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CFA level 1
Comprehensive
Questions
(Frequently Tested)
with Verified
Answers Graded A+
1/
19
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1. faithful representation, substance over form, prudence, neutrality,
complete- ness Answer: According to the IFRS what are the 5 qualities of financial information
that improve reliability
2. Costs can be reliably measured Answer: According to IFRS what condition must be
met for revenue recog- nition to occur?
3. Current ratio will decrease.
Accruing wages increases both current liabilities and expenses, but
collecting receivables has no effect on current assets or sales
therefore the current ratio and net income both decrease. Answer: A company
accrued wages of $2,000 and collected accounts receivable of $10,000. What best describes the
ettect of these two transactions on the company?
4. 200,000 for both the stock split and the stock dividend.
Stock dividends and splits are treated in the same way for purposes
of deter- mining weighted average number of shares outstanding the
adj in the # of shares is made as if the stock split or dividend
occurred at the beginning of the year. Answer: A company had 100,000 shares
outstanding on 1 Jan 2009. The company has no plans to issue additional shares or purchase treasury
shares during the year, but is planning either a two-for-one stock split or a 100 percent stock dividend
on 1 July. The number of shares used to determine eps at 31 Dec 2009 is
5. general requirement for financial statements. Answer: Under IFRS the
preparation of a complete set of financial statements is best described as a Answer:
6. Amortized Cost
Bonds payable issued by a company are financial liabilities that are
measured at amortized cost. Answer: A company issued bonds in 2009 that mature in
2019. The measurement basis that will most likely be used on the 2009 balance sheet for the bonds
is Answer:
7. Noncurrent Assets and noncurrent liabilities are listed before
current assets and current liabilities. Also, minority interest must be
shown as a component of equity. Answer: What features are unique to financial
statements in IFRS
8. Current assets and current liabilities are listed before noncurrent
1/
19
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assets and noncurrent liabilities. Minority interest is listed
separately from equity or liabilities. Answer: What features are unique to financial
statements in U.S. GAAP
9. The debt to equity ratio but not the interest coverage ratio.
The adjustments to convert operating leases would increase the
amount of total debt in the debt-equity ratio thus increasing the
ratio; the portion of the
2/
19
CFA level 1
Comprehensive
Questions
(Frequently Tested)
with Verified
Answers Graded A+
1/
19
, Contact for further communication
1. faithful representation, substance over form, prudence, neutrality,
complete- ness Answer: According to the IFRS what are the 5 qualities of financial information
that improve reliability
2. Costs can be reliably measured Answer: According to IFRS what condition must be
met for revenue recog- nition to occur?
3. Current ratio will decrease.
Accruing wages increases both current liabilities and expenses, but
collecting receivables has no effect on current assets or sales
therefore the current ratio and net income both decrease. Answer: A company
accrued wages of $2,000 and collected accounts receivable of $10,000. What best describes the
ettect of these two transactions on the company?
4. 200,000 for both the stock split and the stock dividend.
Stock dividends and splits are treated in the same way for purposes
of deter- mining weighted average number of shares outstanding the
adj in the # of shares is made as if the stock split or dividend
occurred at the beginning of the year. Answer: A company had 100,000 shares
outstanding on 1 Jan 2009. The company has no plans to issue additional shares or purchase treasury
shares during the year, but is planning either a two-for-one stock split or a 100 percent stock dividend
on 1 July. The number of shares used to determine eps at 31 Dec 2009 is
5. general requirement for financial statements. Answer: Under IFRS the
preparation of a complete set of financial statements is best described as a Answer:
6. Amortized Cost
Bonds payable issued by a company are financial liabilities that are
measured at amortized cost. Answer: A company issued bonds in 2009 that mature in
2019. The measurement basis that will most likely be used on the 2009 balance sheet for the bonds
is Answer:
7. Noncurrent Assets and noncurrent liabilities are listed before
current assets and current liabilities. Also, minority interest must be
shown as a component of equity. Answer: What features are unique to financial
statements in IFRS
8. Current assets and current liabilities are listed before noncurrent
1/
19
, Contact for further communication
assets and noncurrent liabilities. Minority interest is listed
separately from equity or liabilities. Answer: What features are unique to financial
statements in U.S. GAAP
9. The debt to equity ratio but not the interest coverage ratio.
The adjustments to convert operating leases would increase the
amount of total debt in the debt-equity ratio thus increasing the
ratio; the portion of the
2/
19
