Top 75 MCQs of FR

Jul 18, 2026

Uploaded by Theodora

A set of “Top 75 MCQs” focused on Financial Reporting and IFRS/IAS-related accounting topics. The questions cover areas such as IAS 20 treatment of government grants, IAS 2 valuation of inventories and work-in-progress, equity effects of different share/loan instruments, performance interpretation using ROCE, and recognition and measurement issues for decommissioning provisions and contingent liabilities in business combinations. It also includes consolidation and conceptual framework relevance and faithful representation tasks.

LanguageEnglish

CategoryExam

FormatPDF

Pages40

Reading Time1 h 41 min

AccessFree to download

Practice Questions

IAS 20 and Government Grants

IAS 2 Inventories and WIP Valuation

Equity Effects of Capital Instruments

ROCE Interpretation

Provisions and Decommissioning Discounting

Consolidation, Goodwill, and Non-controlling Interests

Conceptual Framework: Relevance vs Faithful Representation

Top 75 MCQs 1. SANJAY KUMAR MAHESWARI 1 | Top 75 MCQs
2. | | --- | | | | 3. | | | | SANJAY KUMAR MAHESWARI 2 | | Top 75 MCQs
4. | | --- | | | | 5.
Bandera Co held an investment property until 1 January 20X2 , when the use was changed to an owner-occupied property
The fair value model was applied to the investment property and its fair value at 31 October 20X1 was $7.1m. On the date of the change of use, the property's fair value was $8.6m and the remaining useful life was
16 years.
It is the company's policy to charge depreciation using the straight-line method, on a monthly basis
What, to the nearest $000, is the net effect of any required adjustments in Bandera Co's statement of profit or loss for the year ended 31 October 20X2?
A) $1,948,000 Cr
B) $1,052,000 Dr
C) $1,948,000 Dr
D) $1,052,000 Cr
SANJAY KUMAR MAHESWARI 3 | Top 75 MCQs 6. Which of the following statements is correct in accordance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance? A. 100% of grants related to income are recognized in profit or loss as soon as they have been awarded B. Grants related to income can only be recognized in profit or loss when the grant is received C. If a grant must be repaid it should be accounted for as a change in accounting policy D. Grants related to assets can either be deducted from the carrying amount of the asset or treated as deferred income 7. AT 31 July 20X2, Limpet Co had 200 items of work in progress (WIP) within inventories. The WIP cost a total of $18,000 to date. It estimated that the WIP would cost $16 per unit to complete and that each unit would then sell for $95 Direct selling costs are estimated at $3 per unit In accordance with IAS 2 Inventories, what is the correct value of Limpet Co's WIP as at 31 July 20X2? A $18,400 B $15.200 C $18,000 D $22,800 SANJAY KUMAR MAHESWARI 4 Top 75 MCQs 8. Which TWO of the following transactions will result in an increase to the equity section on the statement of financial position? A. 1 for 3 rights issue of equity shares B. Issue of ten-year 2% convertible loan notes C. Issue of ten-year 2% non-convertible loan notes D. 1 for 3 bonus issue of equity shares E. Issue of ten-year 2% redeemable preference shares 9. The finance director of a company has noticed that the return on capital employed (ROCE) for the last quarter of 20X0 was higher than the average for the year ended 31 December 20X0 Which TWO of the following would explain this? 􀁸 The company's business is seasonal, with higher sales and profitsin the second and fourth quarters 􀁸 The purchase and use of raw materials from a cheaper supplier from October 20X0 onwards 􀁸 An increase in the bank overdraft rate of interest with effect from November 20X0 􀁸 The purchase of land for future development financed by a loan in December 20X0 SANJAY KUMAR MAHESWARI 5 Top 75 MCQs 10. On 1 Febr

FAQs

Which option correctly applies IAS 20 to grants related to income and grants related to assets?

The correct choice is the one stating that grants related to assets may be deducted from the asset carrying amount or treated as deferred income, while the income-grant recognition follows IAS 20 requirements rather than assuming immediate profit or loss at award or only on receipt.

How is the value of work in progress (WIP) calculated under IAS 2 in the given scenario?

The WIP value under IAS 2 is based on cost and then adjusted using the relevant IAS 2 principle (net realizable value check). The answer options reflect alternative valuations for WIP as at 31 July 20X2.

What determines whether transactions increase the equity section on the statement of financial position?

Transactions that issue equity instruments (such as rights issues or bonus issues of equity shares) increase equity, while issuing loan notes does not, because it creates liability rather than equity.

Jul 18, 2026

Uploaded by Theodora