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- 43. The chief accountant shall charge obligations incurred against available allotment to ensure that The NCA is sufficient to meet the disbursement made There are no unreleased appropriations No overdraft is incurred On excess allotments existsIn the case of grants related to income, which of these accounting treatments is prescribed by IAS 20? (a) Credit the grant to “general reserve” under shareholders’ equity. (b) Present the grant in the income statement as “other income”’ or as a separate line item, or deduct it from the related expense. (c) Credit the grant to “retained earnings” on the balance sheet. (d) Credit the grant to sales or other revenue from operations in the income statement.17. Gain contingencies should a. be accrued if they are probable and can be reasonably estimatedb. not be accrued in the accountsc. be accrued only if they are the result of litigation or government appropriationd. not be accrued or disclosed in the footnotes
- An appropriation of accumulated profits for possible contingencies should be a. Transferred to income as losses are realized b. Shown within shareholders’ equity in the statement of financial position c. Charged with all losses related to that contingency d. Classified in the liability section of the statement of financial positionIn a company policy distinguishing between capital expenditures and revenue expenditures. A dollar minimum ordinarily will be established for ___________________; any expenditures of a lesser amount automatically are classified as charges against current revenue.Gem Company classifies a portion of its retained earnings as appropriated for loss contingencies. Consequently, the company Group of answer choices A.) May transfer to income a part of said retained earnings so appropriated. B.)Should not identify said appropriation as an appropriation of retained earnings. C.) Should show the said appropriation of retained earnings within the stockholders' equity section of the balance sheet D.)Could charge costs or losses to the said appropriated retained earnings.
- 29. _____________ are the entity’s present obligations arising from past events, the settlement of which is expected to result in an outflow of resources from the entity. a. Assets b. Expenses c. Liabilities d. IncomeWhich of the following is correct about contingent liabilities and provisions? The terms are interchangeable. A provision is based on an estimate while a contingent liability can be estimated reliably. A provision is disclosed in the statement of financial position while a contingent liability is disclosed in the notes. A contingent liability does not need to be disclosed in an entity's annual report.8. Statement 1: An entity shall begin capitalizing borrowing costs as part of the cost of qualifying asset on the date of recognition. Statement 2: Expenditures of a qualifying asset include only those expenditures that have resulted in payment of cash, transfers of other assets, or the assumption of interest- bearing liabilities. а. Only the first statement is correct. b. Only the second statement is correct. С. Both statements are correct. d. Neither of the statements is correct.
- 30. The following statements are incorrect, except: a. Issued instruments are classified as liabilities or equity in accordance with the legal form of the contractual arrangement and the definitions of the financial liability and an equity instrument. b. A preference share that will be redeemed by the issuer for cash on a future date is a financial liability. c. IAS 37 prescribes the accounting and disclosure for all provisions, contingent liabilities and contingent assets, and those resulting from financial instruments that are carried at fair value. d. Issued instruments are classified as liabilities or equity in accordance with the management’s designation of the contractual arrangement.Which of the following statements about Accounting Changes isincorrect? A. When retrospective application is impracticable, the entity shall apply the new policy as at the beginning of the earliest period for which restatement is practicable, which may be the current period. A corresponding adjustment to each affected component of equity affected shall be made. B. Retrospective application is applying the new policy to the transactions, other events and conditions occurring after the date as at which the policy is changed and recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change. C. An entity shall correct material prior period errors retrospectively in the first set of financial statements authorized for issue after their discovery by restating the comparative amounts for the prior period(s) presented in which the error occurred. D. Changes in accounting policies do not include applying an accounting policy for…Under IFRS 9, the cumulative balance of equity as a result of measuring financial assets at fair value through other comprehensive income shall be reversed to profit or loss at the date the security is sold shall be reversed to profit or loss when there is objective evidence of impairment shall not be reversed to profit or loss but may be transferred to another equity account shall not be reversed to profit or loss and may not be transferred to another equity account