WorldatWork T7 - International Financial Reporting Standards for Compensation Professionals Exam Exam
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Total 89 questions
Question #6 (Topic: )
Which of the following is true of accrual accounting?
A. Neither the recognition of revenue nor the recording of expense necessarily involves the receipt or payment of cash
B. It rests on a primary guiding principle, which is recognition
C. The recognition of revenue involves the receipt or payment of cash, while the recording of expense does not
D. It entails recording income or expenditure only when money comes into or leaves the company
Answer: A
Question #7 (Topic: )
What is the purpose of an income statement?
A. To show liability and equity and the manner in which those funds are employed
B. To account for changes in cash during the accounting period
C. To show details of the nature of a company’s operating activities
D. To reconcile the beginning and ending balances of stockholders’ equity
Answer: C
Question #8 (Topic: )
What is one of the primary purposes of the International Accounting Standards Board
(IASB)?
(IASB)?
A. To develop a single set of high quality and enforceable global accounting standards
B. To align US standards and International Accounting Standards Board (IASB) standards
C. To appoint Standards Advisory Council (SAC) members
D. To monitor International Accounting Standards Board (IASB) effectiveness
Answer: A
Question #9 (Topic: )
Companies desire more current assets than current liabilities. What is the difference
between current assets and current liabilities called?
between current assets and current liabilities called?
A. Net income
B. Total liabilities
C. Net working capital
D. Noncurrent liabilities
Answer: C
Question #10 (Topic: )
What are the usual and customary costs that a company incurs to support its main
business called?
business called?
A. Operating expenses
B. Current liabilities
C. Current debt
D. Total expenses
Answer: A
