Ch. 5 - quiz Flashcards
The overarching objective of IFRS accounting is to provide decisionuseful information, in particular, for investors.
True or False
True
To be decision-useful, information must be relevant, i.e., capable of making a difference to the decision maker.
True or False
True
Decision-usefulness can only be defined with reference to a specific user of financial statements. However, different users may have different information needs.
True or False
True
The going-concern assumption assumes that the entity will be liquidated within the next period and not continue its operations.
True or False
False
The IFRS framework defines equity simply as the residual interest in the assets of the entity after deducting all its liabilities.
True or False
True
Other comprehensive income (OCI) are gains and losses from changes in current values of assets and liabilities that are not reported in the statement of profit or loss.
True or False
True
Historical cost information is often very relevant to financial statement users, but in comparison to current value information (e.g., fair value) historical cost information is typically less reliable.
True or False
False
Indicate whether assets exist in the following case:
company has entered a 9-month lease agreement to rent a business office
Yes or No
Yes
Indicate whether assets exist in the following case:
costs of a high-level executive development course for the company’s top management
Yes or No
No
Indicate whether assets exist in the following case:
company has acquired the right to use a well-known brand name
Yes or No
Yes
Indicate whether assets exist in the following case:
expenditure on a promising research project
Yes or No
Yes
Indicate whether assets exist in the following case:
building bequeathed to a company
Yes or No
Yes
Indicate whether assets exist in the following case:
unsigned, documented contractual agreement to build specialised equipment for a client
Yes or No
No
Indicate whether assets exist in the following case:
exploration project to find oil in the arctic sea (10% chance of finding oil that can be exploited commercially)
Yes or No
Yes
Indicate whether assets exist in the following case:
the company holds a 5-year option to acquire property which was purchased by the company a year ago
Yes or No
Yes