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Testbank

to accompany

Financial accounting

10^th edition

by

Hoggett et al.

© John Wiley & Sons Australia, Ltd 2018

Chapter 17: Presentation of Financial Statements

Multiple-choice questions

1. Under the Corporations Act 2001 a set of financial statements to be included in the annual financial report are:

a. a balance sheet, profit and loss statement and statement of cash flows.

b. a balance sheet, profit and loss statement, statement of cash flows and a director’s report.

c. a balance sheet, profit and loss statement, statement of cash flows, director’s report and an audit report.

d. those specified in the accounting standards.

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

2. In the current version of IAS 1/AASB 101 Presentation of Financial Statements, what is an acceptable alternative title for the statement of financial position?

a. Profit and loss statement

b. Income statement

c. Balance sheet

d. Financial statement

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

3. Which statement concerning AASB 1053 Application of Tiers of Australian Accounting Standards is not true?

a. Entities classed as Tier 1 will have their financial disclosure requirements increased.

b. Entities classed as Tier 2 will have their financial disclosure requirements in relation to the accounting standards reduced.

c. The reporting burden on the majority of disclosing Australian entities is reduced.

d. In effect only publicly accountable entities will be required to report using full Australian accounting standards.

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

4. As set out in IAS 1/AASB 101 there is a general requirement that the financial statements must provide comparative and corresponding financial disclosures for:

a. the previous three years.

b. the previous five years.

c. the previous financial year.

d. the previous reporting period.

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

5. The accounting standard that specifies the correct presentation of financial statements is:

a. AASB 1004.

b. AASB 1039.

c. IAS 1/AASB 101.

d. IAS 20/AASB 120.

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

6. The Corporations Act requires the financial statements and notes to provide information that is:

a. true and fair.

b. materiality.

c. beyond a reasonable doubt.

d. the balance of probabilities.

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

7. The major difference between the financial statements of a company and those of a sole trader or partnership is with:

a. assets.

b. liabilities.

c. equity.

d. liabilities and assets.

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

8. Which of the following are general reporting requirements for companies required under IAS 1/AASB 101?

1. The domicile and legal form of the entity
2. Description of the entity’s principal activities
3. The country of incorporation
4. The name of the ultimate parent entity
5. The address of the registered office

a. I, II, IV and V only

b. II, III and IV only

c. III, IV and V only

d. I, II, III, IV and V

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

9. Which of the following is not required by the Corporations Act to be included in the annual financial report of a company?

a. A directors’ report

b. A five-year summary

c. A directors’ declaration

d. Summary of significant accounting policies

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

10. An income statement prepared for internal use would normally disclose expense and revenue items than one prepared for external use.

a. more

b. less

c. the same

d. varied

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

11. The period of time represented by a concise financial report is:

a. three months.

b. six months.

c. nine months.

d. full financial year.

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

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

a. Directors report

b. Notes to the financial statements

c. Statement of changes in equity

d. A copy of any qualification in the auditor’s report

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

13. AASB 1039 specifies the minimum contents required for:

a. a disclosing entity.

b. interim financial reports.

c. concise financial reports.

d. a statement of changes in equity.

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

14. Under AASB 1039 and the Corporations Act which of the following must be included in a concise financial report?

1. Sales revenue
2. Dividends paid and declared
3. Details of significant new events arising after reporting date

a. None

b. I and II only

c. II and III only

d. I, II and III

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

15. IAS 34/AASB 134 Interim Financial Reporting specifies that an interim report required to be prepared by a disclosing entity is for:

a. each quarter-year.

b. each half-year.

c. nine months.

d. a period shorter than a full reporting period.

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

16. An interim financial report prepared by a disclosing entity is required to include which of the following statements?

1. Condensed statement of cash flows
2. Condensed statement of changes in equity
3. Condensed statement of financial position
4. Condensed statement of profit or loss and other comprehensive income

a. II, III and IV only

b. III and IV only

c. I and II only

d. I, II, III and IV

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

17. Which of the following is not one of the general reporting requirements of IAS 1/AASB 101 as it applies to Australia?

a. The reports must be in English.

b. The level of rounding used in presenting the amounts.

c. Comparative information for the preceding reporting period.

d. The name and address of each shareholder must be disclosed.

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

18. Under the Corporations Act, a ‘disclosing entity’ must prepare a half-yearly financial report in addition to an annual report. Which of the following are ‘disclosing entities’?

1. A borrowing corporation
2. A company listed on the securities exchange
3. A company raising funds through a prospectus

a. I, II and III

b. I and III only

c. II and III only

d. None

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

19. IAS 1/AASB 101 is titled:

a. General Purpose Financial Reports.

b. Presentation of Financial Statements.

c. Information to be disclosed in Financial Reports.

d. Disclosure of Financial Performance and Position.

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

20. IAS 1/AASB 101 specifies that a complete set of financial statements comprises which of the following?

1. Statement of cash flows
2. Statement of changes in equity
3. Statement of financial position
4. Statement of profit or loss and other comprehensive income
5. Notes comprising a summary of accounting policies and other explanatory information.

a. I, II, III and IV only

b. II, III and IV only

c. I, II, III, IV and IV

d. III, IV and V only

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

21. The Corporations Act 2001 requires the annual report to include the financial statements that 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.

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

22. The Corporations Act requires the presentation of general purpose financial statements to include the following in the annual financial report except for:

a. a concise report.

b. a directors’ report.

c. a directors’ declaration.

d. a set of financial statements.

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

23. The specific requirements for concise financial reports are detailed in which accounting standard?

a. AASB 1001.

b. AASB 1039.

c. IAS 1/AASB 101.

d. IAS 34/AASB 134.

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

24. Which of the following statements is incorrect?

a. The concise report must comply with the accounting standards.

b. Shareholders who receive a concise report can request a full report.

c. AASB 1039 Concise Financial Reports has an equivalent international standard.

d. Except for concise reports prepared for listed companies each financial statement must be accompanied by some discussion and analysis.

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

25. According to AASB 1039, in order to provide clear information to shareholders, the concise financial report must disclose which of the following?

1. Gross profit
2. Dividends per share
3. Earnings per share
4. The capitalisation ratio
5. Changes in accounting policies

a. I, II and III

b. II, III and V

c. III and IV

d. II and V

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

26. The current version of IAS 1/AASB 101 allows which alternative title for the statement of profit or loss and other comprehensive income for the period?

a. Income statement

b. Profit or loss

c. Statement of financial position

d. Statement of assets and liabilities

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

27. Accounting standard AASB 1053 Application of Tiers of Australian Accounting Standards became mandatory in:

a. 2010.

b. 2014.

c. 2015.

d. 2016.

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

28. Which of the following areas have a major difference in accounting treatment by sole traders and partnerships and accounting treatment by companies?

1. Accounting for GST
2. Accounting for equity
3. Distributions to owners
4. Accumulation of profits
5. Accounting for inventory
6. Accounting for income tax

a. I, IV and V

b. I, II and III

c. II, III, IV and VI

d. III, V and VI

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

29. Which of the following entities would be classified as Tier 2 under AASB 1053 Application of Tiers of Australian Accounting Standards, and thus be given relief from some reporting requirements?

• 1. Not-for-profit private sector entities
  2. Most public sector entities
  3. Small proprietary companies

a. II and III only

b. I and II only

c. I and III only

d. I, II and III

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

30. Which statement concerning AASB1053 is correct?

a. It is also referred to as the reduced disclosure requirements standard.

b. All entities would be classified as Tier 1, Tier 2 or Tier 3.

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.

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

31. According to AASB 1039, how many of the following disclosures must be made in a concise financial report in order to provide clear information to shareholders?

 Graphs of profits for the last five years

 Details of any changes in accounting policies or estimates

 The amount of dividends paid and dividends declared

 That the report is an extract only from the full financial report

a. 1

b. 2

c. 3

d. 4

Correct answer: c

Feedback: Not the last.

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

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

a. Statement of cash flows

b. Statement by the auditor

c. Statement of changes in equity

d. Notes to the financial statements

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

33. Which of the following statements about concise financial reports is correct?

a. Concise reports do not have to include a statement of changes in equity.

b. A full report must be sent to the shareholder unless they request a concise report.

c. A company has the right to send a concise report to the shareholder unless the shareholder requests a full report.

d. A company must apply to ASIC if they want the right to issue concise reports rather than full reports.

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

34. Which of the following statements concerning concise financial reports are true?

1. There is a charge to the shareholder for requesting a full financial report but the concise report is free.
2. If a shareholder accepts a concise financial report they cannot also request a full report.
3. Must be drawn up in accordance with accounting standards.
4. The financial statements in the concise report need not comply with all the accounting standards.

a. I and III

b. III only

c. II and IV

d. I and IV

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

35. Interim reports are required to be prepared by a disclosing entity:

a. each half-year.

b. each three months.

c. every nine months.

d. for any period shorter than a full reporting period.

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

36. AASB 1039 suggests that some discussion and analysis should accompany concise reports. Which of the following is a suggested discussion item for the statement of cash flows?

a. Main influences of the costs of operations.

b. Causes of significant changes in issued capital.

c. Repayment and servicing of any borrowings.

d. Relationship between debt and equity.

Correct answer: c

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

37. As set out in IAS 1/AASB 101, the following are general requirements that apply to annual reports except for:

a. A list of all the accounting standards followed must be included.

b. There must be a description of the entity’s operations and its principal activities.

c. Comparative figures for the previous reporting period must be disclosed.

d. The reporting date or period covered by each financial statement must be included.

Correct answer: a

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

38. Under the Corporations Act, which of the following is not necessarily a disclosing entity?

a. A corporation that raises funds via a prospectus

b. A public company

c. A borrowing corporation

d. A stock exchange listed company

Correct answer: b

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

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

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, a condensed statement of cash flows and selected notes.

d. 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.

Correct answer: d

Learning objective 17.1 ~ discuss the general reporting requirements imposed by the Corporations Act 2001 and the accounting standards.

40. The correct heading on a statement of profit or loss and other comprehensive income made up for a twelve-month period to 30 June 2019 is:

a. 30th June 2019

b. as at 30 June 2019

c. for the year ended 30 June 2019

d. for the period ended 30 June 2019

Correct answer: c

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

41. Which approach is contained in IAS 1/AASB 101, requiring all income and expenses to be included in the determination of profit?

a. the operating approach.

b. the comprehensive profit approach.

c. the reporting method approach.

d. the all-inclusive profit approach.

Correct answer: d

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

42. Excluding other comprehensive income in the definition of profit, which of the following is not included in the calculation of a company’s profit or loss?

a. Dividends received

b. Gain on the sale of fixed assets

c. Expense on the impairment of assets held

d. Adjustments from translation of the financial statements of a foreign operation

Correct answer: d

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

43. Which accounting standards are specific to the nature and disclosure of income?

a. IAS 1/AASB 101; IAS 7/AASB 107

b. IAS 16/AASB 116; IAS 7/AASB 107

c. IAS 7/AASB 107; IAS 18/AASB 118

d. IAS 1/AASB 101; IAS 15/AASB 115

Correct answer: d

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

44. The approach contained in IAS 1/AASB 101 to determine a company’s profit or loss is:

a. the new approach.

b. the operational approach.

c. the all-inclusive profit approach.

d. the profit or loss approach.

Correct answer: c

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

45. Under the accounting standards, which of the following is not typically included in other comprehensive income?

a. Downward revaluations of non-current assets, not requiring adjustment to a revaluation surplus.

b. Upward revaluations of non-current assets requiring adjustment to a revaluation surplus.

c. Gains or losses on remeasuring investments in equity instruments.

d. Adjustments from translation of the financial statements of a foreign operation.

Correct answer: a

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

46. When might borrowing costs not appear in a statement of comprehensive income?

a. If they relate to research expenditure.

b. If they result from a negatively geared project.

c. If they are less than five percent of total expenses.

d. If borrowing costs are directly attributable to the acquisition, construction or production of a qualifying asset.

Correct answer: d

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

47. Which of the following categories of revenue do not require separate disclosure under IAS 18/ AASB 118?

a. Royalties

b. Rents received

c. Dividends received

d. Revenue from the rendering of services

Correct answer: b

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

48. AASB 115 suggests which of the following as appropriate categories for the aggregation of revenues?

1. Geographical region
2. Type of goods or services
3. Duration of contract
4. Type of customers

a. II and IV only

b. I, III and IV only

c. I, II and IV only

d. I, II, III and IV

Correct answer: d

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

49. Which of the following expenses do not require separate disclosure under the accounting standards in the statement of profit or loss and other comprehensive income or in the notes attached to the statement?

a. Rent expense

b. Interest paid

c. Bad and doubtful debts

d. Impairment expenses of non-current assets

Correct answer: a

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

50. Under IAS 1/AASB 101, expenses classified into the following groups: cost of sales; selling expenses; administrative expenses; and finance expenses; are classified by:

a. nature.

b. liquidity.

c. function.

d. tangibility.

Correct answer: c

Learning objective 17.2 ~ demonstrate the external reporting requirements for a statement of profit or loss and other comprehensive income for a company.

51. The correct heading on a statement of financial position prepared for 30 June 2019 is:

a. 30th June 2019

b. as at 30 June 2019

c. for the year ended 30 June 2019

d. for the period ended 30 June 2019

Correct answer: b

Learning objective 17.3 ~ demonstrate the external reporting requirements for a statement of financial position for a company.

52. IAS 1/AASB 101 prescribes which format for the statement of financial position?

a. Assets = equity + liabilities

b. Equity = assets – liabilities

c. Assets – liabilities = equity

d. No one format is prescribed

Correct answer: d

Learning objective 17.3 ~ demonstrate the external reporting requirements for a statement of financial position for a company.

53. Under IAS 1/AASB 101, which of the following statements concerning the statement of financial position is correct?

a. The statement has a prescribed format.

b. Movements in reserves must be shown on the face of the statement.

c. The statement must begin with the assets section.

d. All assets and liabilities must be classified as current or non-current (unless a liquidity presentation is more appropriate).

Correct answer: d

Learning objective 17.3 ~ demonstrate the external reporting requirements for a statement of financial position for a company.

54. Under IAS 1/AASB 101 which of the following is most likely to be classified as a non-current asset?

a. Goodwill

b. Deferred tax

c. Inventories

d. Long-term borrowings

Correct answer: a

Learning objective 17.3 ~ demonstrate the external reporting requirements for a statement of financial position for a company.

55. In the heading for a statement of financial position made up to 31 December 2020 the date must be stated as:

a. As at 31 December 2020

b. For the year ended 31 December 2020

c. For the reporting period ended 31 December 2020

d. 31 December 2020

Correct answer: a

Learning objective 17.3 ~ demonstrate the external reporting requirements for a statement of financial position for a company.

56. An alternative name for the statement of financial position is:

a. Financial performance statement

b. Financial balances statement

c. Income statement

d. Balance sheet

Correct answer: d

Learning objective 17.3 ~ demonstrate the external reporting requirements for a statement of financial position for a company.

57. Which of the following statements concerning the statement of changes in equity is correct?

a. It is only required to be prepared by disclosing entities.

b. It provides a link between the statement of profit or loss and other comprehensive income and the statement of cash flows.

c. It provides a link between the statement of profit or loss and other comprehensive income and the statement of financial position.

d. It is only required to report the ending balances of each category of equity.

Correct answer: c

Learning objective 17.4 ~ demonstrate the external reporting requirements for a statement of changes in equity for a company.

58. Under IAS 1/AASB 101, the statement of changes in equity is:

a. an additional financial report that each entity is required to supply to its external users.

b. only required to show changes in retained earnings, not changes in share capital.

c. not required to separately disclose transfers to reserves from retained profits as they do not change total equity.

d. only required to reconcile the opening and closing balance of total equity, not the individual equity components.

Correct answer: a

Learning objective 17.4 ~ demonstrate the external reporting requirements for a statement of changes in equity for a company.

59. IAS 1/AASB 101 specifies that the statement of changes in equity must disclose how many of the following items?

 Total comprehensive income for the period.

 A reconciliation between carrying amount at the beginning and end of the period for each item of equity.

 Contributions by and distributions to owners, disclosed separately.

a. 0

b. 1

c. 2

d. 3

Correct answer: d

Learning objective 17.4 ~ demonstrate the external reporting requirements for a statement of changes in equity for a company.

60. Which of the following expenses normally appearing in an internally prepared income statement are required to be separately disclosed in an external income statement prepared to conform to the requirements of the accounting standards?

• • Advertising
  • Insurance
  • Telephone

a. None

b. Advertising only

c. Insurance only

d. All of these expenses

Correct answer: a

Learning objective 17.5 ~ prepare the financial statements as required for general purpose financial reporting.

61. Under the simplest sample format provided in the Implementation Guidance accompanying IAS 1/AASB 101, the final line in the statement of profit or loss and other comprehensive income is:

a. profit/loss for the period.

b. total comprehensive income for the period.

c. profit/loss after tax and comprehensive income.

d. profit/loss and other comprehensive income for the period.

Correct answer: b

Learning objective 17.5 ~ prepare the financial statements as required for general purpose financial reporting.

62. The most commonly preferred term used for owner’s equity in a company balance sheet is:

a. equity.

b. shareholder’s funds.

c. shareholder’s equity.

d. share capital and reserves.

Correct answer: a

Learning objective 17.5 ~ prepare the financial statements as required for general purpose financial reporting.

63. Expenses classified by nature would not include:

a. bad debts expense.

b. depreciation and amortisation expenses.

c. finance costs.

d. Impairment expenses.

Correct answer: c

Learning objective 17.5 ~ prepare the financial statements as required for general purpose financial reporting.

64. Which of the following expenses do not require separate disclosure in an external statement prepared to conform to the requirements of the accounting standards?

1. Freight outwards
2. Finance costs
3. Utilities expenses
4. Printing and stationery expenses

a. I, II, III and IV

b. II and IV

c. II, III and IV

d. I, III and IV

Correct answer: d

Learning objective 17.5 ~ prepare the financial statements as required for general purpose financial reporting.

65. How many of the following expenses that would normally appear in an internally prepared profit and loss statement are required to be separately disclosed in an external statement prepared to conform to the requirements of the accounting standards?

 Cleaning

 Salaries and wages

 Telephone expense

 Repairs and maintenance

a. 1

b. 2

c. 3

d. 4

Correct answer: a

Feedback: Salaries and wages would be disclosed.

Learning objective 17.5 ~ prepare the financial statements as required for general purpose financial reporting.