1. Which of the following transactions results in an immediate increase in expenses?
(a) Purchase of office equipment on credit.
(b) Payment of accounts payable.
(c) Payment of wages.
(d) Repayment of bank loan.
2. In practice, accountants record sales revenue when:
(a) An order is placed by a customer.
(b) Cash is received for the sales.
(c) A product is finished and ready for sale.
(d) An invoice or account is sent to the customer.
3. A capital expenditure results in a debit to:
(a) An asset account.
(b) An expense account.
(c) An equity account.
(d) A liability account.
4. Depending on the circumstances, the value of an asset could reasonably be thought
of as:
(a) Its replacement cost.
(b) Its realizable value in a market.
(c) The future benefits that will flow from it.
(d) Any of the above.
5. The IASB Framework gives primacy of definition to:
(a) Expenses and income.
(b) Payments and receipts.
(c) Equity.
(d) Assets and liabilities.
6. According to the IASB’s Framework, an asset is something:
(a) Owned.
(b) Controlled.
(c) Used.
(d) Owned and controlled.
7. The following would
not
be recognized as assets under IFRS rules:
(a) Research costs.
(b) Costs of setting up a business.
(c) Re-decoration of a building.
(d) All of the above.