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Question 01

Which one of the following qualitative characteristics of financial information can be described as a 'Threshold' quality?

a) Reliability

b) Relevance

c) Materiality

d) Understandability

Question 02

The 'going concern' concept assumes that:

a) the business can continue in operational existence for the foreseeable future.

b) the business cannot continue in operational existence for the foreseeable future.

c) the business is continuing to be profitable.

d) the business is causing concern to investors.

Question 03

The format of published financial summaries within the European Union is decided by:

a) the company itself.

b) the company's auditors.

c) stock exchange regulations.

d) European Union regulations.

Question 04

In the UK, the government's official registry of company information is called:

a) Corporation House

b) Business Information House

c) Companies House

d) Shareholders' House

Question 05

To save printing and distribution costs, companies are allowed to send financial information to shareholders:

a) only once every two years.

b) in an electronic version.

c) only if they ask for it.

d) only if the company is profitable.

Question 06

Which one of the following is not a valid reason for the disparity of international accounting procedures?

a) The problems of translation from one language to another

b) The nature of the country's legal system

c) The relationship between taxation requirements and financial reporting requirements

d) The relative strength of the accounting profession

Question 07

Which one of the following factors has led to the development of strong, independent professional accountancy associations within specific countries?

a) Predominantly small, family-run businesses

b) Wide share ownership

c) Banks owning majority of shares of large companies

d) Communist governments

Question 08

The body charged with the aim of harmonizing international accounting practice is:

a) the Financial Harmony Council.

b) the International Accounting Goodwill Fellowship.

c) the International Financial Foundation.

d) the International Accounting Standards Committee Foundation.

Question 09

When developing international accounting standards, it is usual for an 'Exposure Draft' to be published. Which one of the following best describes an Exposure Draft?

a) A preliminary version of the proposals, made available for public debate and feedback

b) The agreed version of an international accounting standard issued immediately prior to final publication

c) The summary of feedback received following the publication of a new international accounting standard

d) A call to the general public to generate fresh ideas for new accounting standards

Question 10

The status of International Accounting Standards (IASs) was given a significant boost in 2001 when which one of the following events occurred?

a) The President of the United States endorsed IASs for American companies

b) IASs received World Heritage Status from the United Nations

c) The European Commission proposed that from 2005 listed companies throughout the EU should be obliged to follow IASs rather than national standards

d) IASs were made compulsory throughout Asia and Australasia

Oxford University Press, Online Resource Centre, Chapter 01.

Chapter 01

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