International Financial Reporting Standards for Compensation Professionals Exam v7.0 (T7)

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Total 95 questions

Which of the following is a benefit of moving toward a single set of standards?

  • A. Create equity across the economies of different countries
  • B. Reduce the number of cross-border capital flows
  • C. Greater comparability between companies equals lower cost to investors
  • D. Less competition among exchanges


Answer : C

The IAS 19 standard applies to which of the following groups of employees?

  • A. Directors and management personnel
  • B. All employees except casual employees
  • C. All employees
  • D. All full-time employees


Answer : C

Which of the following is true of liabilities?

  • A. Current liabilities come due in less than a year
  • B. Current liabilities come due in less than 18 months
  • C. Noncurrent liabilities come due in less than a year
  • D. Both current and noncurrent liabilities come due in less than a year


Answer : A

In defined contribution plans when the contributions are not expected to be settled wholly before twelve months after the end of the reporting period, what must occur?

  • A. The employer must assume risk for the plan
  • B. Contributions must be discounted
  • C. Contributions must not be discounted
  • D. The employer must pay a specified amount to the employee


Answer : B

Issuance of interim reports is an example of what enhancing characteristic?

  • A. Comparability
  • B. Verifiability
  • C. Relevance
  • D. Timeliness


Answer : D

Why is faithful representation important in accounting documentation?

  • A. It ensures neutrality on the part of the company’s accounting department
  • B. It guarantees that all information is free from error
  • C. It is useful if information represents what it purports to represent
  • D. It indicates that accountants have confirmed all of the data


Answer : C

To estimate how much the employees have earned for their work in the current and prior periods in order to attribute the benefit to the periods of service and to incorporate estimates about demographics and financial variables into calculations, a company must utilize what method?

  • A. Re-measurement method
  • B. Fair value method
  • C. Net present value method
  • D. Projected unit credit method


Answer : D

Which of the following best defines the term “liability”?

  • A. A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity
  • B. 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 embodying economic benefits
  • C. Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants
  • D. Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants


Answer : B

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 arms length transaction
  • D. Quality of information that confirms users’ earlier expectations


Answer : C

Company XYZ does not disclose any information in the notes to their financial statements unless the value of the information to users exceeds the expense of gathering it. Which constraint of Level 3 of the conceptual framework does this represent?

  • A. Cost
  • B. Materiality
  • C. Expense
  • D. Disclosure


Answer : A

Why is accounting for defined benefits plans one of the most complex issues in
International Financial Reporting Standards?

  • A. Because it involves incorporating actuarial assumptions into measurement of the obligation and the expenses
  • B. Because defined benefits plan obligations are not measured on a discounted basis
  • C. Because defined benefits plans must be settled within ten years after the employee renders the related service
  • D. Because the employer is not allowed to incorporate actuarial assumptions into measurement of the obligation and the expenses


Answer : A

An offer of redundancy is an example of which kind of employee benefits?

  • A. Short-term benefits
  • B. Post-employment benefits
  • C. Termination benefits
  • D. Long-term benefits


Answer : C

What are the two guiding principles of accrual accounting?

  • A. Expense recognition and matching
  • B. Revenue recognition and matching
  • C. Revenue recognition and measurement
  • D. Cost and materiality


Answer : B

What is one of the purposes of International Accounting Standards Board (IASB)s conceptual framework, which establishes the concepts that underlie financial reporting?

  • A. Provides information about economic entities that is useful in making economic decisions
  • B. Provides guidance where conflicting interpretations have developed
  • C. Provides benchmark for judgments
  • D. Informs International Accounting Standards Board (IASB) of implications of proposed standards


Answer : C

What are the changes in the present value of the defined benefits obligation that result from experience adjustments or the effects of changes in actuarial assumptions called?

  • A. Net interest on the net defined benefit liability (asset)
  • B. Time value of money
  • C. Current service cost
  • D. Actuarial gains and losses


Answer : D

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Total 95 questions