Question Tag: Classification

Search 500 + past questions and counting.

CR – May 2017 – L3 – Q6b – Financial Instruments (IFRS 9, IAS 32, IAS 39)

Distinguish between liability and equity under IAS 32 with examples.

Question

It is important for entities to understand and properly classify their financial instruments. This is because some financial instruments may have features of both debt and equity, which can lead to inconsistency in reporting. To this end, financial reporting standards provide guidance on the difference between financial instruments classified as equity and liabilities.

Required:
With relevant examples, distinguish between liability and equity under IAS 32: Financial Instruments Presentation. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Equity, Financial instruments, IAS 32, Liability
Level: Level 3

FR – May 2017 – L2 – SB – Q5 – Preparation of Financial Statements

Discuss distinguishing features of debt and equity presentation under IFRS and explain the impact of classification on financial statements.

Question

The difference between debt and equity in an entity’s statement of financial position is not easily distinguishable for preparers of financial statements. Debts and equity financial instruments may have similar characteristics, which may lead to inconsistency of reporting.

Required:

Discuss the main distinguishing features in the presentation of debt and equity under International Financial Reporting Standards (IFRS) with clear examples.
(10 Marks)
Explain why it is important for entities to understand the impact of the classification of a financial instrument as debt or equity in the financial statement.
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Consistency, Debt, Equity, Financial instruments, IFRS, Presentation
Level: Level 2

Topic: Preparation of Financial Statements
Series: MAY 2017

FA – Nov 2012 – L1 – SB – Q31 – Partnership Accounts

Classify the figure in the statement of financial position as current liabilities or otherwise.

Question

The balances extracted from the accounting records of Disney Social Club in respect of its subscriptions are as follows:

Balance b/f 1 January 2011: N40,000
Balance b/f 1 January 2011: (N30,000)
Subscriptions received during the year: N160,000
Balance c/f 31 December 2011: N60,000
Balance c/f 31 December 2011: (N50,000)

How would the figure in brackets at 31 December 2011 be classified in the Statement of Financial Position?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Financial Statements, Statement of Financial Position, Subscription
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2012

FA – May 2018 – L1 – SB – Q6a – Recording Financial Transactions

Explains the chart of accounts and its usefulness in recording transactions.

Question

Explain chart of accounts and its usefulness.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Chart of Accounts, Classification, Financial Statements
Level: Level 1

MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications

Identify the purpose that is not part of cost codes.

Question

Which of the following is NOT part of the main purposes of cost codes?

A. Reduces clerical work
B. Facilitates electronic data processing
C. Facilitates a good costing system
D. Facilitates logical and systematic arrangement of costing records
E. Facilitates control

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Cost Control, Costing, Systematic Arrangement
Level: Level 1

Topic: Cost Classifications
Series: NOV 2021

FA – Nov 2019 – L1 – SB – Q2c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Classify expenditure for plant into capital and revenue.

Question

c. Ahmed Ventures Ltd acquired an item of plant from Judexco Machine Ltd to facilitate its operations.

The schedule of expenditure for the plant is given below:

Expenditure Item	N’000	%
Purchase price	480,000	100%
Trade discount applicable to the purchase price	8%
Early settlement discount on the payable amount	5%
Freight charges	25,000
Pre-production testing cost	15,000
One-year maintenance contract	12,000
Staff cost in relation to the use of the machine	8,000
Electrical installation cost	19,000
Concrete reinforcement	9,000
Cost of correcting installation error	17,000
Dismantling and restoration cost	20,000
Staff training in the use of the plant	14,000

Required:
Using the format provided below, classify the above plant costs into capital and revenue expenditure respectively. (14 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Expenditure, Classification, IAS 16, PPE, Revenue Expenditure
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2019

FA – May 2016 – L1 – SB – Q6 – Elements of Financial Statements

Classify various expenditures as revenue or capital and their impact on financial statements and non-current asset register.

Question

Given below are items of “Revenue” and “Capital” expenditure:

(i) A number of new cars that had recently been cleared by a motor car dealing company.

(ii) Two new motor boats acquired by a ferry service agency.

(iii) Vacant houses owned by an estate developing company in respect of which negotiations are ongoing for assistance for their sale to prospective landlords.

(iv) New buildings acquired for the purpose of holding the items of plant and machinery belonging to a detergent manufacturing company.

(v) Cost of acquiring a leasehold property for office use.

(vi) Granites purchased by an engineering contractor for use at a construction site.

(vii) Cost of rehabilitating a dilapidated housing unit owned by an estate developer.

(viii) Repairs to plant and machinery in a manufacturing company.

Required:

a. For each of the above, state whether it is a “Revenue” or “Capital” expenditure. (4 Marks)

b. State how each will be recognised in the statement of profit or loss and the statement of financial position as the case may be. (12 Marks)

c. State how the non-current assets register will be affected by any of the transactions. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Expenditure, Classification, Expenditure Recognition, Financial Statements, Non-current Assets, Revenue Expenditure
Level: Level 1

Topic: Elements of Financial Statements
Series: MAY 2016

CR – Nov 2019 – L3 – Q2b – IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations

Discuss the criteria for classifying an operation as discontinued and the accounting treatment involved.

Question

b) IFRS 5: Non-current Assets Held for Sale and Discontinued Operations sets out the principles governing the measurement and presentation of non-current assets that are expected to be realised through sale rather than through continuing use. The standard also deals with reporting the results of operations that qualify as discontinued operations.

Required:
Identify TWO (2) conditions which must be present in order to present the results of an operation as “discontinued” and the accounting treatment that applies when such a classification is deemed appropriate.

(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Discontinued Operations, IFRS 5
Level: Level 3

Topic: IFRS 5: Non-current assets held for sale and discontinued operations
Series: NOV 2019

CR – May 2017 – L3 – Q6b – Financial Instruments (IFRS 9, IAS 32, IAS 39)

Distinguish between liability and equity under IAS 32 with examples.

Question

Required:
With relevant examples, distinguish between liability and equity under IAS 32: Financial Instruments Presentation. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Equity, Financial instruments, IAS 32, Liability
Level: Level 3

FR – May 2017 – L2 – SB – Q5 – Preparation of Financial Statements

Discuss distinguishing features of debt and equity presentation under IFRS and explain the impact of classification on financial statements.

Question

Required:

Discuss the main distinguishing features in the presentation of debt and equity under International Financial Reporting Standards (IFRS) with clear examples.
(10 Marks)
Explain why it is important for entities to understand the impact of the classification of a financial instrument as debt or equity in the financial statement.
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Consistency, Debt, Equity, Financial instruments, IFRS, Presentation
Level: Level 2

Topic: Preparation of Financial Statements
Series: MAY 2017

FA – Nov 2012 – L1 – SB – Q31 – Partnership Accounts

Classify the figure in the statement of financial position as current liabilities or otherwise.

Question

The balances extracted from the accounting records of Disney Social Club in respect of its subscriptions are as follows:

Balance b/f 1 January 2011: N40,000
Balance b/f 1 January 2011: (N30,000)
Subscriptions received during the year: N160,000
Balance c/f 31 December 2011: N60,000
Balance c/f 31 December 2011: (N50,000)

How would the figure in brackets at 31 December 2011 be classified in the Statement of Financial Position?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Financial Statements, Statement of Financial Position, Subscription
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2012

FA – May 2018 – L1 – SB – Q6a – Recording Financial Transactions

Explains the chart of accounts and its usefulness in recording transactions.

Question

Explain chart of accounts and its usefulness.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Chart of Accounts, Classification, Financial Statements
Level: Level 1

MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications

Identify the purpose that is not part of cost codes.

Question

Which of the following is NOT part of the main purposes of cost codes?

A. Reduces clerical work
B. Facilitates electronic data processing
C. Facilitates a good costing system
D. Facilitates logical and systematic arrangement of costing records
E. Facilitates control

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Cost Control, Costing, Systematic Arrangement
Level: Level 1

Topic: Cost Classifications
Series: NOV 2021

FA – Nov 2019 – L1 – SB – Q2c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Classify expenditure for plant into capital and revenue.

Question

c. Ahmed Ventures Ltd acquired an item of plant from Judexco Machine Ltd to facilitate its operations.

The schedule of expenditure for the plant is given below:

Expenditure Item	N’000	%
Purchase price	480,000	100%
Trade discount applicable to the purchase price	8%
Early settlement discount on the payable amount	5%
Freight charges	25,000
Pre-production testing cost	15,000
One-year maintenance contract	12,000
Staff cost in relation to the use of the machine	8,000
Electrical installation cost	19,000
Concrete reinforcement	9,000
Cost of correcting installation error	17,000
Dismantling and restoration cost	20,000
Staff training in the use of the plant	14,000

Required:
Using the format provided below, classify the above plant costs into capital and revenue expenditure respectively. (14 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Expenditure, Classification, IAS 16, PPE, Revenue Expenditure
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2019

FA – May 2016 – L1 – SB – Q6 – Elements of Financial Statements

Classify various expenditures as revenue or capital and their impact on financial statements and non-current asset register.

Question

Given below are items of “Revenue” and “Capital” expenditure:

(i) A number of new cars that had recently been cleared by a motor car dealing company.

(ii) Two new motor boats acquired by a ferry service agency.

(iii) Vacant houses owned by an estate developing company in respect of which negotiations are ongoing for assistance for their sale to prospective landlords.

(iv) New buildings acquired for the purpose of holding the items of plant and machinery belonging to a detergent manufacturing company.

(v) Cost of acquiring a leasehold property for office use.

(vi) Granites purchased by an engineering contractor for use at a construction site.

(vii) Cost of rehabilitating a dilapidated housing unit owned by an estate developer.

(viii) Repairs to plant and machinery in a manufacturing company.

Required:

a. For each of the above, state whether it is a “Revenue” or “Capital” expenditure. (4 Marks)

b. State how each will be recognised in the statement of profit or loss and the statement of financial position as the case may be. (12 Marks)

c. State how the non-current assets register will be affected by any of the transactions. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Expenditure, Classification, Expenditure Recognition, Financial Statements, Non-current Assets, Revenue Expenditure
Level: Level 1

Topic: Elements of Financial Statements
Series: MAY 2016

CR – Nov 2019 – L3 – Q2b – IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations

Discuss the criteria for classifying an operation as discontinued and the accounting treatment involved.

Question

(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Classification, Discontinued Operations, IFRS 5
Level: Level 3

Topic: IFRS 5: Non-current assets held for sale and discontinued operations
Series: NOV 2019

Question Tag: Classification

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

CR – May 2017 – L3 – Q6b – Financial Instruments (IFRS 9, IAS 32, IAS 39)

Distinguish between liability and equity under IAS 32 with examples.

You're reporting an error for "CR – May 2017 – L3 – Q6b – Financial Instruments (IFRS 9, IAS 32, IAS 39)"

FR – May 2017 – L2 – SB – Q5 – Preparation of Financial Statements

Discuss distinguishing features of debt and equity presentation under IFRS and explain the impact of classification on financial statements.

You're reporting an error for "FR – May 2017 – L2 – SB – Q5 – Preparation of Financial Statements"

FA – Nov 2012 – L1 – SB – Q31 – Partnership Accounts

Classify the figure in the statement of financial position as current liabilities or otherwise.

You're reporting an error for "FA – Nov 2012 – L1 – SB – Q31 – Partnership Accounts"

FA – May 2018 – L1 – SB – Q6a – Recording Financial Transactions

Explains the chart of accounts and its usefulness in recording transactions.

You're reporting an error for "FA – May 2018 – L1 – SB – Q6a – Recording Financial Transactions"

MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications

Identify the purpose that is not part of cost codes.

You're reporting an error for "MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications"

FA – Nov 2019 – L1 – SB – Q2c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Classify expenditure for plant into capital and revenue.

You're reporting an error for "FA – Nov 2019 – L1 – SB – Q2c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

FA – May 2016 – L1 – SB – Q6 – Elements of Financial Statements

Classify various expenditures as revenue or capital and their impact on financial statements and non-current asset register.

You're reporting an error for "FA – May 2016 – L1 – SB – Q6 – Elements of Financial Statements"

CR – Nov 2019 – L3 – Q2b – IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations

Discuss the criteria for classifying an operation as discontinued and the accounting treatment involved.

You're reporting an error for "CR – Nov 2019 – L3 – Q2b – IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations"

CR – May 2017 – L3 – Q6b – Financial Instruments (IFRS 9, IAS 32, IAS 39)

Distinguish between liability and equity under IAS 32 with examples.

You're reporting an error for "CR – May 2017 – L3 – Q6b – Financial Instruments (IFRS 9, IAS 32, IAS 39)"

FR – May 2017 – L2 – SB – Q5 – Preparation of Financial Statements

Discuss distinguishing features of debt and equity presentation under IFRS and explain the impact of classification on financial statements.

You're reporting an error for "FR – May 2017 – L2 – SB – Q5 – Preparation of Financial Statements"

FA – Nov 2012 – L1 – SB – Q31 – Partnership Accounts

Classify the figure in the statement of financial position as current liabilities or otherwise.

You're reporting an error for "FA – Nov 2012 – L1 – SB – Q31 – Partnership Accounts"

FA – May 2018 – L1 – SB – Q6a – Recording Financial Transactions

Explains the chart of accounts and its usefulness in recording transactions.

You're reporting an error for "FA – May 2018 – L1 – SB – Q6a – Recording Financial Transactions"

MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications

Identify the purpose that is not part of cost codes.

You're reporting an error for "MI – Nov 2021 – L1 – SA – Q1 – Cost Classifications"

FA – Nov 2019 – L1 – SB – Q2c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

Classify expenditure for plant into capital and revenue.

You're reporting an error for "FA – Nov 2019 – L1 – SB – Q2c – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

FA – May 2016 – L1 – SB – Q6 – Elements of Financial Statements

Classify various expenditures as revenue or capital and their impact on financial statements and non-current asset register.

You're reporting an error for "FA – May 2016 – L1 – SB – Q6 – Elements of Financial Statements"

CR – Nov 2019 – L3 – Q2b – IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations

Discuss the criteria for classifying an operation as discontinued and the accounting treatment involved.

You're reporting an error for "CR – Nov 2019 – L3 – Q2b – IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations"

Our offerings

Contact Info

Customer

Get In Touch

admin