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  4. T7 - International Financial Reporting Standards for Compensation Professionals Exam

WorldatWork T7 International Financial Reporting Standards for Compensation Professionals Exam Exam Practice Test

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Total 89 questions
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International Financial Reporting Standards for Compensation Professionals Exam Questions and Answers

Question 1

One of the reasons preparers use the conceptual framework is to:

Options:

A.

Develop accounting policies in the absence of specific standards

B.

Document a historical record of all judgments

C.

Develop alternate interpretations of specific standards

D.

Encourage change to standards as Board members change

Question 2

The International Accounting Standards Board (IASB) has given companies the option to use fair value as the basis for measurement of financial assets and liabilities. Which of the following best defines fair value?

Options:

A.

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

B.

Faithful representation of the amount paid for a given item

C.

Amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction

D.

Quality of information that confirms users’ earlier expectations

Question 3

What are the two guiding principles of accrual accounting?

Options:

A.

Expense recognition and matching

B.

Revenue recognition and matching

C.

Revenue recognition and measurement

D.

Cost and materiality

Question 4

Neutral and complete are ingredients of which of the following fundamental characteristics of accounting information?

Options:

A.

Faithful representation

B.

Relevance

C.

Predictive value

D.

Comparability

Question 5

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?

Options:

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

Question 6

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?

Options:

A.

Faithful representation

B.

Measurement

C.

Full disclosure

D.

Going concern

Question 7

Which of the following is true of liabilities?

Options:

A.

Current liabilities come due in less than a year

B.

Current liabilities come due in less than 18 months

C.

Noncurrent liabilities come due in less than a year

D.

Both current and noncurrent liabilities come due in less than a year

Question 8

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

Options:

A.

Short-term benefits

B.

Post-employment benefits

C.

Termination benefits

D.

Long-term benefits

Question 9

What is one of the primary purposes of the International Accounting Standards Board (IASB)?

Options:

A.

To develop a single set of high quality and enforceable global accounting standards

B.

To align US standards and International Accounting Standards Board (IASB) standards

C.

To appoint Standards Advisory Council (SAC) members

D.

To monitor International Accounting Standards Board (IASB) effectiveness

Question 10

Why is faithful representation important in accounting documentation?

Options:

A.

It ensures neutrality on the part of the company’s accounting department

B.

It guarantees that all information is free from error

C.

It is useful if information represents what it purports to represent

D.

It indicates that accountants have confirmed all of the data

Question 11

Which of the following plans obliges an employer to pay a specified amount of benefits to the employee?

Options:

A.

Post-employment plan

B.

Defined contribution plan

C.

Defined benefit plan

D.

Bonus plan

Question 12

The economic activities of US-based Company XYZ is divided into 12-month periods for the purpose of issuing annual reports. Which basic assumption of accounting does this practice represent?

Options:

A.

Going concern

B.

Monetary unit

C.

Periodicity

D.

Economic entity

Question 13

When does a present obligation exist?

Options:

A.

When the employee renders service

B.

When the company has no realistic alternative but to make the payments

C.

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

D.

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

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Total 89 questions
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