T7 Sample Questions Answers

To develop a single set of high quality and enforceable global accounting standards

To align US standards and International Accounting Standards Board (IASB) standards

To appoint Standards Advisory Council (SAC) members

To monitor International Accounting Standards Board (IASB) effectiveness

Informs International Accounting Standards Board (IASB) of implications of proposed standards

Appoints International Accounting Standards Board (IASB) members

Approves principles-based standards but does not issue detailed application guidelines

Has the sole responsibility for setting standards

To prescribe the accounting and disclosure for employee benefits

To prescribe the timing of payments

To draw a distinction between long and short term benefits

To draw a distinction between a defined contribution and defined benefit plan

The historical cost of an asset

The fair value of an asset

The ease of converting a noncash asset to cash

Liabilities, minus equity

Verifiability

Predictive value

Confirmatory value

Faithful representation

Create equity across the economies of different countries

Reduce the number of cross-border capital flows

Greater comparability between companies equals lower cost to investors

Less competition among exchanges

Fair value

Time value of money

Net present value

The corporate vision

Net defined benefit liability (asset)

Asset ceiling

Fair value

Net present value

Provide information that is useful for decision making

Enable International Accounting Standards Board (IASB) to issue more useful and consistent pronouncements

Enhance and organization’s financial consistency over time as Board members change

To classify an organization’s stakeholders as either internal or external information users

Short-term benefits

Post-employment benefits

Termination benefits

Long-term benefits

Full disclosure

Expense recognition

Going concern

Constraints

A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits

Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants

Post-employment plan

Defined contribution plan

Defined benefit plan

Bonus plan

To show liability and equity and the manner in which those funds are employed

To account for changes in cash during the accounting period

To show details of the nature of a company’s operating activities

To reconcile the beginning and ending balances of stockholders’ equity

The employee value proposition

An expense

A benefit

A cost

Short-term benefits

Post-employment benefits

Termination benefits

Long-term benefits

Operating expenses

Current liabilities

Current debt

Total expenses

Cost and materiality

Predictive value and confirmatory value

Relevance and faithful representation

Timeliness and understandability

Because no actuarial assumptions are required to measure the obligation or cost and there is no possibility of any actuarial gain or loss

Because short-term employee benefit obligations are measured on a discounted basis

Because short-term employee benefits are not provided in exchange for the service of the employee

Because the employer is required to incorporate actuarial assumptions into measurement of the obligation and the expenses

Operating expenses

Net income

Total income

Current assets

When it is probable that future economic benefits will flow to the company and reliable measurement of the amount of revenue is possible

When the company reports current and non-current classifications in its statement of financial position

When economic benefits are received by the company and reliable measurement of the amount of revenue is possible

When users have sufficient reasonable knowledge of business and financial accounting matters to understand the information

Cash inflows, cash outflows, payment of dividends

Operating activities, cash inflows, cash outflows

Cash sales, investing activities, payment of dividends

Operating, investing, and financing activities

Develop accounting policies in the absence of specific standards

Document a historical record of all judgments

Develop alternate interpretations of specific standards

Encourage change to standards as Board members change