FAR1

Question 1

Currently reported net income = Physical Capital or Financial Capital?

Answer 1

Physical Capital

Question 2

Comprehensive income = Physical Capital or Financial Capital?

Answer 2

Financial Capital

Question 3

Criteria for recognizing an element of financial reporting under IFRS?

Answer 3

Probability of occurrence and Reasonable measurement

Question 4

Criteria for recognizing an element of financial reporting under US GAAP?

Answer 4

Measured in monetary terms and is Relevant and is Faithfully represented

Question 5

The fair value for an asset or liability is defined as…

Answer 5

The price that would be received when selling an asset or paid when transferring a liability in an orderly transaction between market participants

Question 6

Which characteristics of accounting information primarily allows users of financial statements to generate predictions about an organization?

Answer 6

Relevance

Question 7

Gift cards that have not been redeemed should be reported as…

Answer 7

a liability

Question 8

Describe a level 1 input for measuring the fair value of an asset or liability.

Answer 8

Unadjusted quoted prices for IDENTICAL assets or liabilities in an active market

Question 9

Describe a level 2 input for measuring the fair value of an asset or liability.

Answer 9

Quoted prices for SIMILAR assets or liabilities in an active market or…
Inputs that are principally derived from or corroborated by observable market data

Question 10

Describe a level 3 input for measuring the fair value of an asset or liability.

Answer 10

Inputs based on the reporting entity’s internal data