F2

Question 1

what exchange rates that is used to translate Cash Flows?

Answer 1

weighted average exchange rates, and Historical cost.

Question 2

what are the requirements of IFRS regarding Foreign currency Traslation?

Answer 2

1- Monetary items are translated at Year end spot rate.

2-Non-monetary items measured at historical cost are translated at historical exchange rate.

3-If the Functional currency is the same as the presentation currency, the profits and losses will be reported at the period.

4-If the Functional currency is Not the same as the presentation currency, Gains and losses are reported at “OTHER Comprehensive income”…. NOT deferred to future periods.

Question 3

Under IFRS, how is the presentation currency is defined?

Answer 3

the presentation currency is defined as the currency in which the financial statements are presented. and in which the currency the company is primarily operates.

Question 4

for IFRS, reporting purposes, currencies are defined as..

Answer 4

Foreign, functional and presentation.

Question 5

Recognizing depletion expense is an example of accounting process of what?

Answer 5

Allocation and Amortization.

Question 6

according to FASB, the objective of financial reporting is?

Answer 6

is to provide Information to Users…

Question 7

what is an accrued expense means?

Answer 7

expense that is incurred but not yet paid.

Question 8

Accrual —accrual-basis recognition precedes (leads to) cash receipt/expenditure

Answer 8

Revenue—recognition of revenue earned, but not received

Expense—recognition of expense incurred, but not paid

Question 9

Deferral —cash receipt/expenditure precedes (leads to) accrual-basis recognition

Answer 9

Revenue—postponement of recognition of revenue; cash is received, but revenue is not earned
Expense—postponement of recognition of expense; cash is paid, but expense is not incurred

Question 10

what is Current assets?

Answer 10

are “cash and other assets or resources commonly identified as those which are reasonably expected to be (1) realized in cash, (2) sold, or (3) consumed during the ordinary operating cycle of the business.”

1. Cash available for current operations
2. Inventories
3. Trade receivables
4. Other receivables collectible in 1 year
5. Installment, deferred accounts, and notes receivable
6. Prepaid expenses

Question 11

According to the installment method of accounting, how the gross profit on an installment sale is recognized in income?

Answer 11

In proportion to the cash collections received.

Question 12

According to the cost recovery method of accounting, gross profit on an installment sale is recognized in income when?

Answer 12

After cash collections equal to the cost of sales have been received., “conservative approach”

Question 13

what is the IASB Framework ?

Answer 13

IASB Framework has five elements: asset, liability, equity, income, and expense. The definition given is that of income. Note that income includes both revenues and gains.

Question 14

Which is an example of the expense recognition principle of associating cause and effect?

Answer 14

Sales commissions..because the response directly related to Revenue.

Question 15

According to the FASB conceptual framework, earnings…

Answer 15

Exclude certain gains and losses that are included in comprehensive income.

Question 16

When would a company use the installment sales method of revenue recognition?

Answer 16

When installment sales are material, and there is no reasonable basis for estimating collectability.

The installment method is a more conservative method of income recognition.

Question 17

Which of the following is true regarding the comparison of managerial to financial accounting?

Answer 17

Managerial accounting need not follow generally accepted accounting principles (GAAP) while financial accounting must follow them.

Question 18

Which is allowable for financial reporting under IFRS?

Answer 18

Lower of cost or net realizable value.

This answer is correct because IFRS allows the lower of cost or net realizable value to be used to value inventory.

Question 19

what are the IASB Framework has five elements?

Answer 19

asset, liability, equity, income, and expense

Question 20

According to the IASB Framework, the two criteria required for incorporating items into the income statement or statement of financial position are that

Answer 20

It meets the definition of an element and can be measured reliably.

Question 21

What is the purpose of reporting comprehensive income?

Answer 21

To report a measure of overall enterprise performance.