Quiz-1-2022-question-common-test-final-assessment-for-far270-uitm
.pdf
School
University of California, Berkeley**We aren't endorsed by this school
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ACCOUNTING 111A
Subject
Accounting
Date
Dec 30, 2024
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7
Uploaded by BrigadierSteel14535
QUIZ 1 2022 Question - common test & final assessment forFAR270 ( UiTM)Financial Accounting And Reporting (Universiti Teknologi MARA)Scan to open on StudocuStudocu is not sponsored or endorsed by any college or universityQUIZ 1 2022 Question - common test & final assessment forFAR270 ( UiTM)Financial Accounting And Reporting (Universiti Teknologi MARA)Scan to open on StudocuStudocu is not sponsored or endorsed by any college or universityDownloaded by naddy naddy (xevoto7957@mowline.com)lOMoARcPSD|50670583
QUIZ 1 MFRS 110 Events after Reporting Period MFRS 137 Provisions, Contingent Liabilities & Contingent Assets MFRS 108 Change in Accounting policies, Change in Accounting Estimates & ErrorsPART A This part consists of 15 multiple choice questions. Choose the most suitable answer. 1. Which of the following are examples of non-adjusting events after the reporting period? i) Announcing a plan to discontinue an operation ii) Destruction of a major production plant by a fire after the reporting period iii) Major business combination after the reporting period iv) Sale of inventories at a price lower than cost after the reporting period A. i & ii B. i , iii & iv C. i , ii & iii D. All 2. Discuss the treatment if dividends are declared after the reporting period but before the financial statements are authorised for issue. A. The dividends are not recognised as a liability at the end of the reporting period and such dividends are disclosed in the notes to account. B. The entity does not merely disclose a dividend because it does not provide additional evidence. C. An entity is required to adjust the dividend amounts recognised in its financial statements. D. No adjustment and disclosure needed. 3. A company is preparing its financial statements for the year to 31 March 2021. Assuming that each of the following events occurs after 31 March 2021 but before the financial statements are authorised for issue, which one of them should be classified as a NON-ADJUSTING event? A. The bankruptcy of a customer who owed a substantial amount to the company at 31 March 2016 B. The discovery of a major fraud that had occurred in January 2016 Downloaded by naddy naddy (xevoto7957@mowline.com)lOMoARcPSD|50670583
C. The sale of inventories which were held on 31 March 2016 D. A change in tax rates that is announced in April 2016 and which has a material impact on the tax liability for the year to 31 March 2016 Question 4 and 5 are referring to the below situation. One Bhd, a developer and manufacturer of household and commercial cleaning products, prepares its financial statements to 31 December 2020. On 2 March 2021, RM200,000 was paid to Mr Shukri as compensation for his removal as Finance Director. 4. Identify the nature of the event above. A. Prior period adjustment B. Adjusting event C. Non-adjusting event D. Changes in accounting estimates 5. State the journal entries of the event above A. Dr SOPL (compensation expenses) Cr SOFP (Bank) B. Dr SOPL (compensation expenses) Cr Accrued compensation C. Dr Retained Earnings Cr Accrued compensation D. None of the above 6. An asset of RM100,000 with an estimated life of 10 years was acquired in January 2018. On 1 January 2021, the remaining useful life was determined to be 5 years. The depreciation charge for the year ended 31 December 2021 shall be: A. RM20,000 B. RM14,000 C. RM16,000 D. RM10,000 Downloaded by naddy naddy (xevoto7957@mowline.com)lOMoARcPSD|50670583
7. WM Bhd has an equipment costing RM5,000,000 with a residual value of RM50,000. It was depreciated over 10 years on a straight-line basis since it was acquired in 2019. During the current year 2021, the company decided to depreciate the equipment at 20% per year based on the reducing balance method. What is the depreciation charge for 2021? A. RM990,000 B. RM802,000 C. RM800,000 D. RM792,000 8. Mace Bhd has a patent on the design of a speed boat that was acquired in 2018 for RM400,000. The patent has been amortized on a straight-line basis over its legal life of 20 years. In June 2020, the benefits derived from the patent were determined to be only 10 years. The accounting treatment in relation to the patent is considered as: A. Change in accounting policy B. Change in estimate C. Correction of prior year errors D. None of the above 9. Prior period errors could be caused by: A. Mathematical errors B. Mistakes in applying accounting policies C. Fraud D. All of the above 10. During the year, the accountant of Banggol Bhd discovered that accrued wages expenses worth RM5,000 have been omitted from the previous year’s purchase and no adjustments have been made.Discuss the appropriate accounting treatment. A. Dr Statement of Profit and loss Cr Accrued wages B. Dr Wages Expenses Cr Statement of Profit and loss C. Dr Retained Earnings Cr Accrued wages D. None of the above 11. Present obligation; yes, Probable outflow; yes, Reliable estimate of amount; yes. When all those conditions are fulfilled, the entity can _______________. Downloaded by naddy naddy (xevoto7957@mowline.com)lOMoARcPSD|50670583
A. disclosed a contingent Asset B. disclosed a contingent Liability C. takes no action D. recognised a Provision 12. Obligating events is A. an event that does not creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation. B. an event that creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation. C. an event that creates a legal obligation that results in an entity having no realistic alternative to settling that obligation. D. an event that creates constructive obligation that results in an entity having no realistic alternative to settling that obligation. 13. An asset is recognised when the receipt is ____________. A. virtually certain B. probable C. possible D. possible and remote 14. Legal obligation arises from all below EXCEPT______________. A. A contract B. Legislation C. other operation of law D. Constitution 15. The reimbursement should be recognised only when it is ______________. Downloaded by naddy naddy (xevoto7957@mowline.com)lOMoARcPSD|50670583
A. Virtually certain B. Probable C. Possible D. Remote PART BThis part consists of 15 statements. State whether the statement is True or False in the third column. T/F 1 MFRS 135 is regarding Provisions, Contingent Liabilities and Contingent Assets. 2. Contingent liability is an unrecognised present obligation that arises from future events. 3. Where there is a present obligation but the payment date and/ or the amount to be paid is not quite certain, that event is referred to as a provision. 4. An asset is recognised instead of a disclosure of a contingent asset if the amount received is probable. 5. An entity which enters an onerous contract will need to recognise a provision. 6. A present obligation can be divided into three categories. They are legal, constructive and conservative. 7. A company paying two months’ bonus to its current employees even though there is no contract to do so is example of constructive obligation. 8. If the contingent liability is remote, it needs not to be disclosed. 9. If the contingent asset is probable and remote, it needs not to be disclosed. 10. A disclosure in the notes to the account means that an entity is to disclose a brief description of the nature and the estimate of the financial effect of the event. Downloaded by naddy naddy (xevoto7957@mowline.com)lOMoARcPSD|50670583
11. The events which take place after the reporting date but before the date of authorization of financial statements for an issue is called events after reporting period 12. Settlement after the reporting date of court cases that confirm the entity had a present obligations at the reporting date is an example of adjusting events 13 Prior year errors should be adjusted prospectively 14. Changes in accounting policies should be applied in the year of change. 15. You accept advice to accelerate your depreciation policy. To make the change, you will need to change the accounting estimate. Downloaded by naddy naddy (xevoto7957@mowline.com)lOMoARcPSD|50670583