1. IFRS 5 covers: (i) (ii) (iii)
The classification, measurement and presentation of assets ‘held for sale’. The classification and presentation of discontinued operations. The impairment of long-lived assets to be held and used. 1. 2. 3
i ii iii i-ii
2. Assets that meet the criteria cr iteria to be classified as ‘held for sale’ are measured 1. !arr !arr" "ing ing amo amoun unt. t. 2. ‘#air ‘#air value, value, less less costs costs to sell’ sell’.. 3. The The lo$ lo$er er of 1 and and 2. . The The high higher er of of 1 and and 2. 2. 3. For assets that meet the criteria to be classified as ‘held for sale’ depreciatio o such assets: 1. !eases. 2. %s rev reverse ersed. d. 3. %s charge charged d to disco discontin ntinue ue opera operation tions. s. . !lassif !lassified ied as ad&unct ad&unct account account !. "eld for sale applies to: 1. 'on-c 'on-curr urrent ent liab liabili ilitie ties. s. 2. 'on-c 'on-curr urrent ent asset assets. s. 3. uit". t". . !urr !urren entt asse assets ts.. 5. A disposal #roup$ %hich %as part of a cash&#eerati# uit:
1. *ecomes a separate cash-generating unit. 2. *ecomes a non-current asset. 3. %s ignored. . *ecomes a current asset. '. A firm purchase commitmet is a a#reemet$ bidi# o both parties$ that:
(i) (ii) (ii) (ii (iii) 1. i
+pec +pecifi ifies es all all sig signif nifica icant nt terms terms,, inclu includin ding g the the price price and and timing timing of the transactions. %nclu %nclude des s a disi disinc ncent entive ive for for nonnon-pe perfo rforma rmanc nce, e, $hic $hich h is suff suffici icient entl" l" large to mae performance highl" probable. %s $it $ith h an an unr unre elate ated pa part" rt".
2. 3. . .
ii iii i- ii i- iii
(. Recoverable amout is a asset’s: 1. ‘fair value, less costs to sell’. 2. value in use. 3. The lo$er of 1 and 2. . #air alue and alue in use . The higher of 1 and 2. ). For a asset to be held for sale$: a. %t must be available for immediate sale in its present condition. b. %ts sale must be highl" probable. c. The management must be committed to a plan to sell the asset. d. The management must have an active programme to locate a bu"er. e. The asset must be activel" mareted for sale. f. The sale should be e/pected to be completed $ithin one "ear from the date of classification. g. The asset should be full" depreciated.
1. 2. 3. . . 0.
i ii iii i- v i- vi i vii
*. +he a ba, ac-uires a o&curret asset or disposal #roup eclusivel/ %ith a vie% to its subse-uet disposal$ it shall classif/ the o&curret asset or disposal #roup as ‘held for sale’ at the ac-uisitio date$ ol/ if: 1. The one "ear reuirement is met. 2. bu"er has been identified. 3. %t $ill be sold at a premium to net assets. 10. If the criteria are met after the balace sheet date$ a ba, shall: 1. !lassif" a non-current asset as ‘held for sale’ in those financial statements. 2. hen those criteria are met, after the balance sheet date, but before the approval of the financial statements for issue, the ban shall disclose the information in the notes. 3. !lassif" a non-current asset as ‘discontinued operations’ in those financial statements. 11. If the disposal #roup to be abadoed: represents a separate ma&or line of business or geographical area of operations,
-
is part of a single co-ordinated plan to dispose of a separate ma&or line of business or geographical area of operations or is a subsidiar", acuired e/clusivel" $ith a vie$ to resale,
at the date on $hich it ceases to be used, the ban shall present the results and cash flo$s of the disposal group as4 1. ‘5iscontinued operations’. 2. ‘6eld for sale’. 3. ‘!ontinuing operations’. 12. If a e%l/ ac-uired asset is ‘held for sale’$ the asset or disposal #roup %ill be measured at: 1. !ost. 2. #air value, less costs to sell’. 3. The lo$er of 1 and 2. . The higher of 1 and 2. 13. If the asset or disposal #roup is ac-uired as part of a busiess combiatio$ it shall be measured at: 1. !ost. 2. #air value, less costs to sell’. 3. The lo$er of 1 and 2. . The higher of 1 and 2. 1!.Subse-uet remeasuremet: rovisios for obsolete ivetor/ ad doubtful debts should be revie%ed: 1. *efore the group’s ‘fair value, less costs to sell’ is remeasured. 2. fter the group’s ‘fair value, less costs to sell’ is remeasured. 3. t the same time that the group’s ‘fair value, less costs to sell’ is remeasured. 15. A adustmet$ to the carr/i# amout of a o&curret asset that ceases to be classified as ‘held for sale’$ is recorded i: 1. uit". 2. %ncome from continuing operations. 3. %ncome from discontinued operations. Whi c hoft hef o l l o wi ngi sac h a ng ei na c c o unt i ngpo l i c y ? 1 6. a .Cor r e c t i onofa ne r r orus i ngt her e t r oa c t i v ea ppr oa c hwi t hr e s t a t e me nt . b.Changef r om ani nc or r e c tme t hodt oac or r e c tme t hod. c .Cha ng ei nt hea mo r t i z a t i o nme t ho dus e d, a sar e s ul to fc ha ng e dc o r po r a t er e po r t i ng o b j e c t i v e s . d. Cha ng ei nt henumbe ro ft o t a le x pe c t e ds e r vi c e mi l e sf o rat r uc ka mo r t i z e dunde rt he uni t s o f pr oduc t i o nme t hod.
_ _ _ _ _2.Whi c ho ft hef ol l o wi ngi sac ha ng ei na c c o unt i ngpol i c yt obegi v e nr e t r oa c t i v e t r e a t me nt ? a .Cha ng et oLI F Of orafir mi ni t sni nt hy e a ra n dt ha ti suna bl et or e c o ns t r uc tLI F O o pe ni ngi nv e nt o r y . b.Changei namor t i za t i onme t hod, bas e donne wi nf or mat i ona bouthow as s e t sar e a c t ua l l yus e d. c .Cha ng ei na c c o unt i ngpol i c yf orc o ns t r uc t i onc o nt r a c t s : a l lc o nt r a c t st oda t eha v ebe e n nomo r et ha ns i xmo nt hsl o ng ,a ndha v eus e dc o mpl e t e dc o nt r a c t ; pe r c e n t a g e o f c o mpl e t i oni sb ei ngus e df orat hr e e y e arc ont r a c t . d. Cha ng ef r o mf ul lc o s t i ngt ot hes uc c e s s f ule ffo r t sme t ho do fa c c o unt i ngf o rna t ur a l r e s o ur c e st oc o mpl ywi t hi ndus t r ypr a c t i c e . _ _ _ _ _3.Ther e t r o ac t i v ea ppr o ac hwi t hnor e s t a t e me nti sus e df o rwhi c hoft hef o l l o wi ng: a .Co r r e c t i nge r r o r sa ndma k i nge s t i ma t ec h a ng e s . b.Changi ngi nve nt or yc os tflow a s s umpt i ons( FI FO,LI FO)whe nonl yope ni ngbal anc e s c a nb er e c o ns t r u c t e d. c .Cha ngi ngt ot hec o mpl e t e dc o nt r a c tme t hodo fa c c o unt i ngf o rl ong t e r mc o nt r a c t st o c o nf o r mt oi ndus t r yno r mswhe npr i o ry e a r sc a nber e c o ns t r uc t e d. d. Cor r e c t i nger r or sa ffe c t i ngpr i ory e ar s ’ i nc o me . _ _ _ _ _4.Ac o mpa n yc h a ng e df r o m pe r c e n t a g e o f c o mpl e t i o n( PC)t oc o mpl e t e dc o nt r a c t( CC)f o r fina nc i a la c c o unt i ngpur po s e sdur i ng20 x 5t oc onf o r mt oi ndus t r ynor ms . Pr i ory e a r s ’ r e s ul t sc a nno tber e c ons t r u c t e d,butope ni ngba l a nc e sc a nber e s t a t e d. a .Be g i nni ng1J a nua r y2 0 x5 ,CCs ho ul db eus e df o rc o ns t r uc t i o na c c o unt i nga ndt he di ffe r e nc eb e t we e ni nc o meunde rt het wome t ho dsf o ry e a r sb e f o r e2 0 x 5i sd i s c l o s e d i nt he2 0 x 5i nc o mes t a t e me nt . b.Be gi nni ng1J a nuar y20 x5 ,CCs houl dbeus e df orc ons t r uc t i ona c c ount i ngbutno e nt r yi sma def o rt hee ffe c t so ft hec h ang eony e a r sbe f o r e2 0 x 5 .
c .Be g i nni ng1J a nua r y2 0 x 5 ,CCs ho ul db eus e df o rc o ns t r uc t i o na c c o unt i ng ,a ndt he di ffer encebet weeni ncomeundert het womet hodsf oryear sbef or e20x5i san a dj us t me ntt ot he3 1De c e mb e r2 0 x 5r e t a i ne de a r ni ngb a l a nc e . d. Be g i nni ng1J a nua r y2 0 x 5 ,CCs ho ul db eus e df o rc o ns t r uc t i o na c c o unt i ng ,a ndt he di ffer encebet weeni ncomeundert het womet hodsf oryear sbef or e20x5i san a dj us t me ntt ot he1J a nua r y2 0x 5r e t a i ne de a r n i ngsb a l a nc e . _ _ _ _ _5.Whe na c c o unt i ngc ha ng eso re r r orc o r r e c t i onsa r er e c or de d,c e r t a i ndi s c l os ur e sa r e us ua l l yr e qui r e d.Ade s c r i pt i onoft hee ffe c toft hec ha ng eont hefina nc i a ls t a t e me nt so f t hec ur r e nta ndpr i orpe r i odsi sr e qui r e ddi s c l os ur ee x c e ptf or : a .Cha ng ei na c c o unt i ngpo l i c y . b.Changei nac c ount i nge s t i ma t e . c .Cor r e c t i onofa ne r r or . d.Noneoft heabove. _ _ _ _ _6.Whenacompanyc hangesi t smet hodofamor t i zat i onofanas s etbecauseofachangei n e c o no mi cc o ndi t i o ns , t hec h ang es ho ul db ea c c o unt e df o r : a .Re t r oa c t i v e l ywi t hr e s t a t e me ntofpr i ory e a r s . b.Re t r oac t i ve l ywi t houtr e s t at e me ntofpr i orye a r s . c .Al li nt hey e a ro ft hec h ang e . d. Ov e rt her e ma i ni ngs e r vi c el i f eoft hea s s e t . _ _ _ _ _7.Qui c kCompanyc hangedr eve nuer ec ogni t i onmet hodsf ora c c ount i ngpur pose sand c o r r e c t l yc o mput e dac umul a t i v ee ffe c tb e f o r et a xo f$ 6 0 0( r e duc e si nc o me ) . Thet a xr a t e i s3 0 %.Thec ha ng ei sat e mpo r a r ydi ffe r e nc eb e t we e na c c o unt i nga ndt a x a bl ei nc o me . Thee nt r yt or e c o r dt hec ha ng ei na c c o unt i ngpr i nc i pl ei nc l ude s : a .Cr e di ta c c o unt sr e c e i v abl e$ 42 0 . b.De bi tf ut ur ei nc omet a xas s e t$1 80 . c .De b i ti nc o met a xpa y a b l e$ 4 2 0 . d. De bi tr e t a i ne de a r n i ngs$ 6 0 0 . .F _ _ _ _ _8 i doDogFoodCompanychangedi t smet hodofac c ount i ngf ori nvent or yf r om Aver age Co s tt oF I F Oi n2 0 x 5f o rb ot ht a xandfina nc i a la c c o unt i ngpur po s e s .T a xr e t ur nswe r e r e fil e d.The2 0 x 4e n di ngi n ve nt o r ywa s$ 4 0 , 0 0 0unde rAv e r a g eCo s ta nd$ 5 5 , 0 0 0unde r FI F O.F i dodi s c l os e s2 0 x4a nd2 0 x5r e s ul t sc ompa r a t i v e l y .Thet a xr a t ei s3 0 %.Thee nt r y t or e c or dt hec ha ng ei na c c o unt i ngpr i nc i pl ei nc l ude s : a .Cr e di tf ut ur ei nc omet a xl i a bi l i t y$ 4, 5 00 . b.De bi tr e t ai ne de ar ni ngs$1 0 , 5 00 . c .Cr e di ti nc o met a xpa y a bl e$ 4 , 5 0 0 . d. De bi ti nc o met a xr e c e i v a bl e$ 4, 5 0 0 .
_ _ _ _ _9 s s e tpur c ha s e d1J a nua r y2 0 x 4,c o s t i ng$ 1 0 , 0 0 0 ,wi t ha10 y e a rus e f ull i f ea ndno .Ana s a l v ag ev al ue ,wa sa mor t i z e dunde rt hes t r a i ght l i neme t hoddur i ngi t sfir s tt hr e eye a r s . Dur i ng2 0 x7 ,t het o t a lus e f ull i f ewa sr e e s t i ma t e dt obe1 7ye a r s .Wha ti st hea mountof a mo r t i z a t i o ne x pe ns ei n2 0 x 8? a.$462
b.$ 41 2 c .$464 d.$500 _ _ _ _ _10 Whi c ho ft hef ol l o wi ngi sno ta ppr opr i a t ewhe ni ti sdi s c o ve r e dt ha ta5 y e ari ns ur a nc e . pr emi um pa yment2year sa gowasdebi t edt oi nsur anceexpense ? a .Ac r e di tt opr e pa i di ns ur a nc e . b.Ar e t r oa c t i ver e s t at e me ntoft hei nc omes t a t e me ntoft hepr e vi ousye ar . c .Ar e t r o a c t i v er e s t a t e me ntoft heba l a nc es he e toft hepr e vi ousy e ar . d. Af o ot no t ee x pl a i ni ngt hei mpa c to ft hee r r o ro nne ti nc o mea nd e a r ni ngspe rs ha r eo ft hec ur r e nty e ar . _ _ _ _ _11 TheGr e a tCo mpa n yunde r s t a t e di t si n ve nt o r yb y$ 5 , 0 0 0a tt hee n do f . 2 0 x4 .I ft hee r r orwa sdi s c o v e r e de a r l yi n2 0 x5a f t e rt he2 0x 4booksh a ve be e nc l os e d,whi c hoft hef ol l owi ngwi l lbeappr opr i a t et oc or r e c tt he e r r or ?( I gnor ei nc o met a xe ffe c t . ) a .Ade bi tt oi nv e nt or yandac r e di tt or e t a i ne de a r ni ngso f$ 5 , 0 0 0. b.Ac umul a t i vee ffe c tof$5, 00 0pr e s e nt e dont her e t ai ne de ar ni ngs s t a t e me ntf or2 0 x5 . c .Ade duc t i o no f$ 5 , 0 0 0f r o mt heb e gi nni ngb al a nc eo fr e t a i ne de a r n i ngs i nt hes t a t e me ntofr e t a i ne de a r ni ngsf or2 0 x 5. d.Noneoft heabove. _ _ _ _ _12 I ft hee r r orde s c r i be di nque s t i on1 1i sdi s c o v e r e da f t e rt he2 0x 5booksha v ebe e nc l os e d, . t hedi s c o ve r yoft heer r orwi l lr e qui r e : a . a .ade bi tt oi nv ent or yof$ 5, 0 00 . b.a$ 5 , 0 00a dj us t me nti nt he20 x6i nc omes t a t e me nt . c .ade bi tt opr i ory e a ra dj us t me nt . d.noneoft heabove. Dur i ng2 0 x5 ,Ya mmaCo mpa n ydi s c o v e r e dt ha ti t si n ve nt o r i e swe r eo v e r s t a t e db y _ _ _ _ _ 1 3 . $ 10 , 0 00and$ 20 , 0 00att hee ndof2 0x 4a nd2 0x 5, r e s pe c t i v el y .I ft he2 0x 5booksa r es t i l l ope n,t he s ee r r or swi l lbec or r e c t e db yde bi t i ngr e t a i ne de ar n i ngs , e ffe c tofe r r or ,a nd c r e di t i ngi nve nt or ya t : a .$ 0 b.$ 10 , 0 00 c .$ 20 , 0 00 d. $ 3 0 , 0 0 0 _ _ _ _ _14 As s umet hes a meda t aa si nque s t i o n1 3 ,e x c e p tt ha tt ho s ee r r or swe r edi s c o ve r e da f t e r . t he2 0 x5bookswe r ec l os e d.The s ee r r or swi l lbec o r r e c t e db yde bi t i ngr e t a i ne de a r ni ngs , e ffe c tofe r r or ,a ndc r e di t i ngi nv ent or ya c c ounta t : a .$ 0. b.$ 10 , 0 00 . c .$ 20 , 0 00 . d. $ 3 0 , 0 0 0 .
14
he opei# capital is ascertaied b/ prepari#:
24
34
!4
54
'4
(4
)4
*4
104
114
124
134
1!4
154
(a) !ash boo(b) !reditors 7c (c) 5ebtors 7c (d) 8pening statement of affairs. 4 A si#le etr/ s/stem it: (a) !omplete and scientific s"stem(b) %ncomplete and unscientific 4 (c) %ncomplete and scientific (d) !omplete and unscientific Si#le etr/ s/stem has effect: (a) 8ne effect 4 (b) To$ effect(c) Three effect (d) 'one of the above I si#le etr/ s/stem$ it is ot possible to prepare: (a) 9eceipts and pa"ments 7c(b) Trial balance 4 (c) *alance sheet (d) ccount sales A si#le etr/ s/stem is usuall/ adopted b/: (a) !ompan" (b) :artnership(c) ;overnment 4 (d) 'one of above Si#le etr/ s/stem is must suited %here: (a) !ash transactions are man" 4 (b) !redit transactions are man".(c) !ash < credit transactions are more. (d) 'one of the above 6apital ca be obtaied b/ prepari#: (a) !ash boo (b) +tatement of affairs 4 (c) 5ebtors 7c (d) !reditors 7c 6redit sale ca be obtaied b/ prepari#: (a) !ash boo (b) +tatement of affairs(c) 5ebtors 7c 4 (d) !reditors 7c 6redit purchase ca be calculated b/ prepari#: (a) !ash boo (b) +tatement of affairs(c) 5ebtors 7c (d) !reditors 7c 4 6ash i had ca be obtaied b/ prepari#: (a) !ash boo 4 (b) +tatement of affairs(c) 5ebtors 7c (d) !reditors 7c I si#le etr/ s/stem profit is calculated as follo%s: (a) 8pening !apital = 5ra$ing = #resh !apital- nding capital (b) !apital at the end 5ra$ing #resh capital - 8pening capital (c) !apital at the end = 5ra$ing #resh capital. -8pening capital 4 (d) 'one of the above I si#le etr/ s/stem ol/ accouts are opeed: (a) :ersonal 7c4 (b) 9eal 7c(c) 'ominal 7c (d) 9eal < 'ominal 7c Si#le etr/ s/stem caot be a maitaied b/: (a) >oint stoc compan" 4 (b) :artnership 7c(c) +ole-tradership 7c (d) ll of these Si#le etr/ s/stem of boo, 7 ,eepi# is #eerall/ follo%ed b/: (a) +mall business 4 (b) 'on trading(c) ?arge business (d) 'one A statemet of assets ad liabilities prepared uder the si#le etr/
1'4
1(4
1)4
1*4
204
s/stem is called: (a) *alance sheet (b) #inancial statement(c) !ash statement (d) +tatement of affairs 4 8et %orth of a or#ai9atio meas the ecess of its total assets over total: (a) /penses (b) %ncomes(c) ?iabilities 4 (d) *oth (a) and (b) +hich oe of is most li,el/ to have the lo%est rate of stoc, tur: (a) >e$eler 4 (b) ;reen grocer(c) +uper maret (d) 'e$s agent If a store’s mar, up is 25 the mar#i must be: (a) @ (b) 1@(c) 1A@ (d) 2A@ 4 If the rate of ;. o sale is 20 ad cost of #oods$ sold is Rs. 100$000$ the amout of ;. %ill be e-ual to: (a) 9s. 2A,AAA (b) 9s. 2,AAA 4 (c) 9s. 3,AAA (d) 9s. 1,AAA
