Student+Revision+Quiz+4.doc - Student Revision Quiz 4.1(See...

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Student Revision Quiz 4.1 (See related pages) 1 Which of the following is not a characteristic of assets based on the SAC 4 (AASB Framework) definition? A) It is specific to the entity. B) It is expected to provide future economic benefits to the entity. C) It must be controlled by the entity. D) It arose from a past transaction or event. 2 Future economic benefits are synonymous with which of the following terms? A) Physical capacity B) Cash equivalent C) Service potential D) All of the above 3 If an Australian Accounting Standard were numbered AASB 64, what would this indicate? A) That it was purely a domestic standard with no international equivalent. B) That it relates to one or more of the recent standards issued by the IASB with an IFRS prefix. C) That it relates to one or more of the earlier standards issued by the IASB with an IAS prefix. D) None of the above. 4 Complete the following definition of control from SAC 4: 'the _____________ of the entity to _____________ the asset in pursuit of the entity's objectives and to _____________ or regulate the access of others to that benefit.' A) ability; fully utilise; stop B) capacity; benefit from; deny right; use; restrict
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C) D) necessity; access; limit 5 According to SAC 4 (the AASB Framework), there are specified recognition criteria to be met before an asset can be included in the accounts. Which of the following represents one of the recognition criteria? A) The economic benefits are possible. B) The economic benefits are assured beyond reasonable doubt. C) The economic benefits are virtually certain. D) The economic benefits are probable. 6 Under AASB 136 'Impairment of Assets', where the recoverable amount of an asset is greater than the carrying amount, the entity must recognise the difference as: A) an impairment loss B) revenue C) an increment to the 'asset revaluation reserve' D) None of the above 7 Under SAC 4 (the AASB Framework), where expenditure is deemed unlikely to generate future economic benefits, it is expensed. In a subsequent period conditions change, and it is now likely that the earlier expenditure will lead to future economic benefits. An asset account will be debited, but what will be the credit entry? A) A credit to the liability account 'unearned income'. B) A credit to the contra expense account 'deferred expenditure'. C) A credit to the owners' equity account 'retained earnings'. D) A credit to the revenue account 'gain from reinstatement of asset previously written- off'. 8 In relation to the intended application of the SAC 4 (AASB Framework) recognition test for assets, which of the following statements is correct? A) If an expenditure outlay passes the recognition test for an asset in this period, but fails it in a future period, there will need to be a retrospective write-down against
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retained profits. B) If an expenditure outlay fails the recognition test for an asset in this period, but satisfies the recognition test in a future period, no subsequent adjustment can be made.
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