International Accounting Standards Exam Questions and Answers 100% Solved

International Accounting Standards

Exam Questions and Answers 100%

Solved


Why use international accounting standards? - ✔✔* Provides a

framework - 'rules' - for preparing financial statements

* Ensures accountants follow the same set of rules

* Reduce number of different accounting treatments

* Meet the director's duty to ensure the FS comply with IAS

* Meet the auditor's report requirements

Benefits of international accounting standards - ✔✔* Standardise

financial statements internationally

* Reduce variations of accounting treatments

* Allow users of FS to make inter-firm comparisons

IAS 1 Presentation of Financial Statements - ✔✔"to provide

information about the financial position, financial performance and
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, cash flows of an entity that is useful to a wide range of users in

making economic decisions"

* Requires compliance with accounting concepts

IAS2 Inventories - ✔✔* Requires inventories are valued at the

lower of cost and net realisable value

* COST - purchase price + any costs incurred to bring product to

where it is

* NRV - estimated selling price - costs necessary to bring product

into a selling condition

IAS 7 Cash Flow Statements - ✔✔* Requires a cash flow

statement is included in the FS

* Compliments IS & BS - IS reports on financial performance, BS

reports on financial position, CFS focuses on the changes in

financial position

* OPERATING ACTIVITIES - main revenue-producting activities,

interest & tax




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