Question 1

Under the Corporations Act which of these is not necessarily a disclosing entity?
A) A public company
B) A corporation that raises funds via a prospectus
C) A borrowing corporation
D) A stock exchange listed company

Accepted Answer

The answer of Under the Corporations Act which of these...

Question 2

How many of these statements concerning concise financial reports are true?
$\bullet$There is a charge to the shareholder for requesting a full financial report but the concise report is free.
$\bullet$If a shareholder accepts a concise financial report they cannot also request a full report.
$\bullet$Must be drawn up in accordance with accounting standards.
$\bullet$The financial statements in the concise report need not comply with all the accounting standards.
A) 0
B) 1
C) 2
D) 3

Accepted Answer

The answer of How many of these statements concerning concise...

Question 3

According to AASB 1039, in order to provide clear information to shareholders, the concise financial report must disclose how many of the following?
$\bullet$Gross profit
$\bullet$Dividends per share
$\bullet$Earnings per share
$\bullet$The capitalisation ratio
$\bullet$Changes in accounting policies
A) 2
B) 3
C) 4
D) 5

Accepted Answer

AASB 1039 requires disclosure of gross profit, dividends per share, and earnings per share in the concise financial report. The capitalisation ratio and changes in accounting policies are not required to be disclosed in the concise financial report. Therefore, the best choice is B, as it includes the three required disclosures.

Question 4

What is the correct heading on a statement of profit or loss and other comprehensive income made up for a twelve month period to 30 June 2016?
A) As at 30 June 2016
B) For the year ended 30 June 2016
C) For the period ended 30 June 2016
D) 30th June 2016

Accepted Answer

The correct heading for a statement of profit or loss and other comprehensive income for a twelve month period is "For the year ended 30 June 2016". This clearly indicates that the statement covers the entire fiscal year from July 1, 2015 to June 30, 2016.

Question 5

As set out in IAS 1/AASB 101, all of these are general requirements that apply to annual reports except:
A) There must be a description of the entity's operations and its principal activities.
B) Comparative figures for the previous reporting period must be disclosed.
C) The reporting date or period covered by each financial statement must be included.
D) A list of all the accounting standards followed must be included.

Accepted Answer

While IAS 1/AASB 101 requires many general requirements for annual reports, including a description of the entity's operations, disclosure of comparative figures, and inclusion of reporting dates, it does not require a list of all the accounting standards followed. However, the financial statements should disclose compliance with IFRSs/AASBs.

Question 6

How many of these are areas where there are major differences in accounting treatment by sole traders and partnerships and accounting treatment by companies?
$\bullet$Distributions to owners
$\bullet$Accumulation of profits
$\bullet$Accounting for income tax
$\bullet$Accounting for equity
$\bullet$Accounting for GST
$\bullet$Accounting for inventory
A) 3
B) 4
C) 5
D) 6

Accepted Answer

There are major differences in accounting treatment for distributions to owners, accumulation of profits, accounting for income tax, and accounting for equity between sole traders/partnerships and companies. Accounting for GST and inventory have similar treatments for both types of entities. Therefore, the answer is 4 (B).

Question 7

An interim report required to be prepared by a disclosing entity under IAS 34/AASB 134 Interim Financial Reporting is defined as a report for:
A) each three months.
B) each half-year.
C) a period shorter than a full reporting period.
D) nine months.

Accepted Answer

The answer of An interim report required to be prepared...

Question 8

It is proposed that how many of the following entities would be classed as belonging to Tier 2 under AASB 1053 Application of Tiers of Australian Accounting Standards, and thus be given relief from some reporting requirements?
$\bullet$Not-for-profit private sector entities
$\bullet$Most public sector entities
$\bullet$Small proprietary companies
A) 0
B) 1
C) 2
D) 3

Accepted Answer

Under AASB 1053 Application of Tiers of Australian Accounting Standards, all three entities listed - not-for-profit private sector entities, most public sector entities, and small proprietary companies - can be classified as belonging to Tier 2. This classification provides them with relief from certain full reporting requirements, aiming to reduce the financial reporting burden on these smaller or less economically significant entities.

Question 9

Which statement concerning AASB1053 is true?
A) All entities would be classified as Tier 1, Tier 2 or Tier 3.
B) It is sometimes referred to as the reduced disclosure requirements standard.
C) Entities classed as Tier 3 will have their financial disclosure requirements increased.
D) The standard does not apply to not-for-profit private sector entities and most public sector entities.

Accepted Answer

AASB1053 is sometimes referred to as the reduced disclosure requirements standard, as it provides entities with the option to comply with reduced disclosure requirements based on their tier classification. The other statements are incorrect as entities can also be classified as Tier 4, there is no requirement for Tier 3 entities to increase their financial disclosure requirements, and the standard applies to most entities, including not-for-profit private sector and public sector entities.

Question 10

The overall criteria for financial reporting contained in the Corporations Act is:
A) beyond a reasonable doubt.
B) materiality.
C) probable.
D) true and fair.

Accepted Answer

The best choice is D, true and fair, as it is the overall criteria for financial reporting contained in the Corporations Act. The financial reports must present the information in a true and fair view to assist users in making informed economic decisions. Materiality is an important concept in accounting, but it is not the overall criteria for financial reporting in the Corporations Act. Beyond a reasonable doubt and probable are legal terms that do not apply to financial reporting criteria.

Question 11

Under the Corporations Act it is not true that for the presentation of general purpose financial statements the annual financial report:
A) must include a directors' report.
B) must include a set of financial statements.
C) must include a concise report.
D) must include a directors' declaration.

Accepted Answer

The Corporations Act requires the annual financial report to include a directors' report, a set of financial statements, and a directors' declaration. However, there is no requirement for the report to include a concise report.

Question 12

An entity defined as a 'disclosing entity' under the Corporations Act must prepare interim financial reports. The content of an interim financial report, under IAS 34/ AASB 134, must include, as a minimum:
A) a condensed statement of financial position, a condensed statement of comprehensive income and selected notes.
B) a condensed statement of financial position, a condensed statement of profit or loss and other comprehensive income, and a condensed statement of changes in equity.
C) a condensed statement of financial position, a condensed statement of profit or loss and other comprehensive income, a condensed statement of changes in equity, a condensed statement of cash flows and selected notes.
D) a condensed statement of financial position, a condensed statement of profit or loss, a condensed statement of cash flows and selected notes.

Accepted Answer

IAS 34 / AASB 134 requires an interim financial report to include, at a minimum, a condensed statement of financial position, a condensed statement of profit or loss and other comprehensive income, a condensed statement of changes in equity, a condensed statement of cash flows, and selected explanatory notes.

Question 13

According to AASB 1039, in order to provide clear information to shareholders the concise financial report must disclose how many of the following?
$\bullet$Details of any events occurring after the end of the reporting period
$\bullet$That the report is an extract only from the full financial report
$\bullet$The amount of dividends paid and dividends proposed
$\bullet$Graphs of profits for the last five years
A) 1
B) 2
C) 3
D) 4

Accepted Answer

The concise financial report must disclose details of any events occurring after the end of the reporting period, that the report is an extract only from the full financial report, and the amount of dividends paid and dividends proposed. These disclosures ensure transparency and provide shareholders with essential information. Graphs of profits for the last five years are not a mandatory requirement.

Question 14

Under AASB 1039 and the Corporations Act which of these does not have to be included in a concise financial report?
A) Statement of cash flows
B) Statement of changes in equity
C) Notes to the financial statements
D) Directors' report

Accepted Answer

According to AASB 1039 and the Corporations Act, a concise financial report is exempted from including the statement of cash flows and the statement of changes in equity. However, the notes to the financial statements and the directors' report are still required to be included in a concise financial report.

Question 15

Which statement about concise financial reports is true?
A) The company has the right to send a concise report to the shareholder unless they request a full report.
B) Concise reports do not have to include a statement of changes in equity.
C) A full report must be sent to the shareholder unless they request a concise report.
D) The company must apply to ASIC if they want the right to issue concise reports rather than full reports.

Accepted Answer

According to ASIC regulations, a company can choose to send a concise report to shareholders unless they request a full report. This means that shareholders must specifically request a full report if they want one, otherwise they will receive the concise report. Choice B is incorrect as a statement of changes in equity is a required component of both concise and full financial reports. Choice C is incorrect as sending a full report is not mandatory unless specifically requested. Choice D is incorrect as a company does not need to apply to ASIC to issue concise reports, but they must comply with ASIC regulations and guidelines on what must be included in a concise report.

Question 16

Which statement is not true?
A) AASB 1039 Concise Financial Reports has an equivalent international standard.
B) Shareholders who receive a concise report can request a full report.
C) The concise report must comply with the accounting standards.
D) Except for concise reports prepared for listed companies each financial statement must be accompanied by some discussion and analysis.

Accepted Answer

AASB 1039 Concise Financial Reports does not have an equivalent international standard. The other statements are true regarding the provision and requirements for concise financial reports.

Question 17

Under the Corporations Act 2001, the financial statements included in the annual report are specified as:
A) a balance sheet, profit and loss statement, statement of cash flows and note 1 to the statements.
B) those required by the accounting standards.
C) a balance sheet, profit and loss statement, statement of cash flows and a director's report.
D) a balance sheet, profit and loss statement, statement of cash flows, director's report, an audit report and a statement of comprehensive income.

Accepted Answer

The Corporations Act 2001 specifies that the financial statements included in the annual report are those required by the accounting standards, which may vary over time and across different types of entities.

Question 18

In the accompanying commentary to the current version of IAS 1/AASB 101, what is the recommended title for the balance sheet?
A) Balance sheet
B) Statement of assets and liabilities
C) Statement of financial position
D) Statement of changes in equity

Accepted Answer

The accompanying commentary to IAS 1/AASB 101 recommends that the balance sheet be titled 'Statement of financial position'.

Question 19

Accounting standard AASB 1053 Application of Tiers of Australian Accounting Standards will become mandatory from:
A) 2011.
B) 2012.
C) 2013.
D) 2014.

Accepted Answer

The answer of Accounting standard AASB 1053 Application of Tiers...

Question 20

The accounting standard that contains the specific requirements for concise financial reports is:
A) AASB 1001.
B) AASB 1039.
C) IAS 1/AASB 101.
D) IAS 34/AASB 134.

Accepted Answer

AASB 1039 is the accounting standard that specifically addresses concise financial reports in Australia.

Quiz 23: Presentation of Financial Statements

Under the Corporations Act which of these is not necessarily a disclosing entity?

What is the correct heading on a statement of profit or loss and other comprehensive income made up for a twelve month period to 30 June 2016?

As set out in IAS 1/AASB 101, all of these are general requirements that apply to annual reports except:

An interim report required to be prepared by a disclosing entity under IAS 34/AASB 134 Interim Financial Reporting is defined as a report for:

Which statement concerning AASB1053 is true?

The overall criteria for financial reporting contained in the Corporations Act is:

Under the Corporations Act it is not true that for the presentation of general purpose financial statements the annual financial report:

An entity defined as a 'disclosing entity' under the Corporations Act must prepare interim financial reports. The content of an interim financial report, under IAS 34/ AASB 134, must include, as a minimum:

Under AASB 1039 and the Corporations Act which of these does not have to be included in a concise financial report?

Which statement about concise financial reports is true?

Which statement is not true?

Under the Corporations Act 2001, the financial statements included in the annual report are specified as:

In the accompanying commentary to the current version of IAS 1/AASB 101, what is the recommended title for the balance sheet?

Accounting standard AASB 1053 Application of Tiers of Australian Accounting Standards will become mandatory from:

The accounting standard that contains the specific requirements for concise financial reports is: