T7 International Financial Reporting Standards for Compensation Professionals Exam Questions and Answers

Historical cost is not objective

Historical cost is not particularly relevant to most readers

Historical cost is subject interpretation, and therefore to bias

Historical cost is not verifiable

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

Faithful representation of the amount paid for a given item

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

Quality of information that confirms users’ earlier expectations

For reporting purposes

For business strategy

For decision-making purposes

For organizational vision

Current liabilities come due in less than a year

Current liabilities come due in less than 18 months

Noncurrent liabilities come due in less than a year

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

When the employee renders service

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

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

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

Faithful representation

Measurement

Full disclosure

Going concern

Cost

Materiality

Expense

Disclosure

The employee value proposition

A long term benefit

A noncurrent expense

A liability

Total cost

Current debt

Total expenses

Total liabilities

Short-term benefits

Post-employment benefits

Termination benefits

Long-term benefits

Statement of full disclosure

Statement of assets

Statement of changes in shareholders’ equity

Statement of accrual accounting

Going concern

Monetary unit

Periodicity

Economic entity

Provides information about economic entities that is useful in making economic decisions

Provides guidance where conflicting interpretations have developed

Provides benchmark for judgments

Informs International Accounting Standards Board (IASB) of implications of proposed standards

Employees

Employers

Both employees and employers

Net interest on the net defined benefit liability (asset)

Time value of money

Current service cost

Actuarial gains and losses

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

A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants

Noncurrent expenses

Current liabilities

Non operating expenses

Operating expenses

Investing activities

Retained earnings

Expenses

Net income

Comparability

Relevance

Faithful representation

Verifiability

Neutral

Verifiability

Complete

Relevance

0.5% of profit

2.5% of profit

3% of profit

5.5% of profit

Short-term benefits

Post-employment benefits

Termination benefits

Long-term benefits

Noncurrent assets cannot be easily converted to cash within a year

Noncurrent assets are not affected by the fiscal year

Noncurrent assets cannot be easily converted to cash within two years

Noncurrent assets can only be converted to cash until the subsequent fiscal year