservatism
b. Cost-benefit. D Industry Practices

Essay

Income statement and retained earnings statement.

Wooble Corporation's capital structure consists of 50,000 ordinary shares. At December 31,
2016 an analysis of the accounts and discussions with company officials revealed the following
information:
 Sales ¥1,200,000
Purchase discounts 18,000
Purchases 642,000
Loss on discontinued operations (net of tax) 42,000
Selling expenses 128,000
Cash 60,000
Accounts receivable 90,000
Share capital 200,000
Accumulated depreciation 180,000
Dividend revenue 8,000
Inventory, January 1, 2011 152,000
Inventory, December 31, 2011 125,000
Unearned service revenue 4,400
Accrued interest payable 1,000
Land 370,000
Patents 100,000
Retained earnings, January 1, 2011 290,000
Interest expense 17,000
General and administrative expenses 150,000
Dividends declared 29,000
Allowance for doubtful accounts 5,000
Notes payable (maturity 7/1/14) 200,000
Machinery and equipment 450,000
Materials and supplies 40,000
Accounts payable 60,000

The amount of income taxes applicable to ordinary income was ¥48,600, excluding the tax
effect of the discontinued operations loss which amounted to ¥18,000.

Instructions
(a) Prepare an income statement up to gross profit line
(b) Prepare an income statement up to income from operations
(c) Prepare an income statement up to income from continuing operations
(d) Prepare an income statement up to net income along with earning per share presentation
(e) Prepare a retained earning statement