4

Question 1

According to FASB and IASB, the quality of information that is users forecast future information is:

Answer 1

Predictive Value

Question 2

Characteristic that enhances useful information that is relevant and faithfully represented:

Answer 2

Timeliness

Question 3

Information that has predictive value, and/or confirming value, and is material:

Answer 3

Relevance

Question 4

Disclosures of accounting policies (and all other disclosures) are an integral part of the:

Answer 4

Financial Statements

Question 5

What does the summary of significant accounting policies include?:

Answer 5

Measurement basis, accounting principles and methods, criteria, and policies such as depreciation methods, basis of consolidation, revenue recognition, etc…

Question 6

Required disclosures that IFRS requires, that GAAP doesn’t:

Answer 6

IFRS requires the statement of compliance, in addition to the judgements made to prepare the financial statements.

Question 7

What should footnote disclosures include:

Answer 7

They should include information on changes in stockholders equity as well as any other information about significant asset and/or liability accounts.

Question 8

Concentration risk attributes:

Answer 8

Concentration exists as of the financial statement date.
The concentration makes the entity vulnerable to the risk in the near future, and will cause severe impact.
It is reasonably possible the the events will cause a severe impact from the vulnerability will occur.

Question 9

What is the balance sheet classification of marketable securities and debt securities:

Answer 9

They are categorized as Investments in the BS.

Question 10

Anticipated losses on disposals must be recognized:

Answer 10

In year which the loss occurs

Question 11

Criteria to recognize a liability when exiting or disposal activities:

Answer 11

1. Obligating event occurred
2. Event results in present obligation to transfer asset or to provide services in the future
3. Entity has little or no discretion to avoid the future transfer of assets or providing of services

Question 12

How should a periodic payment of interest be classified?

Answer 12

Accrued liability

Question 13

How should a liability secured by collateral be classified?

Answer 13

Loan payable

Question 14

How to record equity securities that are created to pay short term liabilities. In this case, the equity securities were issued subsequent to year end but before issuance of FS.

Answer 14

In this case short term liabilities would be netted against the equity securities.

Question 15

Balloon note definition:

Answer 15

Payment which is not fully amortized over the term of the note, therefore leaving the balance due at maturity.

Question 16

Accretion expense formula

Answer 16

Beginning ARO “X” Risk-adjusted rate

Question 17

Under IFRS, A decommissioning Liability is the same as an ARO under US GAAP.

Answer 17

Any change in the value of the liability will be recognized in profit or loss.

Question 18

Compensated absences generally includes vacation pay but excludes:

Answer 18

sick pay