ACCA Strategic Business Reporting 2

Question 1

Under IFRS 15, at which step is the transaction price allocated across performance obligations?

Accepted Answer

Step 4

Answer

IFRS 15's five-step model allocates the transaction price to performance obligations at Step 4, based on relative standalone selling prices.

Question 2

Which standard governs the accounting for joint arrangements, distinguishing between joint operations and joint ventures?

Accepted Answer

IFRS 11

Answer

IFRS 11 replaced IAS 31 and distinguishes between joint operations (proportionate share of assets/liabilities) and joint ventures (equity method).

Question 3

Under IFRS 9, how are financial assets measured if they are held within a business model whose objective is to hold assets to collect contractual cash flows, and the cash flows are solely payments of principal and interest?

Accepted Answer

Amortized cost

Answer

Under IFRS 9, assets that pass both the business model test (hold to collect) and the SPPI test are measured at amortized cost.

Question 4

What is the effect of a stock dividend (bonus issue) on a company's statement of financial position?

Accepted Answer

Total equity remains unchanged but its composition changes

Answer

A bonus issue transfers an amount from retained earnings (or share premium) to share capital, leaving total equity unchanged.

Question 5

Which of the following is a characteristic of a defined benefit pension plan that distinguishes it from a defined contribution plan?

Accepted Answer

The employer bears the investment and actuarial risk

Answer

In a defined benefit plan, the employer bears the risk that investment returns or demographic assumptions may require additional funding to meet promised benefits.

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA - Association of Chartered Certified Accountants Practice Test

ACCA Strategic Business Reporting 2