Test Bank - Applying IFRS Standards 4th Edition by Ruth Picker, Kerry Clark, John Dunn, All Chapters Included, Complete Guide A+, Newest Version 2025.

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Standards 4e
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Ruth Picker, Kerry Clark, John Dunn, David Kolitz,
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Gilad Livne, Janice Loftus, Leo van der
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,CHAPTER 1

The IASB and its Conceptual Framework


Learning Objectives

1.1 Describe the organisational structure of the key players in setting International Financial
Reporting Standards (IFRSs)

1.2 Describe the purpose of a conceptual framework – who uses it and why

1.3 Explain the qualitative characteristics that make information in financial statements
useful

1.4 Discuss the going concern assumption underlying the preparation of financial statements

1.5 Define the basic elements in financial statements – assets, liabilities, equity, income and
expenses

1.6 Explain the principles for recognising the elements of financial statements

1.7 Distinguish between alternative bases for measuring the elements of financial
statements

1.8 Outline concepts of capital.

,Test $ygBank $ygto $ygaccompany $ygApplying $ygIFRS
$ygStandards $yg4e



Multiple $ygChoice $ygQuestions


1. Which $ygof $ygthe $ygfollowing $ygstatements $ygis $ygINCORRECT?
Learning $ygObjective $yg1.1 $ygDescribe $ygthe $ygorganisational $ygstructure $ygof $ygthe $ygkey
$ygplayers $ygin $ygsetting $ygIFRSs:

*a. The $ygInternational $ygAccounting $ygStandards $ygBoard $ygwas $ygreplaced $ygby $ygthe
$ygInternational $ygStandards $ygCommittee $ygin $yg2001.

b. The $ygInternational $ygAccounting $ygStandards $ygBoard $ygis $ygfunded $ygby
$ygthe $ygIASC $ygFoundation.

c. The $ygresponsibility $ygfor $ygissuing $ygInternational $ygFinancial $ygReporting $ygStandards
$yglies $ygwith $ygthe $ygInternational $ygAccounting $ygStandards $ygBoard.

d. Members $ygof $ygthe $ygInternational $ygAccounting $ygStandards $ygBoard $ygare
$ygappointed $ygby $ygthe $ygIFRS $ygFoundation.




2. Which $ygof $ygthe $ygfollowing $ygbodies $ygreport $ygto $ygthe $ygIFRS $ygFoundation?
Learning $ygObjective $yg1.1 $ygDescribe $ygthe $ygorganisational $ygstructure $ygof $ygthe $ygkey
$ygplayers $ygin $ygsetting $ygIFRSs:

a. The $ygIASB $ygand $ygAASB
b. The $ygIASB, $ygAASB $ygand $ygthe $ygIFRS $ygAdvisory $ygCouncil
c. The $ygIASB $ygand $ygthe $ygFASB
*d. The $ygIASB $ygand $ygthe $ygIFRS $ygAdvisory $ygCouncil


3. Which $ygof $ygthe $ygfollowing $ygstatements $ygis $ygINCORRECT?
Learning $ygObjective $yg1.2 $ygDescribe $ygthe $ygpurpose $ygof $yga $ygconceptual $ygframework $yg–
$ygwho $yguses $ygit $ygand $ygwhy

a. The $ygFramework $ygidentifies $ygthe $ygqualitative $ygcharacteristics $ygthat $ygmake
$yginformation $ygin $ygfinancial $ygstatements $yguseful.

*b. The $ygFramework $ygdefines $ygprinciples $ygfor $ygaccounting $ygrecognition,
$ygmeasurement $ygand $ygdisclosure.

c. The $ygFramework $ygdefines $ygthe $ygobjective $ygof $ygfinancial $ygstatements.
d. The $ygFramework $ygdefines $ygthe $ygbasic $ygelements $ygof $ygfinancial
$ygstatements $ygand $ygthe $ygconcepts $ygfor $ygrecognizing $ygand $ygmeasuring

$ygthem $ygin $ygfinancial $ygstatements.




© $ygJohn $ygWiley $yg& $ygSons, 1.3
$ygLtd $yg2016

, 4. Which $ygof $ygthe $ygfollowing $ygstatements $ygis $ygCORRECT?
Learning $ygObjective $yg1.2 $ygDescribe $ygthe $ygpurpose $ygof $yga $ygconceptual $ygframework $yg–
$ygwho $yguses $ygit $ygand $ygwhy

*a. IAS $yg8 $ygAccounting $ygPolicies, $ygChanges $ygin $ygAccounting $ygEstimates, $ygand
$ygErrors $ygrequires $ygthat $ygThe $ygFramework $ygbe $ygfollowed $ygin $ygthe $ygabsence $ygof

$yga $ygspecific $ygstandard $ygor $yginterpretation.

b. IAS $yg8 $ygAccounting $ygPolicies, $ygChanges $ygin $ygAccounting $ygEstimates, $ygand
$ygErrors $ygrecommends, $ygbut $ygdoes $ygnot $ygrequire $ygThe $ygFramework $ygto $ygbe

$ygfollowed $ygin $ygthe $ygabsence $ygof $yga $ygspecific $ygstandard $ygor $yginterpretation.

c. The $ygFramework $ygis $ygused $ygsolely $ygby $ygthe $ygIASB $ygwhen $ygconsidering $ygnew
$ygaccounting $ygissues.

d. The $ygFramework $ygis $ygnon-binding $ygguidance $ygwhich $ygdoes $ygnot $yghave $ygto $ygbe
$ygfollowed $ygby $ygpreparers $ygof $ygfinancial $ygstatements.




5. The $ygFramework $ygfocuses $ygon:
Learning $ygObjective $yg1.2 $ygDescribe $ygthe $ygpurpose $ygof $yga $ygconceptual $ygframework $yg–
$ygwho $yguses $ygit $ygand $ygwhy

a. privately $ygowned $ygbusiness $ygentities $ygonly.
*b. business $ygentities $ygonly, $ygincluding $ygprivate $ygand $ygstate $ygowned $ygbusiness $ygentities.
c. business $ygentities, $ygalthough $ygthe $ygconcepts $ygmay $ygbe $ygapplied $ygto $ygother
$ygtypes $ygof $ygentities, $ygsuch $ygas $ygnot-for $ygprofit $ygentities.

d. all $ygtypes $ygof $ygentities, $ygincluding $ygbusiness $ygentities, $yggovernment $ygand
$ygnot-for $ygprofit $ygentities.




6. General $ygPurpose $ygFinancial $ygStatements:
Learning $ygObjective $yg1.2 $ygDescribe $ygthe $ygpurpose $ygof $yga $ygconceptual $ygframework $yg–
$ygwho $yguses $ygit $ygand $ygwhy

a. are $ygonly $ygnecessary $ygfor $ygusers $ygwho $ygdo $ygnot $yghave $ygthe $ygpower $ygto $ygobtain
$yginformation $ygin $ygaddition $ygto $ygthat $ygcontained $ygwithin $ygthe $ygGeneral

$ygPurpose $ygFinancial $ygStatement.

b. provide $ygall $ygthe $yginformation $ygthat $ygusers $ygmay $ygneed $ygto $ygmake $ygeconomic $ygdecisions.
c. focus $ygon $ygdisclosing $yginformation $ygrelevant $ygto $ygassessing $ygthe $ygability $ygof
$ygan $ygentity $ygto $yggenerate $ygfuture $ygcash $ygflows.

*d. meet $ygthe $yginformation $ygneeds $ygthat $ygare $ygcommon $ygto $ygall $ygusers.