Question

PAS #01- Presentation of Financial Statements
This comprises all "non-owner changes in equity". It excludes the owner changes in equity such as;
subscription, issuance, and reacquisition of share capital and declaration of dividends.
a)	Other Comprehensive Income	c)	Total Other Comprehensive Income
b)	Changes in equity	d)	Profit or Loss

The bottom part of each of Entity A's financial statements states the following, "This statement should be read in
conjunction with the accompanying notes" . This is most likely an application of which of the following concepts?
a)	Articulation	c)	Relevance
b)	Consistency	d)	Disclosure

PAS #02- Inventories
10	The cost of the inventory should not include…
		I	Purchase price, net of trade discount
		II	Import duties and other taxes
		III	Abnormal amounts of wasted materials

IV	Administrative overhead
V	Fixed and variable production overhead
Vi	Selling costs

Which of the following concepts is violated when measuring inventories at the lower of cost and NRV.
a)	Offsetting concept
b)	Historical cost concept
c)	Prudence or conservatism concept
d)	The concept that assets shall not be carried at an amount in excess of its recoverable amount.

Entity A buys and sells unique artifacts. Entity A should apply the cost method according to PAS#2 as…
a)	Specific identification	c)	FIFO costing
b)	Weighted Average	d)	Any cost method allowed by PAS#2

Answer 1

Answer to the first question is C as all non-owner changes in equity are required to be presented in one statement or in two statements of comprehensive income (a separate income statement ).

Answer to the second question is D as disclosure principle implies that all information should be disclosed that are material that is which can affect the decision of the investor. Hence, notes to accounts are made.

Answer to the third question :The cost of inventory does not include the abnormal wastage material(iii), administrative overhead(iv), and selling cost (vi).

Answer to the fourth question is A offsetting concept as it states that all should be at net basis.