Conceptual Framework: the quiz

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Name : Guest
Your Score : 6 out of 8 (75%)
Correct Answers : 6 Question
Incorrect Answers : 2 Question
Unanswered : 0 Question
Time Taken : 3 mins 5 secs
Your Result :

Your Answers

Correct Points earned: 1 out of 1

Q1) When developing requirements for IFRS Standards, can the International
Accounting Standards Board depart from the Conceptual Framework?
A. No
B. Yes, the Board is not required to use the Conceptual Framework when developing Standards
C. Yes, but only from aspects of the Conceptual Framework and only if doing so is needed to meet
the objective of financial reporting (Your Answer)(Correct)
Explanation:See paragraph SP1.3

Correct Points earned: 1 out of 1

Q2) How does the Conceptual Framework explain the role of stewardship?
A. 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
B. 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 (Your Answer)(Correct)
C. Providing information needed to assess stewardship is more important than providing information
 needed to assess the prospects for future cash inflows to the entity
D. Financial reports are not intended to provide information needed to assess stewardship
Explanation:See paragraph 1.3

Correct Points earned: 1 out of 1

Q3) The Conceptual Framework describes prudence as:

A. The exercise of caution when making judgements under conditions of uncertainty (Your
Answer)(Correct)
B. A bias towards understating assets or income and towards overstating liabilities or expenses
C. A preference towards the earlier recognition of expenses and liabilities than of income and assets
D. A mechanism for smoothing profits over time (understate profits in good years and overstate
profits in bad years)
E. A form of accounting conservatism
Explanation:See paragraph 2.16

Incorrect Points earned: 0 out of 1

Q4) What drives the determination of the boundary of a reporting entity that is not a
legal entity and does not comprise only legal entities all linked by a parent-
subsidiary relationship?
A. Management's choice
B. Legal form of the reporting entity
C. Information needs of the primary users of the reporting entity (Correct)
D. All of the above (Your Answer)(Incorrect)
E. None of the above
Explanation:See paragraph 3.14

Correct Points earned: 1 out of 1

Q5) For a right to meet the definition of an asset, it needs to be likely that the right will
produce economic benefits for the entity.
A. True
B. False (Your Answer)(Correct)
Explanation:See paragraph 4.14

Points earned: 0 out of 1

 Incorrect

Q6) Recognition is the process of:

A. 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 (Correct)
B. Determining where an item should be presented in the financial statements (Your
Answer)(Incorrect)
C. Sorting assets, liabilities, equity, income or expenses on the basis of shared characteristics
D. Adding together of assets, liabilities, equity, income or expenses that have shared characteristics
Explanation:See paragraph 5.1

Correct Points earned: 1 out of 1

Q7) Which measurement bases are categorised as current value measurement bases
in the Conceptual Framework?
A. Value in use
B. Fair value
C. Fulfilment value
D. Current cost
E. All of the above (Your Answer)(Correct)
Explanation:See paragraph 6.11

Correct Points earned: 1 out of 1

Q8) In principle, all income and expenses are included in the statement of profit or
loss.
A. True (Your Answer)(Correct)
B. False
Explanation:See paragraph 7.17

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