Question 1

Statement of financial position information is useful for all of the following except to

Accepted Answer

A)  compute rates of return
B)  analyze cash inflows and outflows for the period
C)  evaluate capital structure
D)  assess future cash flows

Question 2

On the statement of financial position the non-controlling interest account is reported as a long-term investment.

Accepted Answer

A) True 
 B)False

Question 3

Olmsted Company has the following items: share capital-ordinary, $920,000; treasury shares, $85,000; deferred taxes, $100,000 and retained earnings, $363,000.What amount should Olmsted Company report as total equity?

Accepted Answer

A)  $1,098,000.
B)  $1,198,000.
C)  $1,298,000.
D)  $1,398,000.

Question 4

One criticism not normally aimed at a statement of financial position prepared using current accounting and reporting standards is

Accepted Answer

A)  failure to reflect current value information.
B)  the extensive use of separate classifications.
C)  an extensive use of estimates.
D)  failure to include items of financial value that cannot be recorded objectively.

Question 5

IFRS requires that a complete set of financial statements be presented annually and that for comparative purposes, companies must include three complete sets of financial statements and related notes.

Accepted Answer

A) True 
 B)False

Question 6

Using IFRS, which of the following items is matched correctly with its basis of valuation for purposes of reporting on the statement of financial position?

Accepted Answer

A)  I and A
B)  II and C
C)  III and B
D)  II and B

Question 7

Financial flexibility is a company's ability to respond and adapt to financial adversity and unexpected needs and opportunities.

Accepted Answer

A) True 
 B)False

Question 8

The amount of time that is expected to elapse until an asset is realized or otherwise converted into cash is referred to as

Accepted Answer

A)  solvency.
B)  financial flexibility.
C)  liquidity.
D)  exchangeability.

Question 9

Preparing the statement of cash flows, using the indirect method, involves all of the following except determining the

Accepted Answer

A)  cash provided by operations.
B)  cash provided by or used in investing and financing activities.
C)  change in cash during the period.
D)  cash collections from customers during the period.

Question 10

IFRS requires specific note disclosures on inventories that are disaggregated into classifications such as merchandise, production supplies, work in process, and finished goods.

Accepted Answer

A) True 
 B)False

Question 11

Kohler Company owns the following investments:  Kohler will report securities in its long-term investments section of

Accepted Answer

A)  exactly £105,000.
B)  exactly £117,000.
C)  exactly £162,000.
D)  £102,000 or an amount less than £102,000, depending on the circumstances.

Question 12

In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should generally be classified as cash inflows from

Accepted Answer

A)  operating activities.
B)  financing activities.
C)  investing activities.
D)  selling activities.

Question 13

Lohmeyer Corporation reports:  What is Lohmeyer's ending cash balance?

Accepted Answer

A)  $330,000.
B)  $400,000.
C)  $550,000.
D)  $620,000.

Question 14

During 2015 the DLD Company had a net income of W200,000.In addition, selected accounts showed the following changes:  What was the amount of cash provided by operating activities?

Accepted Answer

A)  W198,000
B)  W200,000
C)  W206,000
D)  W238,000

Question 15

The equity section of an IFRS statement of financial position includes share capital, share premium, and retained earnings in that order.

Accepted Answer

A) True 
 B)False

Question 16

Treasury shares should be reported as a(n)

Accepted Answer

A)  current asset.
B)  investment.
C)  other asset.
D)  reduction of equity.

Question 17

Collection of a loan is reported as an investing activity in the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 18

Non-current liabilities include

Accepted Answer

A)  obligations not expected to be liquidated within the next year or operating cycle.
B)  obligations payable at some date beyond the next year or operating cycle.
C)  deferred income taxes and most lease obligations.
D)  All of these choices are correct.

Question 19

The statement of financial position

Accepted Answer

A)  Omits many items that are of financial value.
B)  Makes very limited use of judgments and estimates.
C)  Uses fair value for most assets and liabilities.
D)  All of the choices are correct regarding the statement of financial position.

Question 20

The basis for classifying assets as current or noncurrent is conversion to cash within

Accepted Answer

A)  the accounting cycle or one year, whichever is shorter.
B)  the operating cycle or one year, whichever is longer.
C)  the accounting cycle or one year, whichever is longer.
D)  the operating cycle or one year, whichever is shorter.

Exam 5: Statement of Financial Position and Statement of Cash Flows

IFRS requires that a complete set of financial statements be presented annually and that for comparative purposes, companies must include three complete sets of financial statements and related notes.

Correct AnswerverifiedShow Answer

On the statement of financial position the non-controlling interest account is reported as a long-term investment.

Correct AnswerverifiedShow Answer

In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should generally be classified as cash inflows from

Correct AnswerverifiedShow Answer

Lohmeyer Corporation reports: What is Lohmeyer's ending cash balance?

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The statement of financial position

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One criticism not normally aimed at a statement of financial position prepared using current accounting and reporting standards is

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During 2015 the DLD Company had a net income of W200,000.In addition, selected accounts showed the following changes: What was the amount of cash provided by operating activities?

Correct AnswerverifiedShow Answer

The equity section of an IFRS statement of financial position includes share capital, share premium, and retained earnings in that order.

Correct AnswerverifiedShow Answer

Using IFRS, which of the following items is matched correctly with its basis of valuation for purposes of reporting on the statement of financial position?

Correct AnswerverifiedShow Answer

Collection of a loan is reported as an investing activity in the statement of cash flows.

Correct AnswerverifiedShow Answer

IFRS requires specific note disclosures on inventories that are disaggregated into classifications such as merchandise, production supplies, work in process, and finished goods.

Correct AnswerverifiedShow Answer

The amount of time that is expected to elapse until an asset is realized or otherwise converted into cash is referred to as

Correct AnswerverifiedShow Answer

Statement of financial position information is useful for all of the following except to

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Treasury shares should be reported as a(n)

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Olmsted Company has the following items: share capital-ordinary, $920,000; treasury shares, $85,000; deferred taxes, $100,000 and retained earnings, $363,000.What amount should Olmsted Company report as total equity?

Correct AnswerverifiedShow Answer

Non-current liabilities include

Correct AnswerverifiedShow Answer

Kohler Company owns the following investments: Kohler will report securities in its long-term investments section of

Correct AnswerverifiedShow Answer

Preparing the statement of cash flows, using the indirect method, involves all of the following except determining the

Correct AnswerverifiedShow Answer

The basis for classifying assets as current or noncurrent is conversion to cash within

Correct AnswerverifiedShow Answer

Financial flexibility is a company's ability to respond and adapt to financial adversity and unexpected needs and opportunities.

Correct AnswerverifiedShow Answer

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