In: Accounting
MCQ QUESTIONS
1. IAS 21 also includes some other terms and definitions:
The term foreign operation definition is:
It buys goods from a supplier in France (with euros as its functional currency) on 17 November 20X6 invoiced in euros $140,000. The French supplier is eventually paid in March 20X7. Exchange rates over the period were as follows:
17 November 20X6 $1=$0.70
31 December 20X6 $1=$0.75
Average for November $1=$0.72
A) The purchase/inventory and the trade payable should be recorded
initially by translating the transaction at the spot rate of
$1=$0.70. This gives a translated value of $98,000 for recording in
the ledger accounts ($140,000 X0.70)
B) The purchase/inventory and the trade payable should be recorded initially by translating the transaction at the spot rate of $1=$0.75. This gives a translated value of $105,000 for recording in the ledger accounts ($140,000 X0.75)
C) The purchase/inventory and the trade payable should be recorded initially by translating the transaction at the spot rate of $1=$0.72. This gives a translated value of $100,000 for recording in the ledger accounts ($140,000 X0.72)
A) Monetary items, such as trade payables and trade receivables, and non-monetary items, such as non current assets and inventory
B) Tangible items, such as trade payables and trade receivables, and non-monetary items, such as non current assets and inventory
C) Intangible items, such as trade payables and trade receivables, and non-monetary items, such as non current assets and inventory
B. a chairman’s statement a directors’ report
C. a corporate social responsibility
report
A) All of the above
B) None of the above
C) Only A and B
11. It is difficult to assess a
company’s financial performance by analyzing the financial results
for one year?
A) Better information is obtained by making comparisons with
financial performance in the previous year, or perhaps over several
periods (trend analysis)
B) Better information is obtained by making comparisons with financial performance in the previous year, or perhaps over several periods (regression analysis)
C) Better information is obtained by making comparisons with financial performance in the previous year, or perhaps over several periods (cost analysis)
12. For an entity that has a seasonal business, with some months of high purchases and some months of low purchases:
13. A highly geared company may find it more difficult to raise additional debt capital:
A) Because lenders will demand either security for their loans/bonds or will demand a much higher yield/ interest rate
B) Because lenders will demand neither security for their loans/bonds or will demand a much higher yield/ interest rate
C) None of the above
14. This ratio measure the share price as a multiple of EPS. Investors use the P/E ratio to make comparisons of share prices between companies and to assess whether a company’s shares seems under-priced or over-priced relatives to share prices of other companies
A) Price earnings ratio (P/E)
B) Earnings per share (EPS)
C) None of the above
15. In most countries, companies are allowed to decide for themselves what their financial year-end date should be
A) The choice of dates can affect the financial ratios
B) The choice of dates can affect the solvency ratios
C) The choices of dates can affect the insolvency ratios