Conceptual Framework Quiz Questions And Answers

To assist the International Accounting Standards Board to develop IFRS Standards.

To assist preparers of IFRS financial statements to develop consistent accounting policies when no IFRS Standard applies to a particular transaction or other event, or when a Standard allows a choice of accounting policy.

To assist all parties to understand and interpret IFRS Standards.

All of the above

True

False

True

False

No

Yes, the Board is not required to use the Conceptual Framework when developing Standards

Yes, but only from aspects of the Conceptual Framework and only if doing so is needed to meet the objective of financial reporting

True

False

Immediately after it is issued

For annual reporting periods beginning on or after 1 January 2020, with early application permitted.

Never - the Conceptual Framework is only used by the International Accounting Standards Board

Provide information to regulators

Support the entity's tax return

Meet the information needs of an entity's stakeholders.

Provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions relating to providing resources to the entity.

Employees, investors and trade union representatives

Existing and potential investors, lenders and other creditors

Lenders and other creditors and customers

Existing and potential investors, government agencies and the general public

True

False

Providing information needed to assess management's stewardship is identified as an additional objective of financial reporting, equal in prominence to providing financial information useful to users in making decisions relating to providing resources to the entity

Decisions relating to providing resources to the entity depend on users' assessment of the amount, timing and uncertainty of the prospects for future net cash inflows to the entity and on their assessment of management's stewardship

Providing information needed to assess stewardship is more important than providing information needed to assess the prospects for future cash inflows to the entity

Financial reports are not intended to provide information needed to assess stewardship

Comparability and relevance

Relevance and reliability

Relevance, reliability and comparability

Relevance and faithful representation

Comparability, relevance and faithful representation

Only predictive value

Only confirmative value

Both predictive and confirmatory value

Either predictive or confirmatory value, or both

True

False

Separate reporting entities

A partnership

A single reporting entity

A legal entity

True

False

A present obligation of the entity to transfer an economic resource as a result of past events

A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodyiong economic benefits

An amount the entity may have to pay after the end of the reporting period

None of the above

True

False

That an obligation is a duty or responsibility that an entity has no practical ability to avoid

That an obligation can arise from a duty or responsibility conditional on a future action that the entity itself may take, if the entity has no practical ability to avoid taking that action

That an obligation can arise from an entity’s customary practices, published policies or specific statements, if the entity has no practical ability to avoid those practices, policies or statements

All of the above

None of the above

Income

Profit or loss

Equity

Other comprehensive income

Capturing, for inclusion in the statement of financial position or the statement(s) of financial performance, an item that meets the definition of one of the elements of the financial statements—an asset, a liability, equity, income or expenses

Determining where an item should be presented in the financial statements

Sorting assets, liabilities, equity, income or expenses on the basis of shared characteristics

Adding together of assets, liabilities, equity, income or expenses that have shared characteristics

True

False

Uncertainty about whether an asset or liability exists

Low probability of an inflow or outflow of economic benefits

Other factors

All of the above

None of the above

For an asset, derecognition normally occurs when the entity loses control of all or part of the recognised asset

For a liability, derecognition normally occurs when the entity no longer has a present obligation for all or part of the recognised liability

Derecognition is the removal of all or part of a recognised asset or liability from an entity's statement of financial position

All of the above

True

False

The exercise of caution when making judgements under conditions of uncertainty

A bias towards understating assets or income and towards overstating liabilities or expenses

A preference towards the earlier recognition of expenses and liabilities than of income and assets

A mechanism for smoothing profits over time (understate profits in good years and overstate profits in bad years)

A form of accounting conservatism