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Chapter 3: Q2ISTQ (page 150)

Information in a company’s first IFRS statements must:

(a) have a cost that does not exceed the benefits.

(b) be transparent.

(c) provide a suitable starting point.

(d) All the above.

Short Answer

Expert verified

The correct option is “d”.

Step by step solution

01

Explanation to correct option

As per the IFRS 1, First IFRS statements of company must include the expenses that are not greater by its benefits, must provide the starting point which is suitable, and also the information should be transparent, hence all of the above is correct option.

02

Explanation to incorrect options

Option a) Information provided in First IFRS statement should be transparent and should provide suitable starting point also.

Option b) As per the First IFRS statement, expenses should not be greater than by its benefits, and also it should indicate suitable beginning point

Option c) As per the First IFRS statement, expenses should not be greater than by its benefits, and also the information furnished should be transparent.

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Most popular questions from this chapter

Selected accounts of Urdu Company are shown below.

Supplies

Beg. Bal

800

10 ⁄ 31

470

Salaries and Wages Expense

10 ⁄ 15

800

10 ⁄ 31

600

Unearned Service Revenue

10 ⁄ 31

400

10 ⁄ 20

650

Service Revenue

10 ⁄ 17

2,400

10 ⁄ 31

1,650

10 ⁄ 31

400

Accounts Receivable

10 ⁄ 17

2,400

10 ⁄ 31

1,650

Salaries and Wages Payable

10 ⁄ 31

600

Supplies Expense

10 ⁄ 31

470

Instructions

From an analysis of the T-accounts, reconstruct

(a) the October transaction entries, and

(b) the adjusting journal entries that were made on October 31, 2017. Prepare explanations for each journal entry

(a) How are the components of revenues and expenses different for a merchandising company? (b) Explain the income measurement process for a merchandising company.

Name the accounts debited and credited for each of the following transactions.

  1. Billing a customer for work done.
  2. Receipt of cash from customer on account.
  3. Purchase of office supplies on account.
  4. Purchase of 15 gallons of gasoline for the delivery of truck.

What are the steps to be completed in preparing the opening IFRS statement of financial position?

What differences are there between the trial balance before closing and the trial balance after closing with respect to the following accounts?

a) Accounts payable

b) Expense accounts

c) Revenue accounts

d) Retained Earnings account

e) Cash
See all solutions

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