RFJPIA-R12

2
ND
Annual Regional Convention 2008
QUIZ BEE PA1 !"A
EASY ROUND
1. Which ONE of the following statements best describes the term 'liability'?
A An excess of equity oer current assets
B !esources to meet financial commitments as they fall due
C "he residual interest in the assets of the entity after deducting all its liabilities
D A #resent obligation of the entity arising from #ast eents
Question 1 - D
"he correct answer is $A #resent obligation of the entity arising from #ast
eents$% as defined in #ara &'(b) of the Framework.
*. Are the following statements true or false% according to +A,1 Presentation offinancial
statements?
(1) -iidends #aid should be recognised in the statement of com#rehensie income.
(*) A loss on dis#osal of assets should be recognised in the statement of changes in
equity.
Statement (1) Statement (2)
A .alse .alse
B .alse "rue
C "rue .alse
D "rue "rue
Question 3 - A
A loss on dis#osal of assets is recognised in the statement of com#rehensie
income because +A,1/ Property, plant and equipment does not #ermit
otherwise (+A,1 #ara 00).
-iidends #aid are recognised in the statement of changes in equity (+A,1
#ara 11/).
2. "he Oa3es 4om#any has a loan due for re#ayment in six months' time% but Oa3es has
the o#tion to refinance for re#ayment two years later. Oa3es #lans to refinance this loan.
+n which section of its statement of financial #osition should this loan be #resented%
according to +A,1 Presentation of financial statements? (select one answer)
A 4urrent liabilities
B 4urrent assets
C Non5current liabilities
D Non5current assets
Question 12 - C
6ecause Oa3es both has the right to roll oer the loan beyond 1* months for
the end of the re#orting #eriod and intends to roll it oer% it should be
#resented as a non5current liability #er #ara 72 of +A,1.
&. Which "WO of the following should be ta3en into account when determining the cost of
inentories #er +A,* Inventories?
A ,torage costs of #art5finished goods
B "rade discounts
C !ecoerable #urchase taxes
D Administratie costs
Question 1 - A & B
"he correct answers are trade discounts (deduct these from #urchase costs)
and storage costs for #art5finished (but not finished) goods.
,ee +A,* #aras 11 and 1/.
8. Which ONE of the following statements best describes the carrying amount of an asset?
A "he cost (or an amount substituted for cost) of the asset less its residual alue
B "he amount at which the asset is recogni9ed in the statement of financial #osition after
deducting any accumulated de#reciation and accumulated im#airment losses
C "he higher of the asset's net selling #rice and its alue in use
D "he fair alue of the asset at the date of a realuation less any subsequent
accumulated
im#airment losses
Question 3 - B
"he correct answer is $"he amount : in the statement of financial #osition :
after accumulated de#reciation and : im#airment losses$.
+A,1/ #ara / defines the carrying amount.
/. Which ONE of the following statements best describes the term 'de#reciation'?
A "he systematic allocation of an asset's cost less residual alue oer its useful life
B "he remoal of an asset from an entity's statement of financial #osition
C "he amount by which the recoerable amount of an asset exceeds its carrying amount
D "he amount by which the carrying amount of an asset exceeds its recoerable amount
Question 5 - A
$"he systematic allocation of an asset's cost:$ is the correct answer.
,ee +A,1/ #ara / for definitions.
7. "he ;irror 4om#any classified a non5current asset accounted for under the cost model
as held for sale on 21 -ecember *1</. 6ecause no offers were receied at an
acce#table #rice% ;irror decided on 1 =uly *1<7 not to sell the asset% but to continue to
use it. +n accordance with +.!,8 Noncurrent assets !eld for sale and discontinued
operations% the asset should be measured on 1 =uly *1<7 at (select one answer)
A the lower of its carrying amount and its recoerable amount
B the higher of its carrying amount and its recoerable amount
C the lower of its carrying amount on the basis that it had neer been classified as held
for sale and its recoerable amount
D the higher of its carrying amount on the basis that it had neer been classified as held
for sale and its recoerable amount
Question 2 - C
+.!,8 #ara *7 in effect requires an entity ceasing to classify an asset as held
for sale to remeasure it as if it had neer been held for sale% sub>ect to an
im#airment test (the recoerable amount test) at that date.
0. A brand name that was acquired se#arately should initially be recogni9ed % according to
+A,20 Intan"i#le assets% at (select one answer)
A recoerable amount
B either cost or fair alue at the choice of the acquirer
C fair alue
D cost
Question 5 - D
+A,20 #ara *& states that an intangible asset should be recognised initially at
cost.
'. "he Naylor 4om#any has determined that it needs to recognise an im#airment loss on
each of two non5current assets? #lant and land. "he releant amounts are as follows@
Plant Land
Original cost 4A711%111 4A1%&11%111
Breious realuations Nil 4A&81%111
Existing carrying amount 4A711%111 4A1%081%111
+m#airment loss to be recognised in year 4A*11%111 4A211%111
According to +A,2/ Impairment of assets% how should each of the im#airment losses be
recognised?
Plant $and
A +n #rofit or loss +n #rofit or loss
B +n #rofit or loss +n other com#rehensie income
C +n other com#rehensie income +n #rofit or loss
D +n other com#rehensie income +n other com#rehensie income
Question - B
+A,2/ #aras /15/1 state that im#airment losses on assets that hae not been
realued are recognised in #rofit or loss. +m#airment losses on realued
assets are treated as a realuation decrease.
11. "he ,nowfinch 4om#any is closing one of its o#erating diisions% and the conditions for
ma3ing restructuring #roisions in +A,27 Provisions, contin"ent lia#ilities and contin"ent
assets hae been met. "he closure will ha##en in the first quarter of the next financial
year. At the current year end% the com#any has announced the formal #lan #ublicly and
is calculating the restructuring #roision. Which ONE of the following costs should be
included in the restructuring
#roision?
A !etraining staff continuing to be em#loyed
B !elocation costs relating to staff moing to other diisions
C 4ontractually required costs of retraining staff being made redundant from the diision
being closed
D .uture o#erating losses of the diision being closed u# to the date of closure
Question 5 - C
+A,27 #aras 0150* require #roisions to be made for costs necessarily
incurred by the restructuring% but not those relating to the future conduct of
the business.