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Question 1

regulations
what is the structure of an IFRS Standard (which of the following areas are included)?
Select one or more alternatives:

• objectives
• definitions
• conceptual framework
  introduction

Answer 1

objectives
defintions

Question 2

IFRS foundation
what is the aim for the IFRS foundation?
Select one alternative:
- to supervise the development within the global standard setting bodies in each country
-to develop globally generally accepted accounting standards and enforce them globally
-To develop high-quality ESG standards
-To develop high-quality accounting standards

Answer 2

To develop high-quality accounting standards

Question 3

qualitative characteristics
Which are included in the four enhancing qualitative characteristics?
Select one or more alternatives:

-Comparability
-Neutrality
-Stability
-Verifiability

Answer 3

comparability
verifiability

Question 4

P&L and OCI
What is the difference between the “profit and loss statement” (P&L) and “other
comprehensive income” (OCI)?
Select one alternative:
- OCI includes discontinued operations, write downs and gains/losses
- Certain standards require the company to present items in Other Comprehensive Income
and not in the P&L
- OCI includes revaluation of property in line with IAS40 and revaluation of biological assets in
line with IAS41
-OCI includes all revaluations a company perform over a period

Answer 4

Certain standards require the company to present items in Other Comprehensive Income
and not in the P&L

Question 5

Voluntary changes
If a company voluntarily change an accounting policy, what information must the company
present?
Select one alternative:
- They are not allowed to
- Recalculation of the previous year in both the income statement and balance sheet
- The reason why the new policy will provide more reliable and reliant information
- Recalculation of the previous year in a note

Answer 5

The reason why the new policy will provide more reliable and reliant information

Question 6

carrying amount
What is a carrying amount?
Select one alternative:
-The market value of the asset
- The historical cost for the asset
-The amount that is shown in the financial statements
- The current cost for the asset

Answer 6

The amount that is shown in the financial statements

Question 7

Capital costs on construction
If a company takes up a loan in a bank to use for construction of its own building - how will
the interest cost on the loan and the cost for equity be accounted for?
Select one or more alternatives:

-The cost for equity cannot be capitalized and included in the cost of the building.
-The interest cost should be included as a financial item in the P/L
-The cost for equity should be included in a revaluation reserv in equity and matched against
future depreciations.
-The interest cost should be capitalised and included in the cost of the building

Answer 7

-The cost for equity cannot be capitalized and included in the cost of the building.
-The interest cost should be capitalised and included in the cost of the building

Question 8

Intangible assets
Which of the following activities arises in the development phase and are possible to
capitalize?
Select one or more alternatives:

-Development of new original medicines.
-Research for new fuel for diesel engines.
-Design of a prototype
-Construction of a pilot plant

Answer 8

-Design of a prototype
-Construction of a pilot plant

Question 9

goodwill
Why is internally generated goodwill not accepted as an asset?
Select one alternative:

-It is generally related to customers and they cannot be separated from the company
without negative consequenses
-It consist mainly of long-term research and marketing expenses
-It is impossible to determine the cost
-It is not separable

Answer 9

It is impossible to determine the cost

Question 10

Impairment test
There are several examples of indication of an impairment that arises from an external
source of information. Which of the following are included?
Select one or more alternatives:

-Observable indications on a decline in asset value
-Significant changes have occurred in the market, to which the asset is dedicated
-A decline in the share price of the company
-An increase in the credit risk premium for the compamy

Answer 10

-Observable indications on a decline in asset value

-Significant changes have occurred in the market, to which the asset is dedicated

Question 11

Impairment test
What is a CGU?
Select one alternative:

-Corporate governance unit and refers to the board of directors responsibility for the asset
values in the balance sheet.
-Cash generating unit and is used in the valuation of goodwill
-Current generating unit of account and refers to the most recent development on the
market in which an asset operates.
-Closed government unit and refers to the calculation the management does to establish the
fair value of the intangible asset.

Answer 11

-Cash generating unit and is used in the valuation of goodwill

Question 12

leasing and rents
Throughout the period of use, the customer in a lease transaction must have two
requirements fulfilled - which?
Select one or more alternatives:

-It must be a registered contract between the owner and the user
-The user must have the right to obtain almost all the economic benefits from the use
-The user has the right to direct the use of the asset
-The user can not have a bargain purchase option after the lease period has expired

Answer 12

-The user must have the right to obtain almost all the economic benefits from the use
-The user has the right to direct the use of the asset

Question 13

leasing and rents
What is the incremental borrowing rate?
Select one alternative:
-The government bond rate for bonds with the same maturity as the lease-term, plus a
riskpremium for the company.
-The short-term government bond rate, plus a risk premium for the company.
-The interest rate the lessee would have to pay to borrow money
-A benchmark interest rate (like LIBOR or similar) plus a risk premium for the company.

Answer 13

The interest rate the lessee would have to pay to borrow money

Question 14

financial instrument
Define a financial asset.
Select one or more alternatives:
-A right to receive cash
-Equity instruments
-Advances from customer
-Inventory

Answer 14

-A right to receive cash
-Equity instruments

Question 15

financial instruments
How is the liability part in a compound financial instrument calculated (for example a loan
that is convertible to ordinary shares)?
Select one alternative:
-It should be presented as a liability until the conversion date, when it becomes equity.
-It should be presented as equity, since the holder can convert to ordinary share.
-It should be presented on a separate line, between liabilities and equity as hybrid capital.
-It should be separated in a liability part and an equity part, based on a calculation

Answer 15

It should be separated in a liability part and an equity part, based on a calculation.

Question 16

financial instrument
There are three classes of subsequent measures of financial assets. Which of the
following are included?
Select one or more alternatives:
-Measured at fair value through OCI
-Measured at at value in use through P&L
-Measured at fair value through statement of changes in equity
-Measured at amortised cost

Answer 16

-Measured at fair value through OCI
-Measured at at value in use through P&L
-Measured at amortised cost

Question 17

Financial instruments
What is the effective interest method?
Select one alternative:

-The companies borrowing rate
-The interest rate that equals the discounted future cash receipts to the initial carrying
amount of the asset.
-The government bond rate for the same maturity as the financial instrument, and add to
that a company risk premium.
-The average interest rate on all financial instruments, both assets and liabilities

Answer 17

The interest rate that equals the discounted future cash receipts to the initial carrying amount of the asset.

Question 18

Provisions
How is a provision defined?
Select one alternative:

-A liability with a specified payment date
-A liability with a certain timing and amount
-A liability of uncertain timing and amount
-A liability without any specified repayment date

Answer 18

A liability of uncertain timing and amount

Question 19

Provisions
What should a provision for restructuring costs include?
Select one alternative:

-The direct costs arising from the restructuring
-A separation in impairments and cash flow affecting costs
-The direct costs arising from the restructuring, plus a calculated amount of indirects costs,
but not the cost of capital.
-A separation in cost of material, employee costs and depreciations

Answer 19

The direct costs arising from the restructuring

Question 20

Contingent liabilities
Where is the contingent liability presented in the financial reports?
Select one alternative:

-As a liability in the statement of financial position
-As a provision
-In the notes
-On a separate line between equity and liabilities, labelled hybrid liability

Answer 20

In the notes

Question 21

Revenue
Define a contract liability.
Select one alternative:

-If payments is made by the customer at the time when the delivering company transfers
the goods/services.
-If payments is made by the customer before the delivering company has transferred
goods/services.
-If shipments is made by the delivering company before the customer has signed the
contract.
-If payments is made by the customer after the delivering company has transferred
goods/services.

Answer 21

If payments is made by the customer before the delivering company has transferred
goods/services.

Question 22

Revenue
Which of the following items are included in the five-step model?
Select one or more alternatives:

-Determine the transaction price
-Calculate a possible credit loss in the contract
-Identify a performance obligation
-Allocate the price to performance obligations

Answer 22

-Determine the transaction price
-Identify a performance obligation
-Allocate the price to performance obligations

Question 23

Revenue
If the transaction includes a warranty, how should that be accounted for?
Select one alternative:

-As a simultaneous cost in accordance with IAS 37/Provision
-As a deduction of revenue when the warranty is executed in accordance with IAS37/Provision
-As a simultaneous reduction of revenue in accordance with IAS37/Provision
-As a cost when the warranty is executed in accordance with IAS37/Provision

Answer 23

As a simultaneous cost in accordance with IAS 37/Provision

Question 24

Pensions
Which are the two types of pension plans and who bears the risk?
Select one alternative:

-Defined contribution and the company bears the risk
-Defined benefit and the employee bears the risk
-Defined contribution and the government bears the risk
-Defined benefit and the company bears the risk

Answer 24

Defined benefit and the company bears the risk

Question 25

Pensions
Name two factors that are important in calculating the defined benefit obligation.
Select one alternative:

-Expected return from equity and bonds, expected risk free rate
-Future salary increases, expected return from equity and bonds
-Employee mortality, future salary increases
-Employee mortality, future inflation rate

Answer 25

Employee mortality, future salary increases

Question 26

Share based payments
There are two objectives for IFRS2 Share based payments - which?
Select one alternative:

-To prescribe the accounting when the company issues new shares or issues stock options
-To prescribe the accounting when payments are made, either in the form of shares/options,or cash dependent on the company share price
-To prescribe the accounting for employee stock option plans
-To prescribe the accounting when payments are made, either in the form of shares/options,
or assets other than cash

Answer 26

-To prescribe the accounting when payments are made, either in the form of shares/options,
or cash dependent on the company share price

Question 27

Share based payments
What is the grant date and why is it important for the accounting when equity instruments
are involved?
Select one alternative:

-The date when the fair value of equity instruments are measured and the change in the
value is accounted for as a cost (or reduced cost).
-The date when the fair value of equity instruments are performed, normally once a year.
-The date when the fair value of equity instruments are exchanged into share or other
assets (normally cash)
-The date when the fair value of equity instruments are measured and the value is fixed
from that date

Answer 27

The date when the fair value of equity instruments are measured and the value is fixed
from that date

Question 28

Earnings per share
If the company presents discontinued operations, how does it affect the calculation?
Select one alternative:

-The companny can chose to present EPS either including or excluding discontinued
operations.
-Two EPS must be calculated, including and excluding discontinued operations
-The EPS only includes earnings after discontinued operations
-The EPS excludes discontinued operations

Answer 28

Two EPS must be calculated, including and excluding discontinued operations

Question 29

Earnings per share
What is the number of shares used in the diluted EPS for 20x1? .

A company has 100.000 outstanding shares at the end of year 20x1 and 50.000 potential shares
at the end of year 20x3 via 50.000 share options which can be converted to shares at a share
price of 30 SEK. The average share price on the market in 20x1 for the company is 50 SEK.

Answer 29

50 000 * 30 = 1 500 000

1500000/50 = 30 000

50 000 - 30 000= 20 000

100 000 + 20 000= 120 000

Question 30

Leasing and rents
What is the incremental borrowing rate in a leasing contract?
Select one alternative:

• The short-term government bond rate, plus a risk premium for the company.
• The government bond rate for bonds with the same maturity as the lease-term, plus a
  riskpremium for the company.
• The interest rate the lessee would have to pay to borrow money
  -A benchmark interest rate (like LIBOR or similar) plus a risk premium for the company.

Answer 30

The interest rate the lessee would have to pay to borrow money

Question 31

28. Cash flow calculation
    A company presents the following. Profit before tax 100. Depreciations 40. Ingoing
    balance for inventory 500 and outgoing 600. Ingoing balance for machinery 1000 and
    outgoing 1200. Calculate the effect in the cash flow statement from investments.

Answer 31

The investment is 240 (cash outflow of 240)

Question 32

If a company has 1000 shares at the 1 January 20X1 and issues 500 shares at the 30th of
June and consequently has 1500 share at 31st of December 20X1 - what is the weighted
average number of shares for 20x1?

Answer 32

1250

Question 33

If a company has 1000 shares at the 1 January and the 31st of December 20X0 and issues
500 bonus shares at the 30th of June 20x1 and consequently has 1500 share at 31st of
December 20x1 - what is the weighted average number of shares in the EPS calculation for
20x0 and 20x1?
○ a) 1500 for both years
○ b) 1000 for year 20x0 and 1250 for year 20x1
○ c) 1000 for year 20x0 and 1500 for year 20x1
○ d) 1250 for both years

Answer 33

1500 for both years
bonus issues are usually treated as if they had occurred at the BEGINNING of the PREVIOUS period.

It is necessary in these circumstances to recalculate and restate EPS for
the previous period as well as to calculate EPS for the current period

Question 34

Basis for conclusion
What is “basis for conclusion”?
○ a) It sets out considerations which were taken into account when the standard was
devised
○ b) The minutes from each board meeting leading up to a standard being accepted
○ c) Illustrative examples discussed in meetings with country specific standard setting
bodies
○ d) The introduction to the standard, that sets out the objective and the estimated timeframe for the work.

Answer 34

○ a) It sets out considerations which were taken into account when the standard was
devised

Question 35

Countries
How many countries today are compliant with IFRS?
○ a) 140
○ b) Accepted within the EU, Canada and Australia
○ c) All countries except the US, China and Japan
○ d) 185

Answer 35

○ a) 140

Question 36

Liability
How is a liability defined?
○ a) A present obligation to transfer economic resources
○ b) A future obligation as a result of past events
○ c) An option for the company to transfer economic resources
○ d) A transfer of an economic resource as a result of future events

Answer 36

a) A present obligation to transfer economic resources

Question 37

. Assets
How is an asset defined in the conceptual framework?
○ a) A present economic resource controlled by the entity
○ b) A future economic resource controlled by the entity
○ c) Controlled by the entity as a result of future events
○ d) Has the potential to produce financial benefits

Answer 37

a) A present economic resource controlled by the entity

Question 38

P&L and OCI
What is the difference between the “profit and loss statement” (P&L) and “other
comprehensive income” (OCI)?
○ a) Certain standards require the company to present items in Other Comprehensive
Income and not in the P&L
○ b) OCI includes revaluation of property in line with IAS40 and revaluation of biological
assets in line with IAS41.
○ c) OCI includes all revaluations a company perform over a period
○ d) OCI includes discontinued operations, write downs and gains/losses

Answer 38

a) Certain standards require the company to present items in Other Comprehensive
Income and not in the P&L

Question 39

EPS Calculation
How is basic EPS calculated?
○ a) The profit/loss divided by the average number of shares
○ b) The profit/loss divided by the outgoing number of shares
○ c) The profit/loss less dividends distributed to shareholders, divided by the average
number of shares
○ d) The operating profit divided by the average number of shares

Answer 39

a) The profit/loss divided by the average number of shares

Question 40

Accounting estimates
Changes in accounting estimates can only be accounted for prospectively. What does that
mean?
○ a) It will affect the current and future periods
○ b) It will affect future and past periods
○ c) It will affect future an past periods for the income statement but only future periods
for the balance sheet and cash flow statement.
○ d) The change will affect the changes in equity, not income statement or other part of
the balance sheet than equity.

Answer 40

a) It will affect the current and future periods

Question 41

Definition PPE
How does IAS 16 defines property, plant and equipment? Which one is not correct.
○ a) Held for sale
○ b) Held for more than one period
○ c) Held for rental to others
○ d) Held for use in the production

Answer 41

a) Held for sale

Question 42

Revaluation
If a PPE is revalued according to IAS16 and a year later is sold, how will a revaluation gain
(relating to the previous year) be recognized?
○ a) Directly in retained earnings in equity
○ b) In profit and loss (P/L)
○ c) In Other comprehensive income
○ d) As discontinued operations

Answer 42

a) Directly in retained earnings in equity

Question 43

Intangibles
Explain the term “separable” in relation to intangible assets.
○ a) It can be separated from the entity and sold
○ b) It can be separated in the accounting of expenses
c) The cash flow from the intangible asset can be separated
○ d) It is presented on a separate line in the balance sheet

Answer 43

a) It can be separated from the entity and sold

Question 44

Key-ratio 8
This assignment is NOT related to the uploaded PDF.
Which of the following key-ratios does not include the balance sheet?
○ a) EBITDA-margin
○ b) Capital turnover
○ c) Return on capital employed
○ d) The debt to equity ratio

Answer 44

a) EBITDA-margin

Question 45

f revenue is 100, total operating costs are 85, salaries to employees are 30, depreciations
on PPE 10, interest costs 5, tax expenses 4, interest bearing debt 50 and equity 50.
What is the EBITDA-margin?
○ a) 25%
○ b) 20%
○ c) 10%
d) 11%

Answer 45

ebitda margin = ebitda/revenue
operating income= revenue - operating cost
100-85=15
ebitda= operating income + depreciation expense
15+10=25
ebitda margin= 25/100=25%

Question 46

Key-ratios 10
This assignment is NOT related to the uploaded PDF.
If revenue is 100, total operating costs are 75, production costs are 35, depreciations 10,
interest costs 5, tax expenses 4, interest bearing debt 50 and equity 50.
What is the return on equity (on the outgoing balance)?
○ a) 32%
○ b) 22%
○ c) 1,0x
○ d) 12%

Answer 46

net income =
100-75-5-4=16
ROE= 16/50 = 0,32 =32%

note it is assumed that the production costs and depreciation are already included in the total operating costs both being operating expenses.

Interest is a non-operating expense hence it is considered separately.

Question 47

What is the structure of an IFRS Standard (which of the following are included)?
a)
Definitions, effective date, enforcement, general acceptance
b)
Introduction, conceptual framework, time-frame, effective date
c)
Objectives, definitions, body of the standard, transitional provisions
d)
Enforcement, framework, body of the standard, approval by the IASB

Answer 47

c)
Objectives, definitions, body of the standard, transitional provisions

Question 48

Which are the three bodies included in the IFRS Foundation?
a)
IASB, ESG Committee, GAAP Interpretations committee
b)
Advisory council, EU GAAP, Capital Markets Advisory Committee
c)
Advisory council, IASB, IFRS Interpretations committee
d)
Advisory board, Accounting board, Interpretations Board

Answer 48

c)
Advisory council, IASB, IFRS Interpretations committee

Question 49

Which are the three main sources of regulation?
a)
Accounting standards, industry regulation, tax regulation
b)
Accounting legislation, tax regulation, stock exchange standards
c)
Accounting standards, stock exchange regulation, industry regulation
d)
Legislation, accounting standards, stock exchange regulation

Answer 49

d)
Legislation, accounting standards, stock exchange regulation

Question 50

Which are the four enhancing qualitative characteristics? Which of the following is not one of them.
a)
Neutrality
b)
Comparability
c)
Timeliness
d)
Verifiability

Answer 50

a)
Neutrality

Question 51

How is equity defined?
a)
The number of shares multiplied by the nominal price of the share
b)
The residual interest in equity after deducting non-controlling interest
c)
The residual interest in the assets of the entity after deducting all liabilities
d)
Paid-in equity capital and retained earnings

Answer 51

c)
The residual interest in the assets of the entity after deducting all liabilities

Question 52

How is a liability defined?
a)
A future obligation as a result of past events
b)
An option for the company to transfer economic resources
c)
A transfer of an economic resource as a result of future events
d)
A present obligation to transfer economic resources

Answer 52

d)
A present obligation to transfer economic resources

Question 53

What other users, than the primary users, rely in financial information and the IFRS? Which group is NOT included?
a)
Governments
b)
Customers
c)
Employees
d)
Management

Answer 53

d)
Management

Question 54

Explain “relevance”
a)
It has explicit forecasts included
b)
Also immaterial information can be relevant if it shows up frequently
c)
The financial information has predictive and confirmative value
d)
Items that are equal to one percent of ingoing equity is considered relevant

Answer 54

c)
The financial information has predictive and confirmative value

Question 55

There are three ways to measure current value. Which of the following is not included?
a)
The amount that would have to be paid to acquire an equivalent asset…
b)
The price to be received to sell an asset… between market participants..
c)
The present value of the net cash flows that the entity expects from the use…
d)
The amount paid to acquire an asset

Answer 55

d)
The amount paid to acquire an asset

Question 56

Which of the following is NOT included in the objective for the IASB Conceptual framework?
a)
Without a conceptual framework accounting standards are more difficult to develop
b)
Objective, elements, recognised, presented
c)
The first accounting standard issued, IFRS1, relates to the conceptual framework
d)
A set of fundamental principles which underpin financial accounting

Answer 56

c)
The first accounting standard issued, IFRS1, relates to the conceptual framework

Question 57

Which are the important users of financial information according to the framework? Which of the following are NOT included?
a)
Creditors
b)
Lenders
c)
General public
d)
Investors

Answer 57

c)
General public

Question 58

What is a perfectly “faithful representation”?
a)
Specific, biased, subjective
b)
certainty, unbiased, complete
c)
Complete, neutral, free from error
d)
All-inclusive, prudent, objective

Answer 58

c)
Complete, neutral, free from error

Question 59

Give an example of criteria that satisfies the classification as a current asset. Which one is NOT correct.
a)
The purpose is to be traded
b)
It is intended for sale within the operating cycle
c)
It is intended to be realised within the operating cycle
d)
It is expected to be revalued at fair value

Answer 59

d)
It is expected to be revalued at fair value

Question 60

If an interim report only presents the statements of comprehensive income and earnings per share it does not comply with IAS 34. What is missing?
a)
Balance sheet, cash flow statement, changes in equity
b)
Management commentary, financial key-ratios
c)
Balance sheet, cash flow statement, management commentary
d)
Balance sheet, notes, key-ratios, sustainability commentary

Answer 60

a)
Balance sheet, cash flow statement, changes in equity

Question 61

How is “material” information defined in IAS 1? Which of the following is NOT correct
a)
If mis-stating the information could influence decisions users make on the basis of those financial statements
b)
If obscuring the information could influence decisions users make on the basis of those financial statements
c)
If omitting the information could influence decisions users make on the basis of those financial statements
d)
If presenting the information could influence decisions users make on the basis of those financial statements

Answer 61

d)
If presenting the information could influence decisions users make on the basis of those financial statements

Question 62

What is the difference between the “profit and loss statement” (P&L) and “other comprehensive income” (OCI)?
a)
OCI includes discontinued operations, write downs and gains/losses
b)
Certain standards require the company to present items in Other Comprehensive Income and not in the P&L
c)
OCI includes revaluation of property in line with IAS40 and revaluation of biological assets in line with IAS41.
d)
OCI includes all revaluations a company perform over a period

Answer 62

b)
Certain standards require the company to present items in Other Comprehensive Income and not in the P&L

Question 63

What is the definition of a non-current asset?
a)
If it is not current, it is non-current
b)
It is depreciated or amortized on
c)
It is non-financial
d)
It is held in the balance sheet for a longer period than twelve months

Answer 63

a)
If it is not current, it is non-current

Question 64

What is the objective for the financial statements presented in IAS1?
a)
To provide information about the financial position
b)
To provide information that is useful to a wide range of users in nmakinng economic decisions
c)
To provide information about the financial performance
d)
To provide information about cash flows

Answer 64

b)
To provide information that is useful to a wide range of users in nmakinng economic decisions

Question 65

What does a complete set of financial statements comprise?
a)
Corporate governance report, sustainability report, notes, management comment
b)
Profit/Loss, Other comprehensive income, cash flow, financial key-ratios
c)
Financial position, other comprehensive income, changes in equity, notes
d)
Notes, comparative information, corporate governance report, financial key-ratios

Answer 65

c)
Financial position, other comprehensive income, changes in equity, notes

Question 66

Which main items are presented in the statement of comprehensive income? Which of the following are NOT included
a)
Discontinued operations
b)
Profit/loss from the equity method
c)
Extraordinary items
d)
Revenue

Answer 66

c)
Extraordinary items

Question 67

Describe the format for the balance sheet that IAS 1 prescribes.
a)
Debit: Long-term and short term assets, Credit: Long-term and short-term liabilities, Credit: Equity
b)
Debit: Operating and financial assets, Credit: Operating and financial liabilities, Credit: Equity
c)
Debit: Current and non-current assets, Credit: current and non-current liabilities, Credit: Equity
d)
It does not specify any particular format

Answer 67

d)
It does not specify any particular format

Question 68

What accounting standard does include a “management commentary”?
a)
The conceptual framework
b)
None, it is voluntary
c)
IAS 1
d)
None, it is in an IFRS Practice statement

Answer 68

d)
None, it is in an IFRS Practice statement

Question 69

How will the accounting be affected if the company needs to apply a change in accounting policy retrospectively?
a)
The present and the previous year will be changed
b)
The present year will change and an adjustment of equity will take place to handle the residual that arises from the policy change
c)
The present year will change. No other effects on the accounts or the notes.
d)
The present year will be changed and information relating to the previous year will be included in a foot note

Answer 69

a)
The present and the previous year will be changed

Question 70

There are three accounting standards that permits no choice for accounting policy treatments in the standard. Which of the following is not included.
a)
Intangible assets
b)
Inventory
c)
Provisions, contingent liabilities, contingent assets
d)
Property, plant, equipment

Answer 70

d)
Property, plant, equipment

Question 71

Which are the situations where a company can chose to change an accounting policy?
a)
If the tax authority issues new standards
b)
If other legislation (than IFRS) changes and affects the accounting
c)
A new standard is issued or an IFRIC Interpretation
d)
If the management belives the previous accounting was not beneficiary for the company shareholders

Answer 71

c)
A new standard is issued or an IFRIC Interpretation

Question 72

If a company voluntarily change an accounting policy, what information must the company present?
a)
The reason why the new policy will provide more reliable and reliant information.
b)
They are not allowed to
c)
Recalculation of the previous year in both the income statement and balance sheet
d)
Recalculation of the previous year in a note

Answer 72

a)
The reason why the new policy will provide more reliable and reliant information.

Question 73

Repair, maintenance, replacement of major parts and major inspections - which could be treated as a capital expenditure?
a)
Major replacements
b)
All of the suggested can be treated as an asset, as long as it is a substantial amount
c)
Major repairs
d)
Major maintenance

Answer 73

a)
Major replacements

Question 74

Describe the cost model for PPE.
a)
The initial recognized cost, less depreciations and impairments, plus dismantling costs at the end
b)
The current cost, less depreciations and impairments.
c)
The initial recognized cost, less depreciations and impairments. Dismantling costs must not be included.
d)
To fair value, with periodical adjustment of the value

Answer 74

a)
The initial recognized cost, less depreciations and impairments, plus dismantling costs at the end

Question 75

What is a carrying amount?
a)
The current cost for the asset
b)
The market value of the asset
c)
The historical cost for the asset
d)
The amount that is shown in the financial statements

Answer 75

d)
The amount that is shown in the financial statements

Question 76

IFRS 13 defines three levels of inputs in its fair value hierarchy. Describe a valuation using “Level 3 inputs”.
a)
To current cost using a calculation built on indexation
b)
Using unobservable inputs, meaning inputs for which market data is not available, for example estimates of future cash flows.
c)
To market value using quoted prices on an active market
d)
To historical cost less depreciations

Answer 76

b)
Using unobservable inputs, meaning inputs for which market data is not available, for example estimates of future cash flows.

Question 77

If the revalued PPE a year later is sold, how will a revaluation gain (relating to the previous year) be recognized?
a)
As discontinued operations
b)
Directly in retained earnings in equity
c)
In Other comprehensive income
d)
In profit and loss (P/L)

Answer 77

b)
Directly in retained earnings in equity

Question 78

How is a gain or loss on a fair value revaluation of investment property presented in the financial reports?
a)
On a separate line in the statement of changes in equity
b)
On a separate line in the P/L
c)
On a separate line in Other comprehensive income
d)
Included in revenue

Answer 78

b)
On a separate line in the P/L

Question 79

Define depreciations
a)
A systematic allocation aiming at presenting a prudent value of the assets
b)
A systematic allocation aiming at keeping finds in the company, to be able to replace the assets
c)
A systematic allocation aiming at allocating expenses
d)
A systematic allocation aiming at presenting the replacement costs of the assets

Answer 79

c)
A systematic allocation aiming at allocating expenses

Question 80

How should the initial recognition be measured?
a)
To the purchase price, less discounts and rebates
b)
To replacement cost, less discounts and rebates
c)
To the fair value, less discounts and rebates
d)
To the lower of cost or market value

Answer 80

a)
To the purchase price, less discounts and rebates

Question 81

Define level 2 inputs.
a)
Current costs calculated using an index, less depreciations
b)
Quoted prices for a similar asset in an active market
c)
A calculated value using for example discounted future cash flows
d)
Historical costs, less depreciations

Answer 81

b)
Quoted prices for a similar asset in an active market

Question 82

If the depreciation method is changed, how will this be dealt with according to IAS?
a)
It is a change in accounting estimate and will be changed retrospectively.
b)
It is a change in accounting policy and will be changed prospectively.
c)
It is a change in accounting estimate and will be changed prospectively.
d)
It is a change in accounting policy and will be changed retrospectively

Answer 82

c)
It is a change in accounting estimate and will be changed prospectively.

Question 83

f it is probable that future economic benefits from an asset will flow to the company, what other requirement must be fulfilled to be able to recognize PPE?
a)
There is physical proof the asset exists
b)
The cost can be measured reliably
c)
The historical cost can be measured reliably
d)
The current cost can be measured reliably

Answer 83

b)
The cost can be measured reliably

Question 84

If a PPE is revalued and the value increases, how will the gain be recognized? Which of the following is correct?
a)
An increase is presented in Other comprehensive income
b)
A decrease is presented in Other Comprehensive income
c)
An increase is presented in Profit/loss
d)
An increase is presented directly in equity, without having to pass through Comprehensive Income.

Answer 84

a)
An increase is presented in Other comprehensive income

Question 85

Which are the two criteria which must be fulfilled to be able to recognize an (intangible) asset?
a)
It must be a future economic benefit and the company must have control
b)
It must be a measurable economic benefit and the asse must be able to separate as an accounting unit.
c)
It must be a historical economic benefit and the asset must be able to use
d)
It must be physical and monetary

Answer 85

a)
It must be a future economic benefit and the company must have control

Question 86

Why is internally generated goodwill not accepted as an asset?
a)
It is generally related to customers and they cannot be separated from the company without negative consequenses
b)
It is impossible to determine the cost
c)
It is not separable
d)
It consist mainly of long-term research expenses

Answer 86

b)
It is impossible to determine the cost

Question 87

Explain the term “separable” in relation to intangible assets.
a)
The cash flow from the intangible asset can be separated
b)
It can be separated from the entity and sold
c)
It is presented on a separate line in the balance sheet.
d)
It can be separated in the accounting of expenses

Answer 87

b)
It can be separated from the entity and sold

Question 88

Which of the following is an expenditure that can be included in intangibles.
a)
Training
b)
Design of tools involving new technology
c)
Start-up costs
d)
Advertising

Answer 88

b)
Design of tools involving new technology

Question 89

Which of the following is NOT activities that arises in the development phase?
a)
Design and construction of a pilot plant
b)
Research of new deceases
c)
Testing of new materials
d)
Design and construction of a prototype

Answer 89

b)
Research of new deceases

Question 90

How is IAS36 applied on intangible assets with indefinite useful lives?
a)
Should be revalued, up or down
b)
Should be amortized
c)
Should be reviewed for impairment
d)
If consolidated goodwill - be amortized over 20 years

Answer 90

c)
Should be reviewed for impairment

Question 91

How is goodwill in a business combination (IFRS3) calculated?
a)
The price paid for the business, less the value of identifiable assets
b)
The price paid for the business, less the net asset value of identifiable assets/liabilities
c)
The price paid for the business, less the net asset value of identifiable assets/liabilities, less internally generated goodwill
d)
The price paid for the business, less the value of the shares in the subsidiary

Answer 91

b)
The price paid for the business, less the net asset value of identifiable assets/liabilities

Question 92

Why is it difficult to recognize internally generated intangible assets?
a)
It is difficult to isolate future cash flow from the asset
b)
It is problematic to establish if it will generate future economic benefits
c)
It is difficult to value the asset
d)
It is difficult to calculate the expected life of the asset

Answer 92

b)
It is problematic to establish if it will generate future economic benefits

Question 93

For which assets must the recoverable amount be determined every year?
a)
Inventory
b)
Customer receivables
c)
Goodwill
d)
Property

Answer 93

c)
Goodwill

Question 94

There are several examples of indication of an impairment that arises from an external source of information. Which of the following is NOT one of them?
a)
A decline in the share price of the company
b)
Significant changes have occurred in the market, to which the asset is dedicated
c)
Observable indications on a decline in asset value
d)
Increase in the discount rate used in calculating the value in use

Answer 94

a)
A decline in the share price of the company

Question 95

Can an asset be impaired if there is evidence that the economic performance of an asset will be worse than expected?
a)
Yes, but only together with changes in observable data from the market
b)
Yes, but only together with changes in the business cycle
c)
Yes, but only together with a substantial decline in profitability
d)
Yes

Answer 95

d)
Yes

Question 96

How is value in use calculated?
a)
The sum of the discounted future cash flows from an asset
b)
The replacement cost for an asset
c)
The historical cost increased by a relevant index
d)
The observable market value of an asset

Answer 96

a)
The sum of the discounted future cash flows from an asset

Question 97

How is “highly probable” defined, regarding to when the sale has to be completed? Which of the factors are NOT included in the standard?
a)
A completed sale is expected within a year
b)
The asset is actively marketed at a reasonable sale price
c)
The assets to be sold are equal to at least a segment in the company
d)
Management is committed to a plan to sell the asset

Answer 97

c)
The assets to be sold are equal to at least a segment in the company

Question 98

How is an asset “held for sale” defined?
a)
Inventory is an example of an asset “held for sale”.
b)
If the asset will be sold using an organized market
c)
If the value will be realised through a sale rather than through continuing use
d)
If the asset will be traded regularly

Answer 98

c)
If the value will be realised through a sale rather than through continuing use

Question 99

What is a disposal group?
a)
Any tangible or intangible non-current asset
b)
A subsidiary
c)
A segment
d)
A CGU

Answer 99

d)
A CGU

Question 100

How is assets held for sale measured?
a)
To fair value
b)
The lower of the carrying amount and fair value
c)
To value in use
d)
To the historical cost, less likely impairments

Answer 100

b)
The lower of the carrying amount and fair value

Question 101

How is discontinued operations presented in the statement of comprehensive income?
a)
On a separate line after tax, including any gain/loss
b)
In other comprehensive income, including any gain/loss
c)
On a separate line before tax, including any gain/loss before tax
d)
On a separate line in operating earnings, including any gain/loss

Answer 101

a)
On a separate line after tax, including any gain/loss

Question 102

How is assets and liabilities held for sale presented in the statement of financial position?
a)
Separately from other assets, but included in similar sub-groups as other assets (for example “inventory” and “inventory in group held for sale”)
b)
Included in other assets, until the sale is completed
c)
Separately from other assets in the balance sheet, on one line
d)
As a separate column in the balance sheet

Answer 102

c)
Separately from other assets in the balance sheet, on one line

Question 103

What is, in general, discontinued operations? Give an example.
a)
Property that will be disposed of
b)
A line of business that will be closed down
c)
A segment, at a minimum
d)
A separate line of business

Answer 103

d)
A separate line of business

Question 104

Throughout the period of use, the customer in a lease transaction must have two requirements fulfilled - describe one of them?
a)
It must be a registered contract between the owner and the user
b)
The owner has the right to direct the use of the asset
c)
The user can not have a bargain purchase option after the lease period has expired
d)
The user must have the right to obtain almost all the economic benefits from the use

Answer 104

d)
The user must have the right to obtain almost all the economic benefits from the use

Question 105

How is the lease-term defined?
a)
As a period covered by an option to extend the lease
b)
As for the life of the underlying asset
c)
As a period covered by an option to terminate the lease
d)
As the non-cancellable period of the lease

Answer 105

d)
As the non-cancellable period of the lease

Question 106

How is a lease defined in IFRS16?
a)
A transaction between an owner of an asset and a user of the same asset in exchange for money
b)
Leases are non-current assets that are used a party that is not the owner, but controls them over the leasing period.
c)
A contract that gives the holder the right to use an asset for a period of time and pays for it
d)
Leases are long-term rents paid for cars, trucks, land, property and similar, and used by a party that do not own them.

Answer 106

c)
A contract that gives the holder the right to use an asset for a period of time and pays for it

Question 107

When can a user chose not to apply a lease accounting treatment?
a)
On intangible assets
b)
When the value of the underlying asset is highly uncertain
c)
If the value of the asset is below 100.000 US dollars
d)
Short-term leases

Answer 107

d)
Short-term leases

Question 108

How is the right of use asset initially measured?
a)
At replacement cost for the underlying value
b)
At fair value for the underlying asset
c)
At current value for the underlying asset
d)
At cost (present value of the sum of future rents)

Answer 108

d)
At cost (present value of the sum of future rents)

Question 109

How is the reduction of the liability to the lessor calculated?
a)
It is lowered by the lease payment, less the interest rate on government bonds with the same maturity as the contract.
b)
It is lowered by the lease payment
c)
It is lowered using the same amount as the depreciation on the asset
d)
It is lowered with the lease payment, less calculated interest costs presented in the income statement.

Answer 109

d)
It is lowered with the lease payment, less calculated interest costs presented in the income statement.

Question 110

What is the incremental borrowing rate?
a)
A benchmark interest rate (like LIBOR or similar) plus a risk premium for the company.
b)
The government bond rate for bonds with the same maturity as the lease-term, plus a riskpremium for the company.
c)
The interest rate the lessee would have to pay to borrow money
d)
The short-term government bond rate, plus a risk premium for the company.

Answer 110

c)
The interest rate the lessee would have to pay to borrow money

Question 111

How is the right of use asset measured subsequently?
a)
Cost less depreciations and impairments
b)
At cost (discounted future rents), but revalued using the present incremental borrowing rate
c)
At fair value
d)
Current cost, less depreciations and impairments

Answer 111

a)
Cost less depreciations and impairments

Question 112

How must the initial measurement of financial instruments be performed?
a)
At fair value
b)
At historical costs
c)
At current costs
d)
At the value in use

Answer 112

a)
At fair value

Question 113

What is the effective interest method?
a)
The government bond rate for the same maturity as the financial instrument, and add to that a company risk premium.
b)
The average interest rate on all financial instruments, both assets and liabilities.
c)
The companies borrowing rate
d)
The interest rate that equals the discounted future cash receipts to the initial carrying amount of the asset.

Answer 113

d)
The interest rate that equals the discounted future cash receipts to the initial carrying amount of the asset.

Question 114

Define a financial liability.
a)
A contractual obligation to deliver cash
b)
A contractual obligation to deliver resources to another party
c)
A most likely payment to another party
d)
A future sacrifice payable in cash or other assets

Answer 114

a)
A contractual obligation to deliver cash

Question 115

When is a financial instrument an equity instrument according to IAS32? Which of the following is correct?
a)
An equity instrument includes no obligation to deliver cash or financial assets.
b)
An equity instrument includes an obligation to deliver cash or financial assets.
c)
An equity instrument includes an obligation to deliver dividends.
d)
An equity instrument has no maturity, it is eternal.

Answer 115

a)
An equity instrument includes no obligation to deliver cash or financial assets.

Question 116

Define a financial asset. Which is NOT included.
a)
A right to receive cash
b)
Monetary assets
c)
Cash
d)
Equity instruments

Answer 116

b)
Monetary assets

Question 117

There are three classes of subsequent measures of financial assets. Which of the following is NOT one of them?
a)
At fair value through OCI
b)
At amortised cost
c)
At fair value through P&L
d)
At value in use through statement of changes in equity

Answer 117

d)
At value in use through statement of changes in equity

Question 118

Define an equity instrument.
a)
A residual interest in assets minus liabilities
b)
Assets less liabilities
c)
The number of shares multiplied by the price paid for the shares
d)
The number of shares multiplied by the face value

Answer 118

a)
A residual interest in assets minus liabilities

Question 119

How is the liability part in a compound financial instrument calculated (for example a loan that is convertible to ordinary shares)?
a)
It should be presented as equity, since the holder can convert to ordinary share.
b)
It should be presented as a liability until the conversion date, when it becomes equity.
c)
It should be presented on a separate line, between liabilities and equity as hybrid capital.
d)
It should be separated in a liability part and an equity part, based on a calculation.

Answer 119

d)
It should be separated in a liability part and an equity part, based on a calculation.

Question 120

There are three classes of risk in IFRS7 that should be considered in the footnotes. Which of the following is NOT one of them?
a)
The risk that the fair value will fluctuate because of changes in market prices
b)
The risk holders of quoted financial instruments will sell at the same time and depress the value of the instrument.
c)
The risk that one party to a financial instrument will cause a loss by failing to honour the obligation
d)
The risk an entity will have difficulties meeting obligations related to financial liabilities

Answer 120

b)
The risk holders of quoted financial instruments will sell at the same time and depress the value of the instrument.

Question 121

How must redeemable preference shares be presented and why?
a)
Equity, since it does not require any collateral.
b)
Equity, since it is shares
c)
Liabilities, because the shareholders has the right to require repayment.
d)
Liabilities, because the dividend is a fixed amount.

Answer 121

c)
Liabilities, because the shareholders has the right to require repayment.

Question 122

How can a contingent liability be defined?
a)
A possible obligation, confirmed by uncertain future events not within control of the company
b)
A certain obligation, confirmed by certain future events within control of the company
c)
A possible obligation, confirmed by uncertain past events not outside control of the company
d)
A possible obligation, confirmed by certain future events within control of the company

Answer 122

a)
A possible obligation, confirmed by uncertain future events not within control of the company

Question 123

What is an obligating event and why is it important in calculating a provision?
a)
When It can be no realistic alternative to settle, and without the event there cannot be a provision
b)
If the other do not accept they have a corresponding receivable, and without the event there cannot be a provision
c)
When the other party accept that they have a corresponding receivable and without the event there cannot be a provision
d)
The date when a loan is signed or bonds have been issued, and without the event there cannot be a provision

Answer 123

a)
When It can be no realistic alternative to settle, and without the event there cannot be a provision

Question 124

How will the accounting be affected if it is no longer probable that an outflow of economic benefits will be required to settle the obligation?
a)
It should be reversed and presented as a financial income
b)
It can be used for other purposes than for which it was originally established
c)
It should be reversed and presented in Other Comprehensive Income
d)
It should be reversed

Answer 124

d)
It should be reversed

Question 125

How will the calculation of the provision be affected, if it is long-term?
a)
It must be discounted with the government bond yield for the same time-frame
b)
It will not be affected
c)
The nominal sum of future expenditure must be summarised.
d)
It should be calculated as the present value of the expenditure

Answer 125

d)
It should be calculated as the present value of the expenditure

Question 126

What is an onerous contract?
a)
A very profitable contract.
b)
A contract in which the cost of meeting the obligation is above the benefits.
c)
A contract in which the profitability is below the required rate of return on capital employed of the company.
d)
A contract in which the benefit of meeting the obligation is above the costs.

Answer 126

b)
A contract in which the cost of meeting the obligation is above the benefits.

Question 127

Is a building contract a performance obligation that is satisfied over time or at a point in time?
a)
If the builder has control over the asset, the revenue at the builder will be recognized over time (when advances from customers are received).
b)
If the builder has control over the asset, the revenue at the builder will be recognized over time (for example using the percentage of completion method)
c)
If the customer has control over the asset, the revenue at the builder will be recognized over time (for example using the percentage of completion method).
d)
If the customer has control over the asset, the revenue at the builder will be recognized at a point i time (when the building is completed).

Answer 127

c)
If the customer has control over the asset, the revenue at the builder will be recognized over time (for example using the percentage of completion method).

Question 128

Why is it important to identify the performance obligation?
a)
It is important, because the revenue arising from each obligation is calculated separately
b)
It is important, because the revenue arising from a group of obligation is calculated separated in groups of similar customers
c)
It is important, because the revenue arising from each obligation is calculated as a group
d)
It is important, because the revenue arising from a group of obligation is calculated as a group

Answer 128

a)
It is important, because the revenue arising from each obligation is calculated separately

Question 129

If the consideration for a contract may vary because of refunds or performance bonuses, how should the revenue be measured?
a)
It must be estimated (and included in cost of sales) when revenue is recognized.
b)
It must be estimated and amortized over the time for the customer receivable.
c)
It must be estimated (and ducted from the revenue) when revenue is recognized
d)
It must reduce the revenue when it is paid

Answer 129

c)
It must be estimated (and ducted from the revenue) when revenue is recognized

Question 130

How should the revenue be calculated if the customer is granted the right to return the products?
a)
The company should recognise the total amount and de-recognise the amount which it expects in return when the return is completed.
b)
The company should recognise the total amount and recognise the amount which it receives in return as cost of sales.
c)
The company should estimate the expected return and only recognise the amount which it expects.
d)
The company should estimate the expected return and recognise the amount as cost of sales.

Answer 130

c)
The company should estimate the expected return and only recognise the amount which it expects.

Question 131

What is a stand-alone selling price and how does it affect the accounting?
a)
If the performance obligations (like product, services) in a contract were to be sold separately, the revenue must be allocated to each performance obligation.
b)
If the performance obligations (like product, services) is sold in combination, the combined revenue must be presented.
c)
If the performance obligations (like product, services) is sold in combination, the revenue must be presented when the shortest serving component is recognised (normally products).
d)
If the performance obligations (like product, services) is sold in combination, the revenue must be amortized over to the longest serving component (normally services).

Answer 131

a)
If the performance obligations (like product, services) in a contract were to be sold separately, the revenue must be allocated to each performance obligation.

Question 132

When identifying the revenue contract, what does the standard say about the payment?
a)
It is of minor importance if the company will collect the cash in the future
b)
It is highly certain the company will collect the cash
c)
It is probable the company will collect the cash
d)
If it is probable the company will collect the cash, the amount must be discounted

Answer 132

c)
It is probable the company will collect the cash

Question 133

Which of the following items are NOT included in the five-step model?
a)
Determine the transaction price
b)
Identify a performance obligation
c)
Allocate the price to performance obligations
d)
Calculate a possible credit loss in the contract

Answer 133

d)
Calculate a possible credit loss in the contract

Question 134

What is a contract asset? What is the difference to a receivable?
a)
The asset presented at the delivering company when the customer has paid advances to the delivering company
b)
Goods/services have been delivered to the customer, but not yet invoiced (and becoming a customer receivable).
c)
The delivering company has paid advances to the customer
d)
Goods/services have been ordered by the customer, but not yet delivered (and becoming a customer receivable).

Answer 134

b)
Goods/services have been delivered to the customer, but not yet invoiced (and becoming a customer receivable).

Question 135

What is a defined benefit obligation and how is it accounted for?
a)
Estimates must be made of the of the assets (normally share and bonds) that re necessary to cover the obligation to the employee.
b)
Estimates must be made of the benefits which employees have earned during the current period that will be paid out to the employee at the end of the year (obligation).
c)
Estimates must be made of the costs which employees have earned during the current period (obligation).
d)
Estimates must be made of the accumulated benefits which employees have earned (obligation) and the extra amount they have earned during the current period.

Answer 135

d)
Estimates must be made of the accumulated benefits which employees have earned (obligation) and the extra amount they have earned during the current period.

Question 136

In what way will the current market interest rate level impact the calculation of the pension obligation?
a)
It will affect the market prices of shares and bonds that the company use to protect the liability.
b)
The estimates of future obligations are discounted using the market interest rate.
c)
There must be an interest cost for the obligation accounted for in the financial net
d)
The difference between the ingoing liability and the outgoing, should equal the market interest rate for the period.

Answer 136

b)
The estimates of future obligations are discounted using the market interest rate.

Question 137

What is a vesting condition and how does it affect the accounting?
a)
The conditions the employee must satisfy to receive the equity instruments.
b)
The period during which the employee can exchenge the stock options into shares.
c)
The number of years the employee have ot work in the company to receive the stock options.
d)
The amount the employee must invest to receive the equity instruments.

Answer 137

a)
The conditions the employee must satisfy to receive the equity instruments.

Question 138

The total cost for pensions during the period consists of two items (unless the employees have contributed) - which?
a)
The nominal value of current services cost for the period and the interest cost
b)
The present value of current services cost for the period and the interest cost
c)
The change in the pension obligation less the change in the pension assets.
d)
The pension cost for the period and the change in the obligation

Answer 138

b)
The present value of current services cost for the period and the interest cost

Question 139

How is the accounting affected if the share-based payments are settled in cash?
a)
The company should measure this liability at fair value, both at the grant date and at each reporting period.
b)
The company should measure this liability at fair value at the grant date and keep that value each reporting period.
c)
The company should measure this liability at cost and when the liability is settled in cash include a loss inn the profit/loss account.
d)
The company should measure this liability at fair value, both at the grant date and at each reporting period. The revaluation must be presented in Other comprehensive income.

Answer 139

a)
The company should measure this liability at fair value, both at the grant date and at each reporting period.

Question 140

Which of the plans will create both a liability in the balance sheet and a cost in the income statement in the company?
a)
Defined benefit plans, where the company bears the risk, will create both
b)
Defined benefit plans, where the employee bears the risk, will create both
c)
Defined contribution, where the employee bears the risk, will create both
d)
Defined contribution, where the company bears the risk, will create both

Answer 140

a)
Defined benefit plans, where the company bears the risk, will create both

Question 141

A company presents the following. Profit before tax 100. Depreciations 40. Ingoing balance for inventory 500 and outgoing 600. Ingoing balance for machinery 1000 and outgoing 1200. Calculate the investments.
a)
60 (cash outflow of 60)
b)
200 (cash outflow of 200)
c)
40 (cash outflow of 40)
d)
240 (cash outflow of 240)

Answer 141

600-500=100
1200-1000= 200

The change in machinery is not part of the working capital, so we only consider the change in inventory : 100+40+100 = 240

Question 142

What is the starting point for the indirect method?
a)
The operating profit, before interest and tax
b)
The change in cash for the period
c)
The profit and loss for the period, before tax
d)
The EBITDA (profit before depreciation/amortization, interest and tax)

Answer 142

c)
The profit and loss for the period, before tax

Question 143

A company presents the following. Profit before tax 100. Depreciations 40. Ingoing balance for inventory 500 and outgoing 580. Ingoing balance for machinery 1000 and outgoing 1200. Calculate operating cash flow.
a)
60
b)
-140
c)
140
d)
-180

Answer 143

Operating cash flow= profit before tax + depreciation - change in working capital
The change in machinery is not part of the working capital, so we only consider the change in inventory
580-500= 80
100+40-80= 60

Question 144

There are five adjustments when calculating cash flow from operations. Which of the following examples is not one of them?
a)
Decrease in the allowance for doubtful receivables
b)
Depreciations
c)
Increase/decrease in inventory
d)
Interest income/expense

Answer 144

d)
Interest income/expense

Question 145

Which are the two methods used for reporting the cash flow statement?
a)
Direct, indirect
b)
Excluding dividends/interest, including dividends/interest
c)
All-inclusive, all-exclusive
d)
Operating, financing

Answer 145

a)
Direct, indirect

Question 146

It is three activities described in a cash flow statement - which of the following is not included?
a)
Change in cash
b)
Investing
c)
Financing
d)
Operating

Answer 146

a)
Change in cash

Question 147

How is the EPS calculation affected by non-controlling interests?
a)
Non-controlling interest is an adjustment only in profit/loss
b)
Non-controlling interest is not deducted from profit/loss
c)
Non-controlling interest is deducted from profit/loss
d)
Non-controlling interest is adjusted for dividends to the minority shareholders and then deducted from profit/loss

Answer 147

c)
Non-controlling interest is deducted from profit/loss

Question 148

How is basic EPS calculated?
a)
The profit/loss divided by the average number of shares
b)
The operating profit divided by the average number of shares
c)
The profit/loss less dividends distributed to shareholders, divided by the average number of shares
d)
The profit/loss divided by the outgoing number of shares

Answer 148

a)
The profit/loss divided by the average number of shares