Topic 1 - Definitions

Question 1

The IASBs / AASBs conceptual framework provides information regarding what?

1. ?
2. ?
3. ?

Answer 1

Question 2

Why is the Conceptual Framework useful?

The development of accounting regulations which are internally consistent requires an agreement on:

1. ?
2. ?
3. ?

Answer 2

Question 3

What is the definition of Assets?

Answer 3

Question 4

An item that meets the definition of an element should be recognised as an asset if:

a) ?
b) ?

Answer 4

Question 5

What is the 2-step process when accounting for an asset?

Answer 5

Question 6

What is the definition of Liabilities?

Answer 6

Question 7

What is the definition of Expenses?

Answer 7

Question 8

What is the definition of Income?

Answer 8

Question 9

What is the definition of Equity?

Answer 9

Question 10

Does an item meet the definition of an asset?

1.

2.

3.

Answer 10

1. Is there a future economic benefit?

(does it create a future economic benefit?)

2. Does the entity have control over that future economic benefit?

3. Is there a past event that resulted in the entity having control over the future economic benefit?

Question 11

Does an item meet the recognition criteria of an asset?

(to be recognised on the balance sheet of the entity)

1.

2.

Answer 11

1. Is it probable/likely that there are future economic benefits that will flow to the entity?

2. Can we determine the cost or value of that asset reliably?