1. Recognition of elements in Financial Statements Required Assess whether each

Question

1. Recognition of elements in Financial Statements Required Assess whether each of the following would be recognised in the financial statements: (a) A gift of cash received by a company (b) A payment of a dividend to sharebolders (c) An upwards revaluation of a building (d) Polution released into the sea, destroying marine life. No government fines exist for this in the country of operation. 2. Framework I Required )Explain and give an example of the effect on a set of published financial statements of a company, if the going concern convention is beld not to apply b) Explain in general terms what the LASB's Conceptual Framework for Financial Reporting c) Describe the advantages and disadvantages of offering companies the option of departing d) List the 5 elements of financial statements as defined in the LASB's Conceptual e) Identify and explain the 6 qualitative characteristics of useful financial information is trying to achieve from the detailed requirements of IFRS's in order to achieve a fair presentation Framework for Financial Reporting and explain the meaning of each. 3. Framework II MCQs 1) Which of the following characteristics of financial information contribute to faithful representation per the LASB's Conceptual Framework for Financial Reporting? 1. Noutrality 2. Freedom fun manal 4.Consistency A. All 4 characteristice B. 1, 2 3 only C. 1,2 and 4 only D. 3 and 4 only

Explanation / Answer

Question 1

a. A gift of cash received by the company would be recognized by the company as capital receipt.

b. dividend payment is recognized as distribution of profits

c. upward revaluation of building is recognized through revaluation reserve account.

d. pollution release is not recignized if it is not required by the law in the country and also no fines.

Question 3

1) A. all 4 characterestics

2) C. IFRS interpretation committee.

3) B. to eliminate alternative accounting treatments in accounts

4) A. 1

5) C.  comparability, verifiability, timeliness, understandability.

6) B. 1 and 5

7) Defina an Asset as a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

8) D. generally accepted accounting principles (practices)

9) C. IFRS Foundation Trustees

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