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Which of the following financial statements reports information as of a specific date? ()
A. income statementB. statement of owner's equityC. statement of cash flowsD. balance sheet
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16 Which of the following events between the balance sheet date and the date the financial statements areauthorised for issue must be adjusted in the financial statements?1 Declaration of equity dividends.2 Decline in market value of investments.3 The announcement of changes in tax rates.4 The announcement of a major restructuring.A 1A 1 onlyB 2 and 4C 3 onlyD None of them
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(b) Explain how the non-payment of contributions and the change in the pension benefits should be treated inthe financial statements of Savage for the year ended 31 October 2005. (4 marks)
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(ii) Explain the accounting treatment under IAS39 of the loan to Bromwich in the financial statements ofAmbush for the year ended 30 November 2005. (4 marks)
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(b) Describe with suitable calculations how the goodwill arising on the acquisition of Briars will be dealt with inthe group financial statements and how the loan to Briars should be treated in the financial statements ofBriars for the year ended 31 May 2006. (9 marks)
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(c) Wader is reviewing the accounting treatment of its buildings. The company uses the ‘revaluation model’ for itsbuildings. The buildings had originally cost $10 million on 1 June 2005 and had a useful economic life of20 years. They are being depreciated on a straight line basis to a nil residual value. The buildings were revalueddownwards on 31 May 2006 to $8 million which was the buildings’ recoverable amount. At 31 May 2007 thevalue of the buildings had risen to $11 million which is to be included in the financial statements. The companyis unsure how to treat the above events. (7 marks)Required:Discuss the accounting treatments of the above items in the financial statements for the year ended 31 May2007.Note: a discount rate of 5% should be used where necessary. Candidates should show suitable calculations wherenecessary.
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5 Financial statements have seen an increasing move towards the use of fair values in accounting. Advocates of ‘fairvalue accounting’ believe that fair value is the most relevant measure for financial reporting whilst others believe thathistorical cost provides a more useful measure.Issues have been raised over the reliability and measurement of fair values, and over the nature of the current levelof disclosure in financial statements in this area.Required:(a) Discuss the problems associated with the reliability and measurement of fair values and the nature of anyadditional disclosures which may be required if fair value accounting is to be used exclusively in corporatereporting. (13 marks)
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4 The transition to International Financial Reporting Standards (IFRSs) involves major change for companies as IFRSsintroduce significant changes in accounting practices that were often not required by national generally acceptedaccounting practice. It is important that the interpretation and application of IFRSs is consistent from country tocountry. IFRSs are partly based on rules, and partly on principles and management’s judgement. Judgement is morelikely to be better used when it is based on experience of IFRSs within a sound financial reporting infrastructure. It ishoped that national differences in accounting will be eliminated and financial statements will be consistent andcomparable worldwide.Required:(a) Discuss how the changes in accounting practices on transition to IFRSs and choice in the application ofindividual IFRSs could lead to inconsistency between the financial statements of companies. (17 marks)
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(b) Discuss how management’s judgement and the financial reporting infrastructure of a country can have asignificant impact on financial statements prepared under IFRS. (6 marks)Appropriateness and quality of discussion. (2 marks)
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(b) Discuss the relative costs to the preparer and benefits to the users of financial statements of increaseddisclosure of information in financial statements. (14 marks)Quality of discussion and reasoning. (2 marks)
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5 An enterprise has made a material change to an accounting policy in preparing its current financial statements.Which of the following disclosures are required by IAS 8 Accounting policies, changes in accounting estimatesand errors in these financial statements?1 The reasons for the change.2 The amount of the consequent adjustment in the current period and in comparative information for prior periods.3 An estimate of the effect of the change on future periods, where possible.A 1 and 2 onlyB 1 and 3 onlyC 2 and 3 onlyD All three items
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9 Which of the following items must be disclosed in a company’s published financial statements (including notes)if material, according to IAS1 Presentation of financial statements?1 Finance costs.2 Staff costs.3 Depreciation and amortisation expense.4 Movements on share capital.A 1 and 3 onlyB 1, 2 and 4 onlyC 2, 3 and 4 onlyD All four items
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12 Which of the following statements are correct?(1) Contingent assets are included as assets in financial statements if it is probable that they will arise.(2) Contingent liabilities must be provided for in financial statements if it is probable that they will arise.(3) Details of all adjusting events after the balance sheet date must be given in notes to the financial statements.(4) Material non-adjusting events are disclosed by note in the financial statements.A 1 and 2B 2 and 4C 3 and 4D 1 and 3
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(b) Seymour offers health-related information services through a wholly-owned subsidiary, Aragon Co. Goodwill of$1·8 million recognised on the purchase of Aragon in October 2004 is not amortised but included at cost in theconsolidated balance sheet. At 30 September 2006 Seymour’s investment in Aragon is shown at cost,$4·5 million, in its separate financial statements.Aragon’s draft financial statements for the year ended 30 September 2006 show a loss before taxation of$0·6 million (2005 – $0·5 million loss) and total assets of $4·9 million (2005 – $5·7 million). The notes toAragon’s financial statements disclose that they have been prepared on a going concern basis that assumes thatSeymour will continue to provide financial support. (7 marks)Required:For each of the above issues:(i) comment on the matters that you should consider; and(ii) state the audit evidence that you should expect to find,in undertaking your review of the audit working papers and financial statements of Seymour Co for the year ended30 September 2006.NOTE: The mark allocation is shown against each of the three issues.
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4 (a) The purpose of ISA 250 Consideration of Laws and Regulations in an Audit of Financial Statements is toestablish standards and provide guidance on the auditor’s responsibility to consider laws and regulations in anaudit of financial statements.Explain the auditor’s responsibilities for reporting non-compliance that comes to the auditor’s attentionduring the conduct of an audit. (5 marks)
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(c) With specific reference to Hugh Co, discuss the objective of a review engagement and contrast the level ofassurance provided with that provided in an audit of financial statements. (6 marks)
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3 (a) Financial statements often contain material balances recognised at fair value. For auditors, this leads to additionalaudit risk.Required:Discuss this statement. (7 marks)
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You are the manager responsible for performing hot reviews on audit files where there is a potential disagreementbetween your firm and the client regarding a material issue. You are reviewing the going concern section of the auditfile of Dexter Co, a client with considerable cash flow difficulties, and other, less significant operational indicators ofgoing concern problems. The working papers indicate that Dexter Co is currently trying to raise finance to fundoperating cash flows, and state that if the finance is not received, there is significant doubt over the going concernstatus of the company. The working papers conclude that the going concern assumption is appropriate, but it isrecommended that the financial statements should contain a note explaining the cash flow problems faced by thecompany, along with a description of the finance being sought, and an evaluation of the going concern status of thecompany. The directors do not wish to include the note in the financial statements.Required:(b) Consider and comment on the possible reasons why the directors of Dexter Co are reluctant to provide thenote to the financial statements. (5 marks)
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The finance director of Blod Co, Uma Thorton, has requested that your firm type the financial statements in the formto be presented to shareholders at the forthcoming company general meeting. Uma has also commented that theprevious auditors did not use a liability disclaimer in their audit report, and would like more information about the useof liability disclaimer paragraphs.Required:(b) Discuss the ethical issues raised by the request for your firm to type the financial statements of Blod Co.(3 marks)
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请根据短文内容判断给出的语句是否正确,正确的写“T”,错误的写“F”。An annual report of a company provides information about its business performance for certain people. These people include the investors, potential investors and other stakeholders. From the report, people can understand the companys business scope, recent situation and future development. The main parts of an annual report usually include chairmans letter, operation analysis and financial statements.·Chairmans LetterUsually, an annual report should contain a letter from the chairman. The letter should provide details about the successes and the challenges of the past year. It should also include the future outlook for the company.·Operation AnalysisThe operation analysis is an overview of the business in the past year. It usually includes new hires and new product introductions. At the same time, it will introduce business acquisitions and other important issues.·Financial StatementsThe financial statements are very important for an annual report. People can know the companys performance in the past from the statements. It usually three aspects. The first one is the profit and loss statement. The second one is the balance sheet. And the third one is the cash flow statement.( ) 26. An annual report of a company provides some information about its business performance for certain people.( ) 27. People can know everything of the company from the annual report.( ) 28. An annual report usually includes chairmans letter, financial statements and operation analysis.( ) 29. A chairmans letter should include the strategic direction moving forward.( ) 30. This passage is mainly about the main parts of an annual report.
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听力原文:M: The primary objective of financial reporting is to provide information useful for making investment and lending decisions.W: The information must be relevant, reliable, and comparable.Q: What is the primary objective of financial reporting?(15)A.To make investment.B.To record data.C.To provide useful information.D.To understand some basic accounting principles.
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The The financial statements are the means of conveying to management and to interested outsiders a concise picture of the profitability and financial position of a business.()
此题为判断题(对,错)。
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What is the stable-monetary-unit concept?A.It is the prime means of measuring assets.B.It is the common denominator in business transactions.C.It is an orderly basis for handling account balances to produce the financial statements.D.It is monetary terms in accounting information.
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Financial statements should be understandable to everyone.()
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Under certain circumstances, profits made on transactions between members of a group need to be eliminated from the consolidated financial statements under IFRS.Which of the following statements about intra-group profits in consolidated financial statements is/are correct?(i) The profit made by a parent on the sale of goods to a subsidiary is only realised when the subsidiary sells the goods to a third party(ii) Eliminating intra-group unrealised profits never affects non-controlling interests(iii) The profit element of goods supplied by the parent to an associate and held in year-end inventory must be eliminated in fullA.(i) onlyB.(i) and (ii)C.(ii) and (iii)D.(iii) only
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会计报表(Financial Statements)
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名词解释题会计报表(Financial Statements)