Financial Reporting And Analysis - Financial Reporting And Analysis Section 1

Avatto>>CFA Level 1>>PRACTICE QUESTIONS>>Financial Reporting And Analysis>>Financial Reporting And Analysis Section 1

11. The amount of cash that could be obtained by selling an asset in an orderly disposal is least likely known as:

  • Option : A
  • Explanation : Amortized value is based on the original cost and the amortization
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12. Which of the following is least likely to be presented on an accrual basis?

  • Option : A
  • Explanation : All financial statements should be presented on an accrual basis, except cash flow information.
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13. Which of the following is least likely a general feature underlying the creation of financial statements?

  • Option : C
  • Explanation : Fair presentation and going concern are features underlying the creation of financial statements. Minimum specified information on the face of financial statements falls under „Structure and Content‟, and not under „General Features.‟
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14. Which of the following is most likely represented as inflows of economic resources to a company under the IFRS framework?

  • Option : C
  • Explanation : The financial statement elements under International Financial Reporting Standards (IFRS) are: assets, liabilities, owners‟ equity, revenue, and expenses. Revenues are inflows of economic resources. Assets are economic resources, but not inflows.
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15. Under IFRS, which of the following is least likely one of the fundamental principles underlying the preparation of financial statements?

  • Option : C
  • Explanation : Based on International Accounting Standard (IAS), general requirements for financial statements, fundamental principles include fair presentation, going concern, accrual basis, consistency and materiality.
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