FRA Objective Tyoe questions

International Accounting Standards (IAS) have been developed by:
	The European Commission    The International Accounting Standards Committee    The International Organisation of Securities Commission (IOSCO)    The Financial Reporting Council    None of the above is correct

The body that has superseded the International Accounting Standards Committee is the:
	International Accounting Standards Commission    International Financial Reporting Board    International Financial Reporting Council    International Accounting Standards Board    None of the above is correct

According to the IASB Framework, the main purpose of financial reporting is to:
	Help the managers to run the business    Calculate taxable income    Enable investors to make economic decisions    Calculate prudently distributable profit    None of the above is correct

According to the IASB Framework:      Prudence overrides relevance    Relevance and reliability must be maximized, with a trade-off when they conflict    Relevance overrides reliability    Reliability overrides relevance    The relative importance of the characteristics in different cases is a matter of professional judgement

	The convention of consistency refers to consistent use of accounting principles:      Among enterprises belonging to different industries    Within industries    Across accounting periods    Throughout the accounting period    None of the above is correct

	The charging of depreciation expense over the life of an asset rather than the immediate full expensing of its costs is an example of:      Reliability    Prudence    Consistency    Matching    None of the above is correct

	Which of the following statements best describes the term 'going concern'?      The potential to contribute to the flow of cash and cash equivalents to the entity    The ability of the entity to continue in operation for the foreseeable future    When current assets less current liabilities become negative    The income less expenses of an entity are negative    None of the above is correct

	Which of the following statements is true of the qualitative characteristics of 'understandability' in relation to information in financial statements?      Users should be willing to study the information with reasonable diligence    Users are expected to have significant business knowledge    Financial statements should be free form material error    Financial statements should exclude complex matters    None of the above is correct

	Which of the following terms best describes information in financial statements that is neutral?      Reliable    Unbiased    Understandable    Relevant    None of the above is correct

	Which of the following terms best describes financial statements whose basis of accounting recognises transactions and other events when they occur?      Accrual basis of accounting    Going concern basis of accounting    Invoice basis of accounting    Cash basis of accounting    None of the above

	Which of the following is the best description of 'reliability' in relation to information in financial statements?      Freedom from material error    Comprehensibility to users    Influence on the economic decisions of users    Including a degree of caution    None of the above is correct

	Which of the following terms best describes information that influences the economic decisions of users?      Reliable    Understandable    Relevant    Prospective    None of the above is correct

	Which two of the following are listed in the IASB Framework as 'underlying assumptions' regarding financial statements?      Any changes of accounting policy are neutral    The enterprise can be viewed as a going concern    The financial statements are reliable    The financial statements are prepared under the accrual basis    None of the above is correct

	Financial statements include a balance sheet, an income statement and a statement of changes in equity. Which two of the following are also included within the financial statements?      A directors' report    A cash flow statement    Accounting policies    An auditor's report    None of the above is correct

	According to the IASB Framework, which two of the following characteristics are described as principal qualitative characteristics that make the information provided in financial statements useful to users?      Accrual    Understandability    Relevance    Going concern    None of the above is correct

	'A series of reports that are time-consuming and expensive to prepare is presented to the board of directors each month even though the reports are never used'. Which of the following qualitative characteristics or constraints is violated by this statement?      Prudence    Balance between benefit and cost    Comparability    Completeness    Materiality

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