WorldatWork T7 Exam - Questions and Answers

Question 1

Current assets comprise assets that can be converted to cash. They must be converted within what time period?

A. Before the end of the fiscal year
B. Within a year
C. Within a fiscal year
D. Within two years

Answer : B

Question 2

Which of the following is a disadvantage of reporting assets at historical cost?

A. Historical cost is not objective
B. Historical cost is not particularly relevant to most readers
C. Historical cost is subject interpretation, and therefore to bias
D. Historical cost is not verifiable

Answer : B

Question 3

Employee benefits that are expected to be settled wholly before twelve months after the end of the annual reporting people in which the employee rendered the related service are considered what kind of benefits?

A. Short-term benefits
B. Post-employment benefits
C. Termination benefits
D. Long-term benefits

Answer : A

Question 4

What is the purpose of a balance sheet?

A. To show sources of funds and the manner in which those funds are employed
B. To account for changes in cash during the accounting period
C. To show details of the nature of a company’s operating activities
D. To reconcile the beginning and ending balances of stockholders’ equity

Answer : A

Question 5

How do noncurrent assets (long-term assets) differ from current assets?

A. Noncurrent assets cannot be easily converted to cash within a year
B. Noncurrent assets are not affected by the fiscal year
C. Noncurrent assets cannot be easily converted to cash within two years
D. Noncurrent assets can only be converted to cash until the subsequent fiscal year

Answer : A

Question 6

What are balanced sheets and income statements linked by?

A. Investing activities
B. Retained earnings
C. Expenses
D. Net income

Answer : B

Question 7

Which of the following are ingredients of the fundamental characteristic of relevance?

A. Cost and materiality
B. Predictive value and confirmatory value
C. Relevance and faithful representation
D. Timeliness and understandability

Answer : B

Question 8

Which of the following best defines the term “equity”?

A. The residual interest in the assets of the entity after deducting all its liabilities
B. A 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
C. Decreases 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
D. Increases 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 : A

Question 9

What is the difference between the present value of defined benefit obligation and fair value of plan assets at the end of the reporting period called?

A. The financial position
B. The deficit or surplus
C. The discount
D. The present fair value

Answer : B

Question 10

When a company provides information that is of sufficient importance to influence the judgment and decisions of an informed user, which principle of Level 3 of the conceptual framework is being represented?

A. Faithful representation
B. Measurement
C. Full disclosure
D. Going concern

Answer : C

Question 11

Which of the following most accurately describes the overall objective of financial reporting?

A. Provide information that is useful for decision making
B. Enable International Accounting Standards Board (IASB) to issue more useful and consistent pronouncements
C. Enhance and organization’s financial consistency over time as Board members change
D. To classify an organization’s stakeholders as either internal or external information users

Answer : A

Question 12

What is the timing of revenue recognition?

A. When it is probable that future economic benefits will flow to the company and reliable measurement of the amount of revenue is possible
B. When the company reports current and non-current classifications in its statement of financial position
C. When economic benefits are received by the company and reliable measurement of the amount of revenue is possible
D. When users have sufficient reasonable knowledge of business and financial accounting matters to understand the information

Answer : A

Question 13

Which of the following are ingredients of the fundamental qualitative characteristics of faithful representation?

A. Complete, neutral, freedom from error
B. Assets, liabilities, equity
C. Predictive value, confirmatory value, relevance
D. Comparability, verifiability, timeliness

Answer : A

Question 14

IAS 19 requires that all numbers involved in accounting for defined benefit plans be presented as a single amount in the statement of financial position. What is this amount called?

A. Net defined benefit liability (asset)
B. Asset ceiling
C. Fair value
D. Net present value

Answer : A

Question 15

Level 2 of the conceptual framework of International Accounting Standards Board (IASB) identifies qualitative characteristics of accounting information. These characteristics distinguish more useful information from less useful information.
To what end is this distinction useful?

A. For reporting purposes
B. For business strategy
C. For decision-making purposes
D. For organizational vision

Answer : C

International Financial Reporting Standards for Compensation Professionals Exam v7.0

Question 1

Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

Question 10

Question 11

Question 12

Question 13

Question 14

Question 15

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