INTERNATIONAL FINANCIAL REPORTING STANDARDS
(IFRS) EXAMINATION QUESTIONS AND CORRECT
ANSWER&EXPLANATION|GRADED A+ STUDY GUIDE
SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. IFRS stands for:
International Accounting Standards Board
A. International Fiscal Reporting System
B. International Financial Reporting Standards
C. Internal Financial Reporting Structure
D. International Finance Regulation Standards
Answer: B
Rationale: IFRS are globally recognized accounting standards.
2. IFRS are primarily issued by the:
International Accounting Standards Board
A. Internal Revenue Service
B. International Accounting Standards Board
C. Federal Reserve System
D. Securities and Exchange Commission
Answer: B
Rationale: IASB develops and issues IFRS.
3. The primary objective of IFRS is to:
A. Eliminate taxes globally
B. Promote transparent and comparable financial reporting
C. Increase inventory turnover only
D. Replace all auditing standards
Answer: B
Rationale: IFRS improves global comparability.
,4. IFRS are generally considered:
A. Rules-based standards only
B. Principles-based standards
C. Tax regulations only
D. Internal audit procedures only
Answer: B
Rationale: IFRS emphasize professional judgment.
5. The conceptual framework assists in:
A. Inventory counting only
B. Developing consistent accounting standards
C. Payroll processing only
D. Tax filing only
Answer: B
Rationale: Framework guides accounting decisions.
6. Financial statements prepared under IFRS include:
A. Statement of financial position
B. Statement of profit or loss
C. Statement of cash flows
D. All of the above
Answer: D
Rationale: IFRS requires a complete set of financial statements.
7. The IFRS equivalent of the balance sheet is called:
A. Statement of equity
B. Statement of financial position
C. Statement of operations
D. Statement of valuation
Answer: B
Rationale: IFRS terminology differs slightly from GAAP.
, 8. Assets are defined as:
A. Present obligations only
B. Resources controlled expected to provide future economic benefits
C. Owner contributions only
D. Revenue reserves only
Answer: B
Rationale: Standard IFRS asset definition.
9. Liabilities are:
A. Future revenues only
B. Present obligations from past events
C. Equity contributions only
D. Inventory balances only
Answer: B
Rationale: Liabilities require settlement obligations.
10. Equity is calculated as:
Equity = Assets - Liabilities
A. Assets − Liabilities
B. Revenue − Expenses
C. Cash + Inventory
D. Sales − Taxes
Answer: A
Rationale: Equity represents residual interest.
11. Revenue recognition under IFRS generally occurs when:
A. Cash is received only
B. Control of goods or services transfers to customer
C. Inventory is purchased
D. Tax returns are filed
Answer: B
Rationale: Revenue recognized upon satisfaction of obligations.
(IFRS) EXAMINATION QUESTIONS AND CORRECT
ANSWER&EXPLANATION|GRADED A+ STUDY GUIDE
SOUTHERN NEW HAMPSHIRE UNIVERSITY
1. IFRS stands for:
International Accounting Standards Board
A. International Fiscal Reporting System
B. International Financial Reporting Standards
C. Internal Financial Reporting Structure
D. International Finance Regulation Standards
Answer: B
Rationale: IFRS are globally recognized accounting standards.
2. IFRS are primarily issued by the:
International Accounting Standards Board
A. Internal Revenue Service
B. International Accounting Standards Board
C. Federal Reserve System
D. Securities and Exchange Commission
Answer: B
Rationale: IASB develops and issues IFRS.
3. The primary objective of IFRS is to:
A. Eliminate taxes globally
B. Promote transparent and comparable financial reporting
C. Increase inventory turnover only
D. Replace all auditing standards
Answer: B
Rationale: IFRS improves global comparability.
,4. IFRS are generally considered:
A. Rules-based standards only
B. Principles-based standards
C. Tax regulations only
D. Internal audit procedures only
Answer: B
Rationale: IFRS emphasize professional judgment.
5. The conceptual framework assists in:
A. Inventory counting only
B. Developing consistent accounting standards
C. Payroll processing only
D. Tax filing only
Answer: B
Rationale: Framework guides accounting decisions.
6. Financial statements prepared under IFRS include:
A. Statement of financial position
B. Statement of profit or loss
C. Statement of cash flows
D. All of the above
Answer: D
Rationale: IFRS requires a complete set of financial statements.
7. The IFRS equivalent of the balance sheet is called:
A. Statement of equity
B. Statement of financial position
C. Statement of operations
D. Statement of valuation
Answer: B
Rationale: IFRS terminology differs slightly from GAAP.
, 8. Assets are defined as:
A. Present obligations only
B. Resources controlled expected to provide future economic benefits
C. Owner contributions only
D. Revenue reserves only
Answer: B
Rationale: Standard IFRS asset definition.
9. Liabilities are:
A. Future revenues only
B. Present obligations from past events
C. Equity contributions only
D. Inventory balances only
Answer: B
Rationale: Liabilities require settlement obligations.
10. Equity is calculated as:
Equity = Assets - Liabilities
A. Assets − Liabilities
B. Revenue − Expenses
C. Cash + Inventory
D. Sales − Taxes
Answer: A
Rationale: Equity represents residual interest.
11. Revenue recognition under IFRS generally occurs when:
A. Cash is received only
B. Control of goods or services transfers to customer
C. Inventory is purchased
D. Tax returns are filed
Answer: B
Rationale: Revenue recognized upon satisfaction of obligations.
