T7 Online Practice Questions and Answers

What is a constructive obligation?

A. When a company recognizes the expected cost of profit-sharing and bonus payments

B. When a company has no realistic alternative but to make payments

C. When a change in the company's informal practices would cause unacceptable damage to its relationship with employees

D. The required accounting entry for liabilities or accrued expenses or cash paid

Employee benefits provided in exchange for the end of an employee's employment are considered what kind of benefits?

A. Short-term benefits

B. Post-employment benefits

C. Termination benefits

D. Long-term benefits

In defined contribution plans when the contributions are not expected to be settled wholly before twelve months after the end of the reporting period, what must occur?

A. The employer must assume risk for the plan

B. Contributions must be discounted

C. Contributions must not be discounted

D. The employer must pay a specified amount to the employee

Paid annual leave and paid sick leave are examples of which kind of employee benefits?

A. Short-term benefits

B. Post-employment benefits

C. Termination benefits

D. Long-term benefits

What is the term that describes the outflows of assets or incurring of liabilities during a period as a result of delivering or producing goods and/or rendering services?

A. Period costs

B. Production costs

C. Cost of materials

D. Expenses

Which statement below most accurately describes a primary purpose of the International Accounting Standards Committee (IASC) Foundation?

A. Approves principles-based standards and informs International Accounting Standards Board (IASB) of implications of proposed standards

B. Oversees standards set for the public sector

C. Monitors International Accounting Standards Board (IASB)'s effectiveness, raise funds, approve budget, responsible for constitution

D. Provides advice to International Accounting Standards Board (IASB) on priorities

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

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

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

C. 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

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

The IAS 19 standard applies to which of the following groups of employees?

A. Directors and management personnel

B. All employees except casual employees

C. All employees

D. All full-time employees

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?

A. The employee value proposition

B. An expense

C. A benefit

D. A cost

What is the sum of current and noncurrent liabilities called?

A. Total cost

B. Current debt

C. Total expenses

D. Total liabilities