T7 Online Practice Questions and Answers

Which statement best describes the revalued amount of an asset?

A. Its fair value at the date of revaluation less accumulated impairment

B. Its fair value at the date of revaluation less accumulated depreciation

C. Its fair value, less retained earnings

D. Its fair value at the date of revaluation less accumulated depreciation and accumulated impairment

The International Accounting Standards Board (IASB) has given companies the option to use fair value as the basis for measurement of financial assets and liabilities. Which of the following best defines fair value?

A. A residual interest in the assets of the entity after deducting all its liabilities

B. Faithful representation of the amount paid for a given item

C. Amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm's length transaction

D. Quality of information that confirms users' earlier expectations

Defined contribution plans are an example of which kind of employee benefits?

A. Short-term benefits

B. Post-employment benefits

C. Termination benefits

D. Long-term benefits

Paid annual leave and paid sick leave are examples of which kind of employee benefits?

A. Short-term benefits

B. Post-employment benefits

C. Termination benefits

D. Long-term benefits

Which body has the sole responsibility for setting standards?

A. Standards Advisory Council (SAC)

B. International Accounting Standards Board (IASB)

C. International Financial Reporting Interpretations Committee (IFRIC)

D. Accounting Principles Board (APB)

Which of the following plans obliges an employer to pay a specified amount of benefits to the employee?

A. Post-employment plan

B. Defined contribution plan

C. Defined benefit plan

D. Bonus plan

Predictive value is an ingredient of which of the following fundamental characteristics of information?

A. Complete

B. Comparability

C. Relevance

D. Neutral

Company XYZ has a group of six employees who will be retiring in four years -- on the 31st of December. Each retiree will receive $125,000. Company XYZ's accountants must make provisions in their accounts for this. Calculate the present value of future payments based on a discount rate of 10%.

A. $512,250

B. $551,250

C. $515,500

D. $521,500

Neutral and complete are ingredients of which of the following fundamental characteristics of accounting information?

A. Faithful representation

B. Relevance

C. Predictive value

D. Comparability

Which of the following are ingredients of the fundamental characteristic of relevance?

A. Cost and materiality

B. Predictive value and confirmatory value

C. Relevance and faithful representation

D. Timeliness and understandability