accounting issue

Topics: Balance sheet, Generally Accepted Accounting Principles / Pages: 8 (1830 words) / Published: Mar 31st, 2014
PART A
There are ten (10) multiple-choice questions in this part. Please CIRCLE the BEST answer for each multiple-choice question on the answer page in this exam paper. Each question is worth one (1) mark.
Question 1
In recent times the AASB has been reluctant to include alternative options within standards. This means:
(a) Entities within Australia will have the choice as to whether or not they choose to meet the requirements detailed in accounting standards.
(b) The number of options within IFRS-adopted accounting standards is expected to be restricted, although compliance with the AASB standard will mean compliance with the IASB standard.
(c) The number of options within IFRS-adopted accounting standards is expected to be restricted, which means that compliance with the AASB standard will not automatically mean compliance with the IASB standard.
(d) The AASB is in direct conflict with the aims of the Financial Reporting Council in relation to international harmonisation.
(e) No AASB standard will include alternative accounting options.

Question 2
A central goal in establishing a conceptual framework of accounting will be to obtain general consensus on:
(a) The scope and objectives of financial reporting.
(b) The qualitative characteristics that financial information should possess.
(c) What the elements of financial reporting are, including agreement on the characteristics and recognition criteria for assets, liabilities, income, expenses and equity.
(d) All of the above.
(e) (a) and (b) only. Question 3
In determining if the risk and rewards of ownership have been transferred, AASB 117 states the following may indicate a finance lease is in effect:
(a) Ownership of the asset transfers at the end of the lease term for a variable payment equal to its then fair value.
(b) Contingent rents exist.
(c) The lease is non-cancellable by the lessor.
(d) The lease term is for a major part of the economic life of the asset.
(e) All of the above.

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