SCI

• What is the purpose of reporting comprehensive income?

  
  

  a. To report transactions with owners

  b. To report a measure of overall entity performance

  c. To replace net income with a better measure

  d. To combine income from continuing operations with income from discontinued operations

  b. To report a measure of overall entity performance
• Which of the following is not an acceptable option of reporting other comprehensive income?

  
  

  a. In a separate statement of comprehensive income

  b. In a single statement of comprehensive. income

  c. in the notes to financial statements

  d. In a statement of changes in equity

  c. in the notes to financial statements
• When a complete set of financial statements is presented, comprehensive income and the components should

  
  

  a. Appear as a part of discontinued operations

  b. Be reported net of related income tax effect, in total and

  individually

  c. Appear in a supplemental schedule in the notes.

  d. Be displayed in a statement that has the same prominence as other financial statements.

  d. Be displayed in a statement that has the same prominence as other financial statements.
• Why is reclassification adjustment used when reporting other comprehensive income?

  
  

  a. . To reclassify an item of comprehensive income as another item of comprehensive income

  b. To avoid double counting of items

  c. To make net income equal comprehensive income

  d. To adjust the income tax effect of OCI

  b. To avoid double counting of items
• The components OCI include all, except

  
  

  a. Unrealized gain on derivative contract designated as cash flow hedge

  b. Loss from translating the financial statements of a foreign operation

  c. Actuarial gain on defined benefit plan

  d. Dividend paid to shareholders

  d. Dividend paid to shareholders
• Which is not a component of OCI?

  
  

  a. Foreign currency translation adjustment

  b. Unrealized gain on financial asset held for trading

  c. Deferred loss on derivative financial instrument designated as cash flow hedge

  d. c. Change in revaluation surplus

  b. Unrealized gain on financial asset held for trading
• Which is not a component of OCI?

  
  

  a. Remeasurement of defined benefit plan

  b. Treasury share at cost

  c. Foreign currency translation adjustment

  d. Unrealized gain on equity investment measured at FVOCI

  b. Treasury share at cost
• Which of the following options for displaying other comprehensive income is preferred?

  
  

  a. A continuation from net income in the income statement

  b. A separate statement that begins with net income

  c. In the statement of changes in equity

  d. A continuation from net income in the income statement or a separate statement that begins with net income

  d. A continuation from net income in the income statement or a separate statement that begins with net income
• How should exchange gain or loss resulting from foreign currency transactions be accounted for?

  
  

  a. Included as a component of income from continuing operations for the period in which the rate changes.

  b. included as a component of other comprehensive income

  for the period in which the rate changes.

  c. Included in the statement of financial position

  d. included in net income for gain but deferred for loss

  a. Included as a component of income from continuing operations for the period in which the rate changes.
• Unusual and infrequent gain and loss should be reported

  
  

  a. As an extraordinary item net of tax below income from continuing operations

  b. . As an extraordinary item net of tax within income from continuing operations.

  c. As a separate line item within income from continuing

  operations but not net of applicable income tax.

  d. As a separate line item within income from continuing operations net of applicable income tax.

  c. As a separate line item within income from continuing

  operations but NOT net of applicable income tax.
• The term comprehensive income

  
  

  a. Must be reported on the face of the income statement

  b. Includes all changes in equity except those resulting from investments by and distributions to owners.

  c. Is the net change in owners' equity for the period

  d. c. Is synonymous with the term net income.

  b. Includes all changes in equity except those resulting from investments by and distributions to owners.
• Al] of the following components of other comprehensive income are reclassified to profit or loss, except

  
  

  a. a. Gain from translating the financial statements of a foreign operation

  b. Loss from remeasuring debt investment at FVOCI

  c. The effective portion of gain or loss on hedging instrument in a cash flow hedge

  d. Gain on measuring equity investment at FVOCI

  d. Gain on measuring equity investment at FVOCI
• Which component of other comprehensive income should be reclassified to retained earnings?

  
  

  a. Revaluation surplus

  b. Remeasurement of defined benefit plan

  c. . Change in fair value attributable to credit risk of financial liability designated at FVOCI

  d. All of these components of OCI should be reclassified to retained earnings

  d. All of these components of OCI should be reclassified to retained earnings
• Earnings

  
  

  a. Include certain gains excluded from comprehensive Income

  b. Are the same as comprehensive income

  c. Exclude certain gains and losses included in comprehensive income

  d. Include certain gains and losses excluded from comprehensive income

  b. Are the same as comprehensive income
• The two-statement approach of presenting comprehensive income is preparing

  
  

  a. A comparative statement of comprehensive income

  b. A combined statement of comprehensive income and retained earnings

  c. A combined income statement and a statement of changes in equity

  d. A separate income statement and a separate statement of comprehensive income


  d. A separate income statement and a separate statement of comprehensive income
• An entity shall present an analysis of expenses using a classification based on

  
  

  a. The nature of expenses.

  b. The function of expenses.

  c. Either the nature of expenses or the function of expenses, whichever provides information that is reliable and more relevant.

  d. Either the nature of expenses or the function of

  expenses, whichever the entity would prefer to present.

  c. Either the nature of expenses or the function of expenses, whichever provides information that is reliable and more relevant.
• Separate line items in an analysis of expenses by NATURE

  include

  
  

  a. Purchases, transport costs, employee benefits, ' depreciation, extraordinary items

  b. Purchases, distribution costs, administrative costs, employee benefits, depreciation, taxes

  c. Depreciation, purchases, transport costs. employee benefits and advertising costs

  d. Cost of goods sold, administrative and distribution costs


  c. Depreciation, purchases, transport costs. employee benefits and advertising costs
• Separate line items in an analysis of expenses by FUNCTIONinclude

  
  

  a. Purchases, transport costs, employee benefits, depreciation, extraordinary items

  b. Purchases, distribution costs, administrative costs, employee benefits, depreciation, taxes

  c. Depreciation, purchases, transport costs, employee benefits, and advertising costs.

  d. Cost of goods sold, administrative and distribution costs

  d. Cost of goods sold, administrative and distribution costs
• Under IFRS, the extraordinary item presentation

  
  

  a. Has not changed from current rules.

  b. Has been eliminated.

  c. Has been eliminated from the net of tax presentation.

  d. Has been eliminated from EPS reporting.

  b. Has been eliminated.
• The income statement reveals

  
  

  a. Resources and equity at a point in time.

  b. Resources and equity for a period of time

  c. Net earnings at a point in time.

  d. Net earnings for a period of time.

  d. Net earnings for a period of time.
• Conceptually, net income is a measure of

  
  

  a. Wealth

  b. Change of wealth

  c. Capital maintenance

  d. Cash flow

  b. Change of wealth
• Which term cannot be used to describe a line item in the statement of comprehensive income?

  
  

  a. Revenue

  b. Gross income

  c. Income before tax

  d. Extraordinary

  d. Extraordinary
• Comprehensive income includes all, except

  
  

  a. Revenue and gain

  b. Expense and loss

  c. Preference share dividend

  d. Unrealized gain and loss on derivative contract

  c. Preference share dividend
• Comprehensive income includes all, except

  
  

  a. Dividend revenue

  b. Loss on disposal of asset

  c. Investment by owners

  d. Unrealized gain on trading investment

  c. Investment by owners
• Income determination is arrived at by

  
  

  a. Measuring the change in owners' equity

  b. Identifying the change in the purchasing power

  c. Using a transaction approach

  d. Applying the value added concept


  c. Using a transaction approach
• Net income equals

  
  

  a. Assets minus liabilities

  b. Revenue minus cost of goods sold

  c. Revenue minus expenses

  d. Cash receipts minus cash payments

  c. Revenue minus expenses
• Comprehensive income always

  
  

  a. Is the same as net income

  b. Is greater than net income

  c. Is less than net income

  d. Could be greater than or less than net income.

  d. Could be greater than or less than net income.
• Gains are

  
  

  a. Inflows from selling a product to a customer

  b. Increases in equity resulting from transfers of assets in the entity from owners

  c. Increases in equity from peripheral transactions

  d. All of these can be considered gains

  c. Increases in equity from peripheral transactions
• Change in equity from nonowner sources is

  
  

  a. Comprehensive income

  b. Revenue

  c. a. Expense

  d. a. Gain or loss