1. [单选题]16 Which of the following statements about accounting concepts and conventions are correct?
(1) The entity concept requires that a business is treated as being separate from its owners. (2) The use of historical cost accounting tends to understate assets and profit when prices are rising. (3) The prudence concept means that the lowest possible values should be applied to income and assets and the highest possible values to expenses and liabilities. (4) The money measurement concept means that only assets capable of being reliably measured in monetary terms can be included in the balance sheet of a business.
A. 1 and 2
B. 2 and 3
C. 3 and 4
D. 1 and 4
2. [单选题]19 What is the company’s return on shareholders’ equity?
A. 15/40 = 37·5%
B. 20/100 = 20%
C. 15/100 = 15%
D. 20/150 = 13·3%
3. [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
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]25 What should the minority interest figure be in the group’s consolidated balance sheet at 31 December 2005?
A. $240,000
B. $80,000
C. $180,000
D. $140,000
