Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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According to IAS 37, a liability is 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.
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2.
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The financing need is equal to:
a. | Fixed assets – Current assets + Current
liabilities | b. | Fixed assets
– Current assets – Current liabilities | c. | Fixed assets + Current assets + Current liabilities | d. | Fixed assets + Current assets – Current
liabilities |
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3.
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Given the following data:
o A manufacturer X acquires raw materials, on
credit, for 100 CU.
o The raw materials
will be kept in inventory for a few days before being consumed.
o The purchase of the raw materials will be
settled in two installments: a first payment of 90 after 30 days and the balance after 45
days.
What is recorded in
the balance sheet at the time of the acquisition?
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4.
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Given the following data:
o The total monthly payroll amounts to 300
CU.
o This amount corresponds to a net
payment to the workers of 235 CU, a total of employee withholdings of 20 CU for contribution to the
social security program and a total withholding of 45 CU, which will be paid to the fiscal
authorities in the name of the employees in settlement of personal income taxes.
What is recorded in the financial statements
before the payment of each liability?
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5.
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Which item corresponds to the following
criteria:
o Causality principle: real and present;
o Timing: almost certain;
o Amount: uncertain?
a. | Accrued liabilities | b. | Provisions | c. | Contingent
liabilities | d. | None of the
previous answers |
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6.
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Accruals are often reported as part
of:
a. | Provisions | b. | Long-term debts | c. | Contingent
liabilities | d. | Trade and other
payables |
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7.
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With which accounting principle is the
capitalization of finance leases in conformity?
a. | Matching principle | b. | Principle of “substance over form” | c. | Accrual principle | d. | Principle of
prudence |
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8.
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According to IAS 17, if there is no reasonable
certainty that the lessee will obtain ownership by the end of the lease term, the asset should be
fully depreciated over:
a. | 5 years. | b. | The lease term. | c. | Its useful
life. | d. | The shorter of the lease term or its useful
life. |
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9.
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Accounting for post-employment benefits will depend
on which of the following important distinctions being made regarding the nature of the benefit
plan:
a. | Defined contribution plans or defined benefit
plans. | b. | Pension plans or medical care
plans. | c. | Mutual plans or individual
plans. | d. | Defined input plans or defined output
plans. |
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10.
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Which ratio is used to evaluate the likely
capability of the firm to face its interest obligation?
a. | Interest coverage ratio = Operating income (before
interest expense and income taxes)/Interest expense | b. | Debt ratio = Total debt/Total assets | c. | Debt to equity ratio = Debt/Shareholders’
equity | d. | Long-term debt to equity ratio = Long-term
debt/Shareholders’ equity |
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