41. How should inventories be subsequently measured?
● Cost model or fair value model
● Cost model or revaluation model
● Cost model
● lower of cost and net realizable value
42. An intangible asset is to be subsequently measured using:
● either the cost model or the fair value model
● either the cost model or the revaluation model
● either the fair value model or the revaluation model
● the cost model
43. Which of the following should not form part of the cost of an inventory?
● transport costs
● refundable import duties
● handling costs
● purchase price
44. Which of the following cost assignment methods is not allowed by PAS 2?
● Specific identification of cost
● Weighted average
● First in, First out
● Last in, First out
45. An entity shall classify a liability as non-current when:
● it expects to settle the liability in its normal operating cycle
● the liability is due to be settled within twelve months after the reporting period
● it holds the liability primarily for the purpose of trading
● it has an unconditional right to defer settlement of the liability for at least twelve months after the
reporting period
46. Which of the following statements is false?
● The income and related expenses of incidental operations of the development of an
intangible asset are usually recognized as part of the cost of the intangible asset.
● An intangible asset shall be measured initially at cost.
● No intangible asset arising from research or from the research phase of an internal
project shall be recognized.
● Internally generated brands, mastheads, publishing titles, customer lists and items similar in
substance shall not be recognized as intangible assets.
47. Which of the following statements is false?
● Cash payments to manufacture or acquire assets held for rental to others and subsequently held
for sale are cash flows from operating activities. T
● cash repayments of amounts borrowed are financing cash flows T
● cash advances and loans made by financial institutions are usually classified as financing
activities T
● Only expenditures that result in a recognised asset in the statement of financial position are
eligible for classification as investing activities.
48. Which of the following statements is true?
● An entity shall continue capitalization of borrowing costs during extended periods in which it
suspends active development of a qualifying asset.
● An entity shall cease capitalizing borrowing costs when substantially all the activities necessary to
prepare the qualifying asset for its intended use or sale are complete.
● An entity shall suspend capitalizing borrowing costs when a temporary delay is a necessary part
of the process of getting an asset ready for its intended use or sale.
● an entity normally suspends capitalizing borrowing costs during a period when it carries out
substantial technical and administrative work.
49. An entity shall not prepare financial statements on a going concern basis when:
I. management intends to liquidate
II. management intends to cease trading
III. the entity reports a net loss in the previous period.
● I and II
● I only
● I, II, and III
● I and III
50. Which of the following statements is false?
● The revision of an estimate relates to prior periods and is a correction of an error.T
● PFRSS are accompanied by guidance to assist entities in applying their requirements and a
guidance that is an integral part of the PFRS is mandatory.
● When it is difficult to distinguish a change in an accounting policy from a change in an accounting
estimate, the change is treated as a change in an accounting estimate. T
● The correction of a prior period error is excluded from profit or loss for the period in which the
error is discovered. T
●