Worldatwork T7 Exam Practice Test Instant Access

Question 1

What is one of the purposes of International Accounting Standards Board (IASB)'s conceptual framework, which establishes the concepts that underlie financial reporting?

AProvides information about economic entities that is useful in making economic decisions

BProvides guidance where conflicting interpretations have developed

CProvides benchmark for judgments

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

Answer : C

Question 2

Predictive value is an ingredient of which of the following fundamental characteristics of information?

AComplete

BComparability

CRelevance

DNeutral

Answer : C

Question 3

When a company consumes the economic benefit arising from service provided by an employee in exchange for employee benefits, what is it considered in accounting terms?

AThe employee value proposition

BAn expense

CA benefit

DA cost

Answer : B

Question 4

One of the reasons preparers use the conceptual framework is to:

ADevelop accounting policies in the absence of specific standards

BDocument a historical record of all judgments

CDevelop alternate interpretations of specific standards

DEncourage change to standards as Board members change

Answer : A

Question 5

Which of the following best defines the term ''liability''?

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

BA 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

CDecreases 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

DIncreases 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

Answer : B

Question 6

Which statement below most accurately describes a primary purpose of the Standards Advisory Council (SAC)?

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

BAppoints International Accounting Standards Board (IASB) members

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

DHas the sole responsibility for setting standards

Answer : A

Question 7

What is one of the primary purposes of the International Accounting Standards Board (IASB)?

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

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

CTo appoint Standards Advisory Council (SAC) members

DTo monitor International Accounting Standards Board (IASB) effectiveness

Answer : A

Worldatwork International Financial Reporting Standards for Compensation Professionals T7 Exam Practice Test