Exam (elaborations)
Advanced Accounting of TEST BANK Exam 2024/2025 Questions With Completed & Verified Solutions.
- Course
- Institution
Advanced Accounting of TEST BANK Exam 2024/2025 Questions With Completed & Verified Solutions.
[Show more]
Content preview
Advanced AccountingRevenue recognition, which one is true?
1. Revenue generated by lease agreements is treated by IAS 18
2. Revenue is measured at the nominal amount of the invoice
3. Margin on long term contract is usually recognised based on the percentage of completion
method
4. All the above propositions are incorrect - ANS 3. Margin on long term contract is usually
recognised based on the percentage of completion method
Provisions & contingencies, which one is true?
1. Provisions need not to be discounted
2. A provision for restructuring is recognised when the decision is taken by the Board of
Directors
3. A provision is recognised for an onerous contract
4. All of the above propositions are incorrect - ANS 3. A provision is recognised for an onerous
contract
Intangible assets, which one is true?
1. A brand can be recognised as an intangible asset when it is developed internally
2. Development costs can be recognised as an intangible asset
3. An intangible asset cannot be amortized, except if it is traded on an active market
4. None the above propositions are correct - ANS 2. Development costs can be recognised as
an intangible asset
Lease, which one is true?
1. Only contracts that take the legal form of a lease are included in the scope of IAS 17
2. The nature of the leased asset is not considered in the lease classification assessment
3. If the lease is a finance lease, the lessor continues recognising the leased asset in his
financial statements
4. All the above propositions are incorrect - ANS 4. All the above propositions are incorrect
Impairment, which one is true?
1. For a goodwill, an impairment review only needs to be performed when there is an indication
of impairment
2. If the fair value less costs to sell of an asset exceeds its carrying amount, it is not needed to
compute its value in use in the context of an impairment test
3. All of the above propositions are incorrect - ANS 2. If the fair value less costs to sell of an
asset exceeds its carrying amount, it is not needed to compute its value in use in the context of
an impairment test
Control, which one is true?
,P owns 60% of company A shares
P owns 20% of company B Shares
A owns 40% of company B shares
There are no shareholders agreements in relation with any of the companies
-P's percentage of interest in B is 60% and voting rights are 60%
-P's percentage of interest in B is 44% and voting rights are 60%
-P's percentage of interest in B is 60% and voting rights are 44% - ANS -P's percentage of
interest in B is 44% and voting rights are 60% X
Consolidation method, which one is true?
P owns 60% of company A shares
P owns 20% of company B Shares
A owns 40% of company B shares
There are no shareholders agreements in relation with any of the companies
-B is consolidated using the proportionate consolidation method
-B is consolidated using the full consolidation method
-B is consolidated using the equity method - ANS
Depreciation, which one is true?
P acquired a building for an amount of €10.000.000. Its useful life is 20 years and the residual
value €2.000.000. The annual straight line depreciation charge is
- €500.000
- €400.000
- €100.000 - ANS - €400.000
Translation of financial statements, which one is true?
The company functional currency is EUR. The company is part of a group of which the reporting
currency is USD. The company was incorporated at the end of June. The balance sheet items
at the end of December (date of consolidation) are as follows:
‐ Current assets : 100 EUR
‐ Share capital : 50 EUR
‐ Retained Earnings : 50 EUR (credit balance)
The exchange rates are the following:
‐ End of June : 1,5 USD/EUR
‐ Average for the second semester : 1,4 USD/EUR
‐ At the end of December : 1,2 USD/EUR
,-At the end of December the Cumulative Translation Reserve amounts to 60 (credit amount)
-At the end of December the Cumulative Translation Reserve amounts to 25 (debit amount)
-At the end of December the Cumulative Translation Reserve amounts to 55 (debit amount) -
ANS -At the end of December the Cumulative Translation Reserve amounts to 25 (debit
amount)
IFRS conceptual framework, which one is true?
-The full set of financial statements is made of a statement of financial position, a statement of
comprehensive income, a statement of changes in equity and a statement of cash flows
-For the financial statements to be reliable the economic reality of a transaction must be
reflected irrespective of its legal qualification
-Financial statements are not presented on a going concern basis but with previous year
comparative figures - ANS -For the financial statements to be reliable the economic reality of a
transaction must be reflected irrespective of its legal qualification
A. Revenue Recognition, which one is true?
1. Dividend income can be recorded as from the date the dividend can be collected from the
paying company or its bank
2. Dividend income is recorded when the shareholder's right to receive payment is established
3. Dividend income is recorded, by prudence, upon its collection - ANS 2. Dividend income is
recorded when the shareholder's right to receive payment is established
B. Fair Value, which one is true?
1. Fair Value is the amount for which an asset could be exchanged between knowledgeable,
willing parties, in an arm's length transaction
2. Fair Value is the amount for which an asset could be exchanged (or a liability settled)
between knowledgeable, willing parties, in an arm's length transaction
3. Fair Value is the amount for which an asset could be exchanged between knowledgeable,
willing parties, in an arm's length transaction, based on transaction values in an active trading
market - ANS 2. Fair Value is the amount for which an asset could be exchanged (or a liability
settled) between knowledgeable, willing parties, in an arm's length transaction
C. Deferred taxes, which one is true?
1. Deferred taxes accounting and recognition are in the majority of cases favorable to the
company in terms of taxes cash payments planning
2. Deferred taxes accounting and recognition are in the majority of cases unfavorable to the
company in terms of taxes cash payments planning
, 3. Deferred taxes accounting and recognition have no impact on taxes cash payments due -
ANS 3. Deferred taxes accounting and recognition have no impact on taxes cash payments
due
Long term contracts (IAS II) When determining the expected gross margin on the contract,
which one is true?
1. Direct costs include borrowing costs
2. Direct costs do not include borrowing costs
3. Once the gross margin estimate has been determined at the end of the first year, it cannot be
adjusted during the following years before the end of the contract. - ANS 1. Direct costs include
borrowing costs
E. IFRS Financial statements, which one is true?
1. Inappropriate accounting treatment can be rectified by a disclosure or explanatory note
2. If management concludes that applying an IFRS requirement would be misleading, deviation
from IFRS is authorized, provided disclosure in a note is done
3. Deviation from IFRS is authorized when another treatment would also give a true and fair
view - ANS 2. If management concludes that applying an IFRS requirement would be
misleading, deviation from IFRS is authorized, provided disclosure in a note is done
Control, which one is true?
P owns 70% of company A shares
P owns 20% of company B Shares A
owns 40% of company B shares
There are no shareholders agreements in relation with any of the companies
-P's percentage of interest in B is 70% and voting rights are 60%
-P's percentage of interest in B is 48% and voting rights are 60%
-P's percentage of interest in B is 60% and voting rights are 48% - ANS -P's percentage of
interest in B is 48% and voting rights are 60%
Consolidation method, which one is true?
P owns 60% of company A shares
P owns 20% of company B Shares
A owns 40% of company B shares
There are no shareholders agreements in relation with any of the companies
-B is consolidated using the proportionate consolidation method
-B is consolidated using the full consolidation method
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ALICE12. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now
