EMT Practice Test

1. Question Content...

---

Question1: The International Accounting Standards Board (IASB) has given companies the option to use fair value as the basis for measurement of financial assets and liabilities. Which of the following best defines fair value?

Question2: Employee benefits that are expected to be settled wholly before twelve months after the end of the annual reporting people in which the employee rendered the related service are considered what kind of benefits?

Question3: Which statement best describes the revalued amount of an asset?

Question4: What are balanced sheets and income statements linked by?

Question5: Identify the characteristic being employed when companies in the same industry are using the same accounting principles.

Question6: IAS 19 classifies employee benefits into four main categories. Which of the following best represent those categories?

Question7: What is the difference between the present value of defined benefit obligation and fair value of plan assets at the end of the reporting period called?

Question8: When does a present obligation exist?

Question9: To estimate how much the employees have earned for their work in the current and prior periods in order to attribute the benefit to the periods of service and to incorporate estimates about demographics and financial variables into calculations, a company must utilize what method?

Question10: Which fundamental qualitative characteristics make accounting information useful for decision-making?

Question11: Which statement below most accurately describes a primary purpose of the International Accounting Standards Committee (IASC) Foundation?

Question12: What is one of the purposes of International Accounting Standards Board (IASB)'s conceptual framework, which establishes the concepts that underlie financial reporting?

Question13: Why is faithful representation important in accounting documentation?

Question14: Defined contribution plans are an example of which kind of employee benefits?

Question15: What is the purpose of an income statement?

Question16: Which of the following is true of liabilities?

Question17: What is one of the primary purposes of the International Accounting Standards Board (IASB)?

Question18: In a defined contribution benefit plan, who assumes risk?

Question19: Level 2 of the conceptual framework of International Accounting Standards Board (IASB) identifies qualitative characteristics of accounting information. These characteristics distinguish more useful information from less useful information. To what end is this distinction useful?

Question20: Predictive value is an ingredient of which of the following fundamental characteristics of information?

Question21: Neutral and complete are ingredients of which of the following fundamental characteristics of accounting information?

Question22: Which of the following should be used when discounting a benefit in order to determine the present value of the defined benefit obligation and the current service cost?

Question23: Which characteristic requires a high degree of consensus among individuals on a given measurement?

Question24: What is the purpose of a statement of cash flow?

Question25: What are the usual and customary costs that a company incurs to support its main business called?

Question26: Employee benefits that are payable after the completion of employment are considered what kind of benefits?

Question27: Which of the following is the best description of liquidity?

Question28: Which statement below most accurately describes a primary purpose of the Standards Advisory Council (SAC)?

Question29: What is the reconciliation of the beginning and ending balances of stockholders' equity accounts called?

Question30: Issuance of interim reports is an example of what enhancing characteristic?

Question31: Which of the following is true of accrual accounting?

Question32: When a company provides information that is of sufficient importance to influence the judgment and decisions of an informed user, which principle of Level 3 of the conceptual framework is being represented?

Question33: Which of the following describes the concerns of Level 3 of the conceptual framework for financial reporting?

Question34: Company XYZ does not disclose any information in the notes to their financial statements unless the value of the information to users exceeds the expense of gathering it. Which constraint of Level 3 of the conceptual framework does this represent?

Question35: Profit-sharing and bonuses are an example of which kind of employee benefits?

Question36: Which of the following is a disadvantage of reporting assets at historical cost?

Question37: What is the timing of revenue recognition?

Question38: Why is accounting for short-term employee benefits generally a straightforward process?

Question39: Which of the following are ingredients of the fundamental qualitative characteristics of faithful representation?

Question40: Which of the following best defines the term "liability"?

Question41: What are the expenses related to a company's financing and investing activities called?

Question42: What are the two guiding principles of accrual accounting?

Question43: Which of the following are ingredients of the fundamental characteristic of relevance?

Question44: The following requirements are characteristic of which term below? Must be reported on the balance sheet; must be owned or controlled by the company; and must possess expected future benefits.

Question45: The profit-sharing plan of Company ABC requires the company pay a specified proportion of its profit for the year to employees who serve throughout the year. If no employees leave during the year, the total profit-sharing payments for the year will be 3% of profit. The company estimates that staff turnover will reduce the payments to 2.5% of profit. What does Company ABC recognize as a liability and an expense?

Question46: Why is accounting for defined benefits plans one of the most complex issues in International Financial Reporting Standards?

Question47: Level 3 of the conceptual framework for financial reporting includes five basic assumptions. Which of the following describes the basic assumption of economic entity?

Question48: Company XYZ outsourced its printing services to a specialist printing firm. The specialist firm took responsibility for the staff, though the team remains on Company XYZ's premises. Which of the following is true?

Question49: Which of the following plans obliges an employer to pay a specified amount of benefits to the employee?

Question50: Which of the following best defines the term "asset"?

Question51: Which of the following most accurately describes the overall objective of financial reporting?

Question52: What is the sum of current and noncurrent liabilities called?

Question53: Current assets comprise assets that can be converted to cash. They must be converted within what time period?