Month: January 2024

According to the IASB’s Conceptual Framework, information on which two of the following areas can help users identify the reporting entity’s financial strengths and weaknesses?

A The economic resources it controls
B Its financial performance in the past
C The demographic structure of the local economy
D The entity’s claims (the entity’s liabilities)
E Its management structure

Select ONE answer:

1. A & D
2. B & C
3. D & E
4. A & B

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – A & D – The IASB’s Conceptual Framework states that information about the economic resources (A) and claims (D) of an entity can help users to identify the reporting entity’s financial strengths and weaknesses. That information can then be used to help users to assess the reporting entity’s liquidity and solvency.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

According to the IASB’s Conceptual Framework, which qualitative characteristics enhance the usefulness of information that is relevant and faithfully represented?

Select ONE answer:

1. Comparability, understandability, timeliness, verifiability
2. Consistency, prudence, measurability, verifiability
3. Consistency, reliability, measurability, timeliness
4. Materiality, understandability, measurability, reliability

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – This is set out in paragraph QC19 of the lASB’s Conceptual Framework
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.