Mock Exam

Question 1

Companies account for the exchange of non-monetary assets on the basis of the fair value of the asset given up or the fair value of the asset received.

Answer 1

True

Question 2

Under IFRS, all gains on non-monetary exchanges are recognized, regardless of whether the transaction has commercial substance or not.

Answer 2

F

Question 3

Revenue can be recognized before the contract exists.

Answer 3

F

Question 4

Debt investments not held for collection are reported at fair value.

Answer 4

T

Question 5

Companies are required to assess the estimated useful life and salvage value of intangible assets at least annually.

Answer 5

T

Question 6

In a service-type warranty, warranty revenue is

Answer 6

recognized equally over the warranty period.

Question 7

Which of the following is the proper way to report a contingent asset considered probable?

Answer 7

As a disclosure only.

Question 8

What does the current ratio inform you about a company?

Answer 8

The company’s liquidity.