CHAPTER 2
1. IFRS applies to which type of entities?
A. Governmental entities
B. Profit-oriented entities
C. Not-for-profit entities
D. All of the above
2. Which of the following is not included in financial statements?
A. Statement of financial position
B. Statement of comprehensive income
C. Accounting standards and notes from management
D. Statement of changes in equity
3. Which of the following statements is correct?
A. IFRS issued by the IASB currently consist of eleven standards issued since the
formation of the IASB in 2001.
B. IAS issued by the IASC from its beginning in 1971 that have not been superseded by
the IFRS. Currently of the original forty-one IAS, ten are still in effect.
C. Financial statements can be described as complying with IFRS as long as they
comply with two out of the whole requirements of IFRS.
D. Interpretations originated by the IFRIC or its predecessor, the SIC. Currently, sixteen
IFRIC and eleven SIC are still in effect.
4. Which of the following is not a component of the Conceptual Framework for
Financial Reporting?
A. Objective of general purpose financial statements
B. Presentation and disclosure
C. Legitimacy and rationality
D. Recognition and measurement
5. Which following components in the Framework overrides specific standards?
A. Objective of general purpose financial statements
B. Qualitative characteristics
C. Recognition and measurement
D. Presentation and disclosure
E. None of the above
6. Financial statements are directed towards the informational needs of the following
capital providers except:
A. current investors
B. potential investors
C. creditors and other lenders
D. regulators, employees, and taxing authorities
7. Of the following, what information is not provided by reporting entities in their
financial statements?
A. Economic resources
B. Claims against the reporting entity
C. The effects of transactions
D. Projections of future financial information
8. Which of the following values related to relevance do financial information have?
A. Predictive value
B. Confirmative value
C. Materiality
D. All of the above
9. Which following characteristics would a perfectly faithful representation have?
A. Completeness
B. Neutrality
C. Free from error
D. All of the above
10. Which of the following enhance qualitative characteristics of a financial report?
A. Comparability
B. Verifiability
C. Timeliness
D. Understandability
E. All of the above
11. Which of the following statements about fair value is not correct?
A. Fair values are relevant because they reflect conditions relating to economic resources
and obligations, under which financial statement users will make decisions
B. Fair values are neutral because they are unbiased
C. Fair values have predictive value because they help predict future cash flows of
interest to investors in valuing equity
D. Fair values are not consistently applied because they reflect the same type of
information every period
12. Which of the following is not included in the income statement?
A. Finance costs
B. Share of profit and loss from equity method
C. Extraordinary operations
D. Tax expense
13. Does IFRS allow for the presentation of extraordinary items or gains and losses as a
assets/liabilities under current assets and current liabilities?
A. Yes, Yes
B. Yes, No
C. No, Yes
D. No, No
14. hows the following categories:
A. Profit (or loss)
B. List of items of comprehensive income
C. Total comprehensive income
D. All of the above
15. Does IFRS include non-cash investing and financing activities in the statement of
cash flows?
A. Yes
B. No
16. Where a
A. Operating Activities
B. Investing Activities
C. Financing Activities
