ACCA Strategic Business Reporting (UK) UPDATED ACTUAL Questions and CORRECT Answers
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Course
ACCA Strategic Business Reporting
Institution
ACCA Strategic Business Reporting
ACCA Strategic Business Reporting (UK)
UPDATED ACTUAL Questions and
CORRECT Answers
The code of ethics and conduct - CORRECT ANSWER- • Integrity
• Objectivity
• Professional Competence and Due Care
• Confidentiality
• Professional behaviour
ACCA Strategic Business Reporting (UK)
UPDATED ACTUAL Questions and
CORRECT Answers
The code of ethics and conduct - CORRECT ANSWER✔✔- • Integrity
• Objectivity
• Professional Competence and Due Care
• Confidentiality
• Professional behaviour
Consequences of unethical behaviour - CORRECT ANSWER✔✔- The consequences for
individuals include:
• Fines
• The loss of professional reputation
• Being prevented from acting as a director or officer of a public company in the future
• The possibility of being expelled by a professional accountancy body
• A prison sentence
Purpose of Conceptual Framework - CORRECT ANSWER✔✔- To assist:
• the Board when developing new IFRS Standards, helping to ensure that these are based on
consistent concepts
• preparers of financial statements when no IFRS Standard applies to a particular transaction,
or when an IFRS Standard offers a choice of accounting policy
• all parties when understanding and interpreting IFRS Standards
Fundamental characteristics - CORRECT ANSWER✔✔- Relevance and faithful
representation are the fundamental characteristics of useful financial information
Asset - CORRECT ANSWER✔✔- A present economic resource controlled by an entity as a
result of a past event
Liability - CORRECT ANSWER✔✔- A present obligation of the entity to transfer an
economic resource as a result of a past event
Equity - CORRECT ANSWER✔✔- The residual interest in the net assets of an entity
Income - CORRECT ANSWER✔✔- Increases in assets or decreases in liabilities that result
in an increase to equity
Expenses - CORRECT ANSWER✔✔- Decreases in assets or increases in liabilities that
result in decreases to equity
Fair value - CORRECT ANSWER✔✔- The price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the
measurement date
IAS 1 Presentation of Financial Statements - CORRECT ANSWER✔✔- A complete set of
financial statements has the following components:
• a statement of financial position
• a statement of profit or loss and other comprehensive income (or statement of profit or loss
with a separate statement of other comprehensive income)
• a statement of changes in equity
• a statement of cash flows
• accounting policies note and other explanatory notes
Going concern - CORRECT ANSWER✔✔- Financial statements are prepared with the
expectation that a business will remain in operation for at least the next 12 months from the
reporting period
,IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Changes in
accounting policy - CORRECT ANSWER✔✔- An entity should only change its accounting
policies if required by a standard, or if it results in more reliable and relevant information
New accounting standards normally include transitional arrangements on how to deal with
any resulting changes in accounting policy
If there are no transitional arrangements, changes in accounting policy should be applied
retrospectively. The entity adjusts the opening balance of each affected component of equity,
and the comparative figures are presented as if the new policy had always been applied
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Changes in
accounting estimates - CORRECT ANSWER✔✔- A change in an accounting estimate is not
a change in accounting policy
According to IAS 8, a change in accounting estimate must be recognised prospectively by
including it in the statement of profit or loss and other comprehensive income for the current
period and any future periods that are also affected
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Prior period errors -
CORRECT ANSWER✔✔- Prior period errors are misstatements and omissions in the
financial statements of prior periods as a result of not using reliable information that should
have been available
IAS 8 says that material prior period errors should be corrected retrospectively in the first set
of financial statements authorised for issue after their discovery. Opening balances of equity,
and the comparative figures, should be adjusted to correct the error
IAS 34 Interim Financial Reporting - CORRECT ANSWER✔✔- Interim financial reports
are prepared for a period shorter than a full financial year. Entities may be required to prepare
interim financial reports under local law or listing regulations
IAS 34 does not require the preparation of interim reports, but sets out the principles that
should be followed if they are prepared and specifies their minimum content
, IFRS 15 Revenue from Contracts with Customers: Revenue recognition - CORRECT
ANSWER✔✔- 1) Identify the contract
2) Identify the separate performance obligations within a contract
3) Determine the transaction price
4) Allocate the transaction price to the performance obligations in the contract
5) Recognise revenue when (or as) a performance obligation is satisfied
IFRS 15 Revenue from Contracts with Customers: Contract modifications - CORRECT
ANSWER✔✔- A contract modification is a change in the scope or price of a contract
The modification is accounted for as a separate contract if:
• the scope of the contract increases because of the addition of distinct goods or services, and
• the price increases by an amount that reflects the stand-alone selling prices of the additional
goods or services
If not accounted for as a separate contract, the modification will be accounted for as:
• the termination of the existing contract and the creation of a new contract if the remaining
goods are distinct from those transferred before the modification • • part of the original
contract, if the remaining goods and services are not distinct from those transferred before the
modification and so form part of a single performance obligation
IFRS 15 Revenue from Contracts with Customers: Contract costs - CORRECT
ANSWER✔✔- IFRS 15 says that the following costs must be recognised as an asset (i.e.
capitalised):
• the costs of obtaining a contract excluding costs that would have been incurred regardless of
whether the contract was obtained or not
• the costs of fulfilling a contract if they do not fall within the scope of another standard (such
as IAS 2 Inventories) and the entity expects them to be recovered
The capitalised costs of obtaining and fulfilling a contract will be amortised to the statement
of profit or loss as revenue is recognised
General costs, and costs of wasted labour and materials, are expensed to profit or loss as
incurred
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