1.What is a benefit of having a Conceptual Framework?

A. To enable the accountancy profession to more quickly solve emerging practical problems.
B. To provide information from which to build more useful standards.
C. To enable standard setting body to issue more useful and consistent pronouncements over
time
D. All of these.

2. If the closing inventory is understated, then the current year's profit will be
understated and next year's profit will be overstated.
A. True
B. False

3. Under IAS 16, if a company builds an office building for its own use, it may account for
the building at historical cost less accumulated depreciation and impairment losses, with
depreciation and impairment losses recognised in profit or loss.
A. True
B. False

4. Which of the following disclosures is not required by IAS 38?

A. Fair value of similar intangible assets used by its competitors.
B. Reconciliation of carrying amount at the beginning and the year-end.
C. Contractual commitments for the acquisition of intangible assets.
D. Useful lives of the intangible assets.

5. According to IAS 38 Intangible assets, expenditure during the research phase of a

project may sometimes be capitalised as an intangible asset.
A. True
B. False

6. Once recognized, intangible assets can be carried at:

A. Revalued amount less accumulated impairment.
B. Cost less accumulated impairment and less accumulated amortization.
C. Cost less accumulated impairment.
D. Cost plus a notional increase in fair value since the intangible asset is acquired.

7. Happy Plc vacated an office building and let it out to a third party on 30 June 20X8. The
building had an original cost of $800,000 on 1 January 20X0 and was being depreciated
over 50 years. It was judged to have a fair value on 30 June 20X8 of $800,000. At the year
end date of 31 December 20X8 the fair value of the building was estimated at $1.1 million.
Happy Plc uses the fair value model for investment property. What amount will be shown
in revaluation surplus at 31 December 20X8 in respect of this building?
A. 0
B. 136,000
C. 144,000
D. 444,000
8. If right-of-use assets relate to a class of property, plant and equipment to which the
lessee applies the revaluation model in IAS 16, a lessee may elect to apply that
revaluation model to all of the right-of-use assets that relate to that class of property,
plant and equipment.
A. True
B. False

9. Which one of the following is not required to be disclosed in a lessee's financial

statements in relation to its leases, to comply with the requirements of IFRS 16 Leases?
A. Interest expense on lease liabilities
B. A reconciliation between the total of future minimum lease payments and their present value
C. Total cash outflow for leases
D. Income from sub-leasing right of use assets

10. Popping Ltd has a machine which cost £50,000 and has a carrying amount of £40,000
on 1 June 20X7. This machine is depreciated at 20% per annum using the reducing
balance method. On 31 May 20X8, Popping Ltd carried out an impairment review and has
assessed that the fair value less disposal costs of the machine was £28,400 and the
value in use was £29,000. What is the impairment loss in respect of the machine as at 31
May 20X8?
A. £18,400
B. £3,600
C. £1,000
D. £3,000

11. An onerous contract is a contract in which __________ of meeting the obligations

under the contract __________ the economic benefits expected to be received under it.
A. Sunk costs; exceed
B. Unavoidable costs; exceed
C. Opportunity costs; are less than
D. Avoidable costs; are less than

12. An entity shall account for each business combination by applying the equity
method.
A. True
B. False

13. Under IFRS 3, at the acquisition date, the acquirer shall __________ the identifiable
assets acquired and liabilities assumed as necessary to apply other IFRSs subsequently.
A. Revaluate or classify
B. Classify or designate
C. Dispose or transfer
D. Transfer or designate

14. The Caspian Company leased a warehouse with adjoining land for a period of 15
years. The land has an indefinite useful life whereas the warehouse has a useful life of 15
years. Title to the land is not expected to pass at the end of the lease. Under IFRS 16
Leases, in respect of which items should a right-of-use asset and a lease liability be
recognised in the financial statements of Caspian?
A. Only the warehouse
B. Both the land and the warehouse
C. Neither asset
D. Only the land
15. The Kolpa Company purchased a building in January 20X6 for CU150,000. The
accounting depreciation charge is 5% straight-line. For tax purposes, depreciation of 2%
straight-line is deducted annually. The remaining cost will be deducted in future periods,
either as depreciation or through a deduction on disposal. The tax rate is 25%. According
to IAS 12 Income taxes, what should be the deferred tax balance at 31 December 20X9?
A. CU3,375 deferred tax asset
B. CU3,375 deferred tax liability
C. CU4,500 deferred tax asset
D. CU4,500 deferred tax liability

16. Using the definitions in the IASB Conceptual Framework for Financial Reporting,
which two of the following are examples of 'expenses'?

A. A decrease in economic benefits during the accounting period

B. A decrease in equity arising from a distribution to equity participants

C. A reduction in income for the accounting period

D. A loss on the disposal of a non-current asset

17. Which of the following is inventory classified into?

A. Raw materials

B. A house held for resale

C. Work in progress

D. Finished goods

E. All of the above

18. In a period of rising prices, applying the FIFO method in determining cost of
inventories would result in a lower cost of sales and higher closing inventory than the
AVCO method.

A. True
B. False

19. At year end, Lagon plc has the closing inventory amounted to £234,000 at cost. This
total includes the following two items: (1) 500 items which had cost £50 each and
normally sold for £100 each. These items are defective and can only be sold at 50% of
their normal selling price. Selling expenses were 5% of the proceeds. (2) 300 items which
had cost £50 each. After the date of the statement of financial position they were sold for
£48 each with selling expenses of £2 each. At what amount should total inventory be
shown in the Lagon plc’s statement of financial position at year end?

A.£231,550

B.£232,750
C.£232,800

D.£232,550

20. According to IAS 40, transfer to or from investment property should only be made
when there is a change in their use

A. True

B.False

21. Flappy Co entered into a 4-year lease agreement on 1 January 20X5. The agreement
meets the definition of a lease in accordance with IFRS 16. An initial payment of $160,000
was made on 1 January 20X5 followed by three annual payments on 1 January of
$150,000 each. The rate implicit in the lease is 10%. Flappy Co incurred initial direct costs
of $20,000 to set up the lease. What amount will be charged to the statement of profit or
loss in respect of this asset for the year ended at 31 December 20X6?

A.$138,257

B.$159,290

C.$164,290

D.$175,560

22. Flappy Co entered into a 4-year lease agreement on 1 January 20X5. The agreement
meets the definition of a lease in accordance with IFRS 16. An initial payment of $160,000
was made on 1 January 20X5 followed by three annual payments on 1 January of
$150,000 each. The rate implicit in the lease is 10%. Flappy Co incurred initial direct costs
of $20,000 to set up the lease. Which of the following entries could fully reflect the event
at 1 January 20X5?

A.Debit right-of-use asset $553,028, Credit Lease liability $553,028

B.Debit right-of-use asset $533,028, Credit Lease liability $533,028

C.Debit right-of-use asset $553,028, Credit Lease liability $393,028, Credit Cash $160,000

D.Debit right-of-use asset $533,028, Credit Lease liability $373,028, Credit Cash $160,000

23. According to IAS 12 Income taxes, deferred tax liabilities are the amounts of income
taxes payable in future periods in respect of taxable temporary differences.

A.True

B.False
24. Should the cost of maintaining an acquisitions department be included in the
consideration transferred in a business combination, according to IFRS 3 Business
combinations?

A.Yes

B.No

25. Figy Co entered into a 4-year lease agreement on 1 January 20X5. The agreement
meets the definition of a lease in accordance with IFRS 16. An initial payment of $100,000
was made on 1 January 20X5 followed by three annual payments on 1 January of
$100,000 each. The rate implicit in the lease is 10%. Figy Co incurred initial direct costs
of $20,000 to set up the lease. What is the cost of the right-of-use asset as at 1 January
20X5?

A.348,685

B.400,000

C.368,685

D.420,000

26. On 1 July 20X9 The Otakamiro Company handed over to a client a new computer
system of a type it has not sold before. The contract price for the supply of the system
and after-sales support for 12 months was CU800,000. Otakamiro estimates the cost of
the after-sales support at CU120,000 and it normally marks up such costs by 50% when
tendering for support contracts. Under IFRS 15 Revenue from contracts with customers,
the revenue Otakamiro should recognise in its financial year ended 31 December 20X9 is:

A.800,000

B.710,000

C.0

D.620,000

27. According to IAS 2 Inventories, which TWO of the following should be accounted for
in the cost of an inventory item?
A. Trade discounts received on purchase of inventories
B. Storage costs of finished goods
C. Import duties on shipping of inventories inwards
D. Material wasted due to a machine breakdown

28. The __________ of an asset is the estimated amount that an entity would currently
obtain from disposal of the asset, after deducting the estimated costs of disposal, if the
asset were already of the age and in the condition expected at the end of its useful life.
A. Residual value
B. Value in use
C. Cost to sell
D. Deemed cost

29. Which of the following is not an example of directly attributable costs according to
IAS 16?
A. Costs of employee benefits arising directly from the construction or acquisition of the item of
property, plant and equipment
B. Costs of site preparation
C. Costs of conducting business in a new location or with a new class of customer
D. Initial delivery and handling costs
E. Professional fees

30. According to IAS 16 Property, plant and equipment, the cost includes cash
equivalents paid to acquire an asset.
A. True
B. False

31. Which of the following items qualify as an intangible asset under IAS 38?
A. College tuition fees paid to employees who decide to enroll in an executive M.B.A program at
Harvard University while working with the company.
B. Legal costs paid to intellectual property lawyers to register a patent.
C. Advertising and promotion on the launch of a huge product.
D. Operating losses during the initial stages of the project.
32. According to IAS 38 Intangible assets, intangible assets with a finite useful life should
be measured at cost and tested annually for impairment.
A. True
B. False
33. Which of the following does not define investment property?
A. Property held to earn rentals
B. Property held for capital appreciation
C. Property used in the production or supply of goods or services
D. A and C
34. Under IAS 40 Investment property, which one of the following additional disclosures
must be made when an entity chooses the cost model as its accounting policy for
investment property?
A. The present value of the property
B. The net realisable value of the property
C. The value in use of the property
D. The fair value of the property
35. At the commencement date, a lessee shall measure the lease liability at the future
value of the lease payments that are paid at that date.
A. True
B. False

36. Under IAS 36 Impairment of assets, which one of the following statements best
describes 'value in use'?
A. The amount of cash or cash equivalents that could currently be obtained by selling an asset
in an orderly disposal
B. The present value of estimated future cash flows expected to arise from the continuing use of
an asset and from its ultimate disposal
C. The net amount which an entity expects to obtain for an asset at the end of its useful life
D. The amount at which an asset could be exchanged between knowledgeable, willing parties in
an arm's length transaction

37. The Plaice Company acquired a new filing machine, the list price of which was
$49,000. The supplier allowed a trade discount of $1,700 off the list price. On delivery, the
cost of installing the machine in its desired location was $450. According to IAS 16
Property, plant and equipment, at what cost should the filing machine be measured in the
financial statements of Plaice?
A. 49,000
B. 47,750
C. 49,450
D. 47,300
38. Which of the following may be included in the cost of finished goods of a
manufacturing company?
A. Production labour wages
B. Storage expenses for finished goods
C. Depreciation of delivery vehicles
D. Carriage outwards
39. It may be acceptable for inventories to be valued at selling price less estimated profit
margin.
A. True
B. False
40. The closing inventory of Jaycoon Ltd amounted to £203,000 at cost at year end of 30
September 20X4. This total figure includes the following items: (1) 600 items which had
cost £25 each. These items were found defective and remedial work in October 20X4 cost
£5 per item. They were sold in October 20X4 for £35 with total selling expenses of £600.
(2) 1,000 items which had cost £20 each and normally sold for £30. These items were
found damaged and will require rectification work costing £10 per unit before they can be
sold. Selling expenses are £1 per item. What amount should be shown in the Jaycoon
Ltd’s statement of financial position for inventory at 30 September 20X4?
A. £199,000
B. £203,000
C. £202,000
D. £200,000
41. The definition of an intangible asset comprises: (i) Identifiability; (ii) Control over a
resource; (iii) Existence of future benefits; (iv) Residual value
A. (i) and (ii)
B. (i) and (iii)
C. (i), (ii) and (iii)
D. (i), (ii), (iii) and (iv)
42. According to IAS 38 Intangible assets, intangible assets cannot be treated as having
an indefinite useful life.
A. True
B. False
43. Panda plc has an administration building which it no longer needs. On 1 July 20X9
Panda plc entered into an agreement to lease the building out to another company. The
building cost $500,000 on 1 January 20X0 and is being depreciated over 50 years, based
on the IAS 16 cost model. Panda plc applies the fair value model under IAS 40 Investment
property and the fair value of the building was judged to be $450,000 on 1 July 20X9. This
valuation had not changed at 31 December 20X9. What is the amount of the revaluation
surplus that will be recognised in respect of the building?
A. 35,000
B. 45,000
C. 55,000
D. 65,000
44. Which of the following shall a lessee recognise in profit or loss after the
commencement date?
A. Interest on the lease liability
B. Variable lease payments not included in the measurement of the lease liability in the period in
which the event or condition that triggers those payments occurs
C. Net investment in the lease
D. A and B
E. B and C
45. The financial statements of the Farren Company for the year ended 31 December
20X8 included a provision for restructuring of £7 million. At 31 December 20X9, £2 million
of the restructuring provision was no longer required. An additional provision of £2
million was needed for legal claims against the company. Under IAS 37, £2 million of the
restructuring provision no longer required is to be re-allocated to cover the legal claims.
A. True
B. False
46. Candy Plc is being sued by a customer for $2 million for breach of contract over a
cancelled order. Candy Plc has obtained legal opinion that there is a 20% chance that
Candy Plc will lose the case. The unrecoverable legal costs of defending the action are
estimated at $100,000. The case will not go to court until next year. What is the amount of
the provision that should be made by Candy Plc in accordance with IAS 37 Provisions,
contingent liabilities and contingent assets?
A. 100,000
B. 500,000
C. 400,000
D. 2,000,000
47. IFRS 3 Business Combinations outlines the accounting required when one business
combines with another, such as during an acquisition or merger. A business
combination is defined as when one or more entities (subsidiaries) gains some control of
another (the parent).
A. True
B. False
48. A contingent liability is not recognised in the statement of financial position
A. True
B. False
C. Câu trả lời thứ 3
49. The Huang Company has a non-current asset which had a carrying amount in the
financial statements of $18,000 at 31 December 20X9. Its tax written down value (the tax
base) at that date was $9,000. The tax rate is 30%. In accordance with IAS 12 Income
taxes, what is the deferred tax balance in respect of this asset at 31 December 20X9?
A. 2,700 asset
B. 2,700 liability
C. 9,00 asset
D. 9,000 liability
50. The Framework is a reporting standard.
A. True
B. False
51. Which ONE of the following terms best describes the amount of cash or cash
equivalents that could currently be obtained by selling an asset in an orderly disposal?
A. Fair value
B. Realisable value
C. Residual value
D. Value in use
52. Inventory should be valued at the lowest of cost, net realisable value and replacement
cost.
A. True
B. False
53. According to IAS 2 Inventories, which one of the following lists consists only of items
which may be included in the cost of inventories?
A. Supervisor's wages, carriage inwards, carriage outwards, raw materials
B. Raw materials, carriage inwards, costs of storage of finished goods, plant depreciation
C. Plant depreciation, carriage inwards, raw materials, Supervisor's wages

54. The closing inventory of Hooray Ltd amounted to £123,000 at cost at year end of 30
April 20X4. This total figure includes the following items: (1) 600 items which had cost
£25 each and normally sold for £40 each. These items were sold in May 20X4 for £25.
Selling expenses were £300. (2) 10 items which had been in inventory for many years and
which had been purchased for £50 each, sold in May 20X4 for £100 each with selling
expenses of £3 each. What amount should be shown in the Hooray Ltd’s statement of
financial position for inventory at 30 April 20X4?
A. £123,000
B. £122,000
C. £123,700
D. £122,700
55. Which one of the following terms best describes the removal of an asset from an
entity’s statement of financial position?
A. Write-off
B. Depreciation
C. Impairment
D. Derecognition
56. Candy Plc received an invoice on 31 March 20X9 for maintenance work done on one
of its machines. £21,000 of the cost is actually for a machine upgrade, which will improve
the machine’s efficiency. However, the accountant charged the whole amount of the
invoice to maintenance costs. This machine is depreciated at 20% per annum on a
straight-line basis, with a proportional charge in the years of acquisition and disposal.
Which amount will be understated in respect of Candy Plc’s profit for the year ended at
30 June 20X9?
A. £16,800
B. £21,000
C. £19,950
D. £19,600
57. Which of the following shall be accounted in accordance with IAS 38?
A. Motion picture films
B. Patents and copyrights
C. Manuscripts
D. All of the above
58. Intangible assets, expenditure during the development phase of a project may
sometimes be capitalised as an intangible asset.
A. True
B. False
59. Which of the following shall a lessee recognise at the commencement date?
A. A right-of use asset
B. A lease liability
C. Deferred income
D. A and B
E. B and C
60. If the carrying amount of the right-of-use asset is reduced to zero and there is a
further reduction in the measurement of the lease liability, a lessee __________.
A. Shall recognise any remaining amount of the remeasurement in other comprehensive income
B. Shall recognise any remaining amount of the remeasurement in revaluation reserve
C. Shall recognise any remaining amount of the remeasurement in profit or loss
D. Shall not recognise any remaining amount of the remeasurement
61. According to IAS 36, an asset is impaired if:
A. Its carrying amount equals the amount to be recovered through use (or sale) of the asset
B. If it has been damaged
C. Its carrying amount exceeds the amount to be recovered through use (or sale) of the asset
D. The amount to be recovered through use (or sale) of the asset exceeds its carrying amount
62. For each business combination, one of the combining entities shall be identified as
the __________.
A. Entity that has joint control
B. Controlling entity
C. Acquirer
D. Combined entity
63. Which is not a purpose of the Conceptual Framework?
A.Provide definitions of key terms and concepts
B.Provide specific guidelines for resolving situations not covered by existing accounting
standards
C.Assist accountants in selecting among alternative accounting and reporting methods
D.Assist IASB in the standard-setting process
64. According to the IASB Conceptual Framework, which TWO of the following
characteristics are described as fundamental qualitative characteristics that make the
information provided in financial statements useful to users?
A.Comparability
B.Understandability
C.Relevance
D.Faithful representation
65. How should import duties be dealt with when valuing inventories at the lower of cost
and net realisable value (NRV) according to IAS 2 Inventories?
A.Ignored
B.Deducted from cost
C.Deducted in arriving at NRV
D.Added to cost
66. Oysle Ltd is preparing its trial balance for the year ended 30 September 20X8. Total
purchases in the period were £490,850. Opening inventories were valued at £29,980 and
closing inventories were valued at £28,730. Which amount should appear as the cost of
sales in the trial balance?
A.£491,200
B.£492,200
C.£491,100
D.£492,100
67. The cost of goods manufactured by an entity cannot include overhead costs.
A.True
B.False
68. Under IAS 16, if the entity applies revaluation model, PPE are revaluated:
A.Every 3-5 years
B.When fair values change, or are expected to change
C.Annually
D.As request of the competent authorities

69. Happy Plc year end is 30 September 20X4. Happy Plc commenced the development
stage of a project to produce a new pharmaceutical drug on 1 January 20X4. Expenditure
of $40,000 per month was incurred until the project was completed on 30 June 20X4
when the drug went into immediate production. The directors became confident of the
project's success on 1 March 20X4. The drug has an estimated life span of five years;
time apportionment is used by Happy Plc where applicable. What amount will Happy Plc
charge to profit or loss for development costs, including any amortisation, for the year
ended 30 September 20X4?
A.$40,000
B.$8,000
C.$88,000
70. According to IAS 36, carrying amount is the amount at which an asset is recognised
__________.
A.After deducting any accumulated depreciation (amortisation)
B.After deducting accumulated impairment losses, if any
C.Before deducting accumulated impairment losses, if any
D.A and B
E.A and C
71. According to IAS 12 Income taxes, interest expense accrued but included in taxable
profit on a cash basis should be classified under deductible temporary differences.
A.True
B.False
72. According to IFRS 15 Revenue from contracts with customers, which of the following
factors is not taken into account when establishing the transaction price of a contract?
A.Financing components
B.Variable consideration in contract price
C.Non-cash consideration
D.Customer credit quality

73. The Conceptual Framework is intended to establish

A. GAAP
B. The meaning of "present fairly in accordance with GAAP"
C. The objectives and concepts for use in developing standards of financial accounting and
reporting
74. Which ONE of the following statements best describes the term 'going concern'?
A. When current liabilities of an entity exceed current assets
B. The ability of the entity to continue in operation for the foreseeable future
C. The potential to contribute to the flow of cash and cash equivalents to the entity
D. The expenses of an entity exceed its income
75. Which of the following shall be accounted in accordance with IAS 38?
A. Motion picture films
B. Patents and copyrights
C. Manuscripts
D. All of the above
76. Using the revaluation option, can fair values be estimated, if there is no market-based
evidence?
A. Yes, if the asset is specialised and rarely sold, by using an income, or a depreciated
replacement cost approach
B. Yes, if the asset is specialised and rarely sold, by using indexation
C. No
77. A contract is, or contains, a lease if the contract conveys the right __________ an
identified asset for a period of time in exchange for consideration.
A. To use
B. To control the use of
C. To obtain economic benefits from
D. To recognise depreciation changes of
78. According to IAS 36, which of the following is the best evidence of an asset's fair
value less costs to sell?
A. The carrying value of the asset
B. An asset that is traded in an active market
C. The price in a binding sale agreement
D. The disposal value of the asset in an arm’s length transaction
79. Which of the following does define the term “provision”?
A. A deferred liability
B. A liability of uncertain timing or amount
C. A contingent liability
D. A contractual liability

80. According to IAS 12 Income taxes, deferred tax assets are the amounts of income
taxes recoverable in future periods in respect of deductible permanent differences.”
A. True
B. False
81. IFRS 15 allows the recognition of revenue through the duration of a contract for
services if it has been demonstrated that the performance obligation is met over time.
A. Revenue to date divided by total contract revenue
B. Advances received to date as a percentage of the total amount receivable
C. Surveys of work performed
D. Machine hours worked to date
82. The Junior Company leased out a freehold building for 20 years with effect from 1
January 20X1. The economic life of the building is 40 years. As part of the negotiations
for the lease, Junior granted the tenant a rent-free period. Annual rentals of £1.6 million
are payable in advance on 1 January, commencing in 20X2. What income should Junior
recognise in profit or loss in the year ended 31 December 20X1, according to IFRS 16
Leases?
A. 1.52 million
B. 0
C. 1.44 million
D. 1.60 million