Correct answer: a
Learning Objective 1.7 ~ Explain the current standard-setting framework and the role of the professional accounting associations in the standard-setting process
A disclosing entity is an entity that:
a. discloses the basis on which their financial reports are prepared.
b. is exempt under the Corporations Act 2001 from applying the AASB accounting standards.
c. is involved in the accounting standard-setting process.
*d. issues securities that are quoted on a stock market or made available to the public via a prospectus.
Correct answer: d
Learning Objective 1.7 ~ Explain the current standard-setting framework and the role of the professional accounting associations in the standard-setting process
The first step in issuing an accounting standard is the:
*a. identification by interested parties of a relevant issue.
b. issue of an exposure draft inviting comment from interested parties.
c. consultation with stakeholders.
d. comprehensive research of the relevant issue.
Correct answer: a
Learning Objective 1.7 ~ Explain the current standard-setting framework and the role of the professional accounting associations in the standard-setting process
AASB accounting standards are legally enforceable in Australia under the:
a. Trade Practices Act 1974.
b. Income Tax Assessment Act 2007.
*c. Corporations Act 2001.
d. Australian Securities and Investments Commission.
Correct answer: c
Learning Objective 1.7 ~ Explain the current standard-setting framework and the role of the professional accounting associations in the standard-setting process
Which statement about the AASB Conceptual Framework is not true?
a. It establishes the objectives of the financial statements.
b. It sets out the fundamental and enhancing qualitative characteristics of financial reports.
*c. It applies to all entities producing special purpose financial statements.
d. It defines the elements of the financial statements.
Correct answer: c
Learning Objective 1.8 ~ Evaluate the role of the Conceptual Framework and illustrate the qualitative characteristics of financial statements
Under the Conceptual Framework the four enhancing qualitative characteristics for general purpose financial statements are:
a. reliability, timeliness, conservatism and understandability.
b. timeliness, comparability, uniqueness and reliability.
*c. timeliness, understandability, verifiability and comparability.
d. comparability, verifiability, timeliness and competition.
Correct answer: c
Learning Objective 1.8 ~ Evaluate the role of the Conceptual Framework and illustrate the qualitative characteristics of financial statements
Which of these entities is least likely to have users dependent on general purpose financial statements?
a. An international company operating in the Asia-Pacific region.
b. A company with a large number of shareholders.
c. A company listed on the stock exchange.
*d. A small company whose shareholders also run the business.
Correct answer: d
Learning Objective 1.8 ~ Evaluate the role of the Conceptual Framework and illustrate the qualitative characteristics of financial statements
Which of the following is not a cost associated with providing financial information?
Collecting.
Processing.
*c. Reviewing.
d. Disseminating.
Correct answer: c
Learning Objective 1.8 ~ Evaluate the role of the Conceptual Framework and illustrate the qualitative characteristics of financial statements
‘A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits’ is the definition of:
a. an expense.
*b. a liability.
c. equity.
d. an asset.
Correct answer: b
Learning Objective 1.8 ~ Evaluate the role of the Conceptual Framework and illustrate the qualitative characteristics of financial statements