Worldatwork T7 Exam Questions Instant Access

Question 1

Which of the following is true of accrual accounting?

ANeither the recognition of revenue nor the recording of expense necessarily involves the receipt or payment of cash

BIt rests on a primary guiding principle, which is recognition

CThe recognition of revenue involves the receipt or payment of cash, while the recording of expense does not

DIt entails recording income or expenditure only when money comes into or leaves the company

Answer : A

Question 2

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

AThe residual interest in the assets of the entity after deducting all its liabilities.

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

CA 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

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 3

Which of the following describes the concerns of Level 3 of the conceptual framework for financial reporting?

ABasic objective

BRecognition, measurement, and disclosure concepts

CFundamental concepts

DElements of financial statements

Answer : B

Question 4

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 5

Employee benefits that are payable after the completion of employment are considered what kind of benefits?

AShort-term benefits

BPost-employment benefits

CTermination benefits

DLong-term benefits

Answer : B

Question 6

When the quality of information confirms users' earlier expectations, which characteristic is being represented?

AVerifiability

BPredictive value

CConfirmatory value

DFaithful representation

Answer : C

Question 7

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

Worldatwork International Financial Reporting Standards for Compensation Professionals T7 Exam Questions