Testbank

to accompany

Applying International
Accounting Standards
by
Alfredson, Leo, Picker, Pacter & Radford
Prepared by
Victoria Wise

John Wiley & Sons Australia, Ltd 2005

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CHAPTER 14 Presentation of financial statements

Question 1
The following items are normally classified as current when presented in a balance sheet:
A
B
C
D

contingent liabilities;
goodwill;
deferred tax assets;
prepayments.

Question 2
The balance sheet of a reporting entity presents a structured summary of the:
A
B
C
D

revenue and expenses arising during the reporting period;

assets, liabilities and equity at reporting date;
profits and losses not reported in income of the period;
receipts and payments of cash during the period.

Question 3
The profit or loss of a period and the other gains and losses recognised directly in equity are
presented in the:
A
B
C
D

balance sheet;
income statement;
cash flow statement;
statement of changes in equity.

Question 4
The profit or loss attributable to a minority interest is required, under IAS 1 Presentation of
Financial Statements, to be presented on the face of the:
A
B
C
D

cash flow statement;

balance sheet;
income statement;
statement of changes in equity.

Applying International Accounting Standards Chapter 14

-3Question 5
The following is no longer an allowable line item for presentation on the face of an income
statement:
A
B
C
D

extraordinary items;
finance costs;
pre-tax loss attributable to discontinuing operations;
tax expense.

Question 6
Which of the following classifications has been eliminated for the purposes of presenting
information on an income statement?
A
B
C
D

revenue;
abnormal items;
cost of sales;
other income.

Question 7
If the classification of expenses by function method is used for the presentation of an income
statement, additional information on the following items must be disclosed:
A
B
C
D

revenue;
gains on disposal of assets;
gains on revaluation of assets;
depreciation and amortisation expense.

Question 8
In relation to Retained earnings, IAS 1 Presentation of Financial Statements, mandates the
following disclosures:
I.
II.
III.
IV.

Any changes during the reporting period.

The related tax adjustments in respect to any changes during the period.
The beginning balance.
The balance at reporting date.
A
B
C

I, II, III and IV;

II, III and IV only;
I, III and IV only;

Applying International Accounting Standards Chapter 14

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III and IV only.

Question 9
Exchange difference relating to the translation of foreign operations into the currency of the
reporting entity, are disclosed in the:
A
B
C
D

income statement;
cash flow statement;
balance sheet;
statement of changes in equity.

Question 10
IAS 1 Presentation of Financial Statements requires disclosure in the balance sheet of the
following items:
A
B
C
D

a statement of compliance with IFRS;

the measurement basis used for the revaluation of assets;
the carrying amount of property, plant and equipment;
information about the key assumptions used in the depreciation of assets.

Question 11
The summary of accounting policies is normally presented:
A
B
C
D

before all of the financial statements in a financial report;

as the first note, after all the financial statements;
as the last note in a set of financial statements;
within the auditors report.

Question 12
IAS 1 Presentation of Financial Statements, requires the following note disclosures in relation to
dividends of an entity. The:
A
B
C
D

amount of any cumulative preference dividends not recognised;

names of the recipients of the dividends;
addresses of all shareholders who are entitled to receive the dividends;
a schedule of cumulative dividends paid in prior periods.

Applying International Accounting Standards Chapter 14

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ANSWERS
1

10

11

12

Applying International Accounting Standards Chapter 14