T7 Online Practice Questions and Answers

Employee benefits that are expected to be settled wholly before twelve months after the end of the annual reporting people in which the employee rendered the related service are considered what kind of benefits?

A. Short-term benefits

B. Post-employment benefits

C. Termination benefits

D. Long-term benefits

What is the purpose of an income statement?

A. To show liability and equity and the manner in which those funds are employed

B. To account for changes in cash during the accounting period

C. To show details of the nature of a company's operating activities

D. To reconcile the beginning and ending balances of stockholders' equity

When a company provides information that is of sufficient importance to influence the judgment and decisions of an informed user, which principle of Level 3 of the conceptual framework is being represented?

A. Faithful representation

B. Measurement

C. Full disclosure

D. Going concern

Company XYZ does not disclose any information in the notes to their financial statements unless the value of the information to users exceeds the expense of gathering it. Which constraint of Level 3 of the conceptual framework does this represent?

A. Cost

B. Materiality

C. Expense

D. Disclosure

A statement of cash flows provides information on which of the following primary business activities of a company?

A. Cash inflows, cash outflows, payment of dividends

B. Operating activities, cash inflows, cash outflows

C. Cash sales, investing activities, payment of dividends

D. Operating, investing, and financing activities

IAS 19 requires that all numbers involved in accounting for defined benefit plans be presented as a single amount in the statement of financial position. What is this amount called?

A. Net defined benefit liability (asset)

B. Asset ceiling

C. Fair value

D. Net present value

Recognition of revenue when earned and the matching of expenses when incurred describes which of the following practices?

A. Business accounting

B. Cash basis accounting

C. IASB accounting

D. Accrual accounting

Which statement below most accurately describes a primary purpose of the International Accounting Standards Committee (IASC) Foundation?

A. Approves principles-based standards and informs International Accounting Standards Board (IASB) of implications of proposed standards

B. Oversees standards set for the public sector

C. Monitors International Accounting Standards Board (IASB)'s effectiveness, raise funds, approve budget, responsible for constitution

D. Provides advice to International Accounting Standards Board (IASB) on priorities

What is the present value of any economic benefits available in the form of refunds from or reductions in the future contributions to the defined benefits plan called?

A. Net defined benefit liability (asset)

B. Asset ceiling

C. Fair value

D. Net present value

A US-based company reports information about pending lawsuits in the notes to its financial statements. This is an example of which basic principle of accounting?

A. Full disclosure

B. Expense recognition

C. Going concern

D. Constraints