CFA level 1 Test Questions and
Answers
1. faithful representation, substance over form, prudence,
neutrality, completeness: According to the IFRS what are the 5 qualities of financial
information that improve reliability
2. Costs can be reliably measured: According to IFRS what condition must be met
for revenue recognition 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.: A company accrued
wages of $2,000 and collected accounts receivable of $10,000. What best describes the effect
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 determining 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.: A company had 100,000
shares outstanding on 1 Jan 2009. The company has no plans to issue additional shares or
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, 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.: Under IFRS the preparation
of a complete set of financial statements is best described as a:
6. Amortized Cost
Bonds payable issued by a company are financial liabilities that are
measured at amortized cost.: 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:
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.: What features are unique to financial statements in IFRS
8. Current assets and current liabilities are listed before noncurrent
assets and noncurrent liabilities. Minority interest is listed
separately from equity or liabilities.: 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 lease payments estimated to be lease
interest expense would lower the
2/
15
Answers
1. faithful representation, substance over form, prudence,
neutrality, completeness: According to the IFRS what are the 5 qualities of financial
information that improve reliability
2. Costs can be reliably measured: According to IFRS what condition must be met
for revenue recognition 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.: A company accrued
wages of $2,000 and collected accounts receivable of $10,000. What best describes the effect
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 determining 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.: A company had 100,000
shares outstanding on 1 Jan 2009. The company has no plans to issue additional shares or
1/
15
, 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.: Under IFRS the preparation
of a complete set of financial statements is best described as a:
6. Amortized Cost
Bonds payable issued by a company are financial liabilities that are
measured at amortized cost.: 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:
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.: What features are unique to financial statements in IFRS
8. Current assets and current liabilities are listed before noncurrent
assets and noncurrent liabilities. Minority interest is listed
separately from equity or liabilities.: 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 lease payments estimated to be lease
interest expense would lower the
2/
15
