1. [单选题]17 A business income statement for the year ended 31 December 2004 showed a net profit of $83,600. It was later
found that $18,000 paid for the purchase of a motor van had been debited to motor expenses account. It is the company’s policy to depreciate motor vans at 25 per cent per year, with a full year’s charge in the year of acquisition. What would the net profit be after adjusting for this error?
A. $106,100
B. $70,100
C. $97,100
D. $101,600
2. [单选题]Faithful representation is a fundamental characteristic of useful information within the IASB’s Conceptual framework for financial reporting.
A. Which of the following accounting treatments correctly applies the principle of faithful representation?
B. Reporting a transaction based on its legal status rather than its economic substance
C. Excluding a subsidiary from consolidation because its activities are not compatible with those of the rest of the group
D. Recording the whole of the net proceeds from the issue of a loan note which is potentially convertible to equity shares as debt (liability)
E. Allocating part of the sales proceeds of a motor vehicle to interest received even though it was sold with 0% (interest free) finance
3. [单选题]The following information is relevant for questions 9 and 10
A. company’s draft financial statements for 2005 showed a profit of $630,000. However, the trial balance did not agree,
B. All four items
C. 3 and 4 only
D. 2 and 3 only
E. 1, 2 and 4 only
4. [单选题]20 IAS 2 Inventories defines the extent to which overheads are included in the cost of inventories of finished goods.
Which of the following statements about the IAS 2 requirements in this area are correct? 1 Finished goods inventories may be valued on the basis of labour and materials cost only, without including overheads. 2 Carriage inwards, but not carriage outwards, should be included in overheads when valuing inventories of finished goods. 3 Factory management costs should be included in fixed overheads allocated to inventories of finished goods.
A. All three statements are correct
B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only
5. [单选题]6 Ordan received a statement from one of its suppliers, Alta, showing a balance due of $3,980. The amount due
according to the payables ledger account of Alta in Ordan’s records was only $230. Comparison of the statement and the ledger account revealed the following differences: 1 A cheque sent by Ordan for $270 has not been allowed for in Alta’s statement. 2 Alta has not allowed for goods returned by Ordan $180. 3 Ordan made a contra entry, reducing the amount due to Alta by $3,200, for a balance due from Alta in Ordan’s receivables ledger. No such entry has been made in Alta’s records. What difference remains between the two companies’ records after adjusting for these items?
A. $460
B. $640
C. $6,500
D. $100
