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What is the purpose of charging depreciation in financial statements?

A

To allocate the cost of a non-current asset over the accounting periods expected to benefit from

its use

B

To ensure that funds are available for the eventual replacement of the asset

C

To reduce the cost of the asset in the statement of financial position to its estimated

D

To account for the ‘wearing-ouf of the asset over its life

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Chapter7Inventory

It is never B as funds are not set aside, nor C, this is revaluation, nor D - depreciation hasnothing to do with the wearing out

of assets, depreciation is an application of the matching concept and allocates the cost of the asset over the accounting

periods expected to benefit from its use.

多做几道

Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal

use?

A

The fair presentation concept

B

The accruals concept

C

The going concern concept

D

The business entity concept

Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal

use?

A

The fair presentation concept

B

The accruals concept

C

The going concern concept

D

The business entity concept

According to the IASB's Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful

representation?1 It is neutral2 It is relevant3 It is presented fairly4 It is free from material error

A

1 and 2

B

2 and 3

C

1 and 4

D

3 and4

Which of the following accounting concepts means that similar items should receive a similar accounting treatment?

A

Going concern

B

Accruals

C

Matching

D

Consistency

Listed below are some characteristics of financial information.1 Relevance2 Consistency3 Faithful representation4 Accuracy

Which of these are qualitative characteristics of financial information according to the IASB's Conceptual Framework for

Financial Reporting?

A

1 and 2 only

B

2 and 4 only

C

3 and 4 only

D

1 and 3 only

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