Mock Exam Int Acc 3 exam with correct answers 2024

Events after the end of reporting period are - answer-both adjusting and non-adjusting events If a business entity entered into a certain related party transactions, it would required to disclose all of the following information except the - answer-nature of any future transactions planned between parties and the terms involved The correct order to present current asset is - answer-cash, accounts receivable, inventory, prepaid items Changes in accounting policy are generally reported as adjustments to - answer-Prior Period statements In the absence of IFRS that applies specifically to a transaction, what is the most authoritative source in developing and applying an accounting policy? - answer-The requirement and guidance in the standard or interpretation dealing with similar and related issues. Received the professional appraiser's report showing that the recoverable amount of the company's real estate property is lower than its carrying amount as of year end. - answer-Which of the following events after the reporting period requires adjustment in the entity's financial statements for the period just ended? Which statement/s is/are correct? - answer--An accounting standard is a guideline for financial accounting, such as how a firm prepares and presents its business income, expenses, assets, and liabilities as adopted by the IASB. - Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. Equity or debt securities held to finance future construction of additional plants should be classified in the financial position as: - answer-Long-term investments Accounting policies are the specific accounting principles and methods a company uses and considers most appropriate to present fairly its financial statements. - answer-True Which of the following post-balance-sheet events would generally require disclosure, but no adjustment of the financial statements? - answer-Issue of a large amount of capital stock If the loss on an account receivable results from a customer's bankruptcy after the balance sheet date, the company only discloses this information in the notes to financial statements. - answer-False Which of the following events after the reporting period would require adjustment in the financial statements? - answer-The determination of the amount of profit sharing or bonus payments on account of a present obligation existing at the end of the reporting period. In order to make adequate disclosure of related party transactions, companies should report the legal form, rather than the economic substance, of these transactions. - answer-False An entity shall change an accounting policy only if the change - answer--is required by the IFRS -results in the financial statements providing reliable and more relevant information about the effects of transaction, or events or conditions on the entity's financial position, financial performance or cash flows. Which of the following is a current asset? - answer-Trade installment receivables normally collectible in 18 months The basis for classifying assets as current or noncurrent is conversion to cash within - answer-The operating cycle or one year, whichever is longer. Which of the following events after the reporting period would require adjustment in an entity's financial statements? - answer-Bankruptcy of a customer, which occurs after the end of the reporting period and before the issuance of the statements, resulting in the loss of a trade receivable account. Financial statements are said to be authorized for issue when - answer-The management (board of directors) reviews the financial statements and authorizes them for issue. What is/are the disclosure/s required for non-adjusting events? - answer--The nature of the event -An estimate of its financial effect -In the event that an estimate of its financial effect cannot be made, a statement that the estimate of its financial effect cannot be made Assets minus liabilities - answer-The net assets of a business are equal to