Topic: Regulatory Environment of Accounting

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FA – May 2012 – L1 – SA – Q34 – Regulatory Environment of Accounting

Identifying the process where progress billings for payments exceed the revenue recognized in IAS for construction contracts.

Question

In accordance with International Accounting Standard (IAS) on construction contract, the process where the rate of progress billings for payment is higher than those utilized for revenue recognition is ……………………………..

Answer

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Tags: Construction Contracts, IAS, Revenue Recognition
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2012

FA – May 2012 – L1 – SA – Q4 – Regulatory Environment of Accounting

Identifying the function of the Financial Reporting Council of Nigeria.

Question

Which of the following is NOT a function of the Financial Reporting Council of Nigeria?

A. Promoting and enforcing compliance with the accounting standards developed by the Board
B. Developing and publishing in the public interest accounting standards to be observed in the preparation of financial statements
C. Advising State Governments on matters relating to accounting standards
D. Receiving notices of non-compliance with its standards from the preparer
E. Advising the Minister on making of regulations under Section 356 of Companies and Allied Matters, Cap C20, LFN 2004

Answer

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Tags: Accounting Standards, Financial Reporting Council, Nigerian Accounting Laws
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2012

FA – Nov 2011 – L1 – SB – Q6 – Recording Financial Transactions

This question requires the journal entries to record consignment transactions.

Question

The following transactions were recorded in the books of Fadep Enterprises:

(i) On 1 October 2010, Fadep Enterprises sent goods worth N160,000 on consignment to Associate Enterprises and incurred expenses on transportation and loading of N4,800 and N1,200 respectively.
(ii) On 7 October 2010, Associate Enterprises received the consignment and paid N80,000 into the bank account of Fadep Enterprises.
(iii) On 31 October 2010, Associate Enterprises prepared and sent an Account Sales to Fadep Enterprises having made sales of N180,000. The remaining goods on hand were valued at N16,000 at original cost.
(iv) Associate Enterprises deducted 2.5% as commission and off-loading expenses of N2,000.
(v) On 5 November 2010, Associate Enterprises sold the remaining goods for N20,000.

You are required to:
(a) Prepare the journal entries with narration to record the above transactions in the books of Fadep Enterprises. (13 marks)
(b) State TWO principal differences between goods on consignment and sale of goods. (2 marks)

Answer

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Tags: Consignment Accounting, Journal Entries
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2011

FA – Nov 2011 – L1 – SB – Q2c – Regulatory Environment of Accounting

This question asks about the different types of construction contract pricing.

Question

Write short notes on the different types of construction contract pricing

Answer

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Tags: Construction Contracts, Pricing
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2011

FA – Nov 2011 – L1 – SB – Q2b – Regulatory Environment of Accounting

This question asks for the definition of construction contracts according to SAS 5.

Question

Define “Construction Contracts” in accordance with SAS 5.

Answer

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Tags: Construction Contracts, SAS
Level: Level 1

Topic: Regulatory Environment of Accounting

FA – Nov 2011 – L1 – SB – Q2a – Regulatory Environment of Accounting

This question asks for the SAS relating to construction contracts.

Question

Which Statement of Accounting Standard (SAS) is on Construction Contract?

Answer

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Tags: Construction Contracts, SAS
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q1 – Regulatory Environment of Accounting

This question tests knowledge on what legally brings a company into existence.

Question

Which of the following brings a company into legal existence?
A. Memorandum of Association
B. Articles of Association
C. Companies and Allied Matters Act Cap C20 LFN 2004
D. Certificate of Incorporation
E. Corporate Affairs Commission

Answer

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Tags: Certificate of Incorporation, Company Law, Memorandum of Association
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2011

FA – Nov 2012 – L1 – SB – Q2 – Regulatory Environment of Accounting

Explain the conceptual framework under IFRS and discuss accounting concepts and definitions of assets and liabilities.

Question

a. Explain the term “Conceptual Framework” in relation to International Financial Reporting Standards (IFRS). (4 Marks)

b. Define Assets and Liabilities. (2 Marks)

c. The International Accounting Standards Board’s framework for the preparation of financial statements requires that entities should comply with certain accounting concepts and underlying assumptions which include:

i. Substance over form;
ii. Materiality;
iii. Comparability; and
iv. Going concern.

Explain briefly the meaning of these concepts. (4 Marks)

d. Discuss the information needs of the following users of a company’s financial statements:
i. Lenders;
ii. Suppliers;
iii. Customers;
iv. Employees;
v. Government and its agencies. (5 Marks)

Answer

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Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2012

FA – Nov 2012 – L1 – SB – Q37 – Regulatory Environment of Accounting

Define the offer of company shares to a select group of individuals.

Question

The offer of shares of a company to a group of selected persons is called?

Answer

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Tags: Equity, Private placement, Shares
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2012

FA – May 2013 – L1 – SB – Q4 – Regulatory Environment of Accounting

Prepare the Statement of Profit or Loss

Question

The following balances were extracted from the accounting records of the partnership of David and Daniel as at 30 April 2013:

You are required to:
Prepare the Statement of Profit or Loss of the partnership for the year ended 30April 2013, in a vertical format.

Answer

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Tags: Depreciation, Inventory, Law of Partnership, Partnership
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2013

FA – Nov 2013 – L1 – SA – Q6 – Regulatory Environment of Accounting

Understanding what GAAP refers to.

Question

The “generally accepted accounting practice” (GAAP) refers to:

A. Complete set of regulations from all sources together with any general accounting principles and conventions
B. Only the principles and conventions that are enshrined in companies’ legislations
C. The accounting regulations which apply to large companies
D. Financial accounting which is concerned with reporting financial results in aggregates to a variety of users
E. Legislation which generally sets out the broad rules with which companies must comply when preparing financial statements

Answer

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Tags: Accounting principles, Accounting Standards, GAAP
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2013

FA – Nov 2014 – L1 – SA – Q14 – Regulatory Environment of Accounting

Identifying the content of a memorandum of association in a limited liability company.

Question

Which of the following is ONE of the contents of the memorandum of association of a limited liability company?

A. The transfer and transmission of shares
B. The voting rights of members
C. The borrowing powers of the company
D. The object clause of the company
E. The appointment and powers of Managing Director

Answer

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Tags: Corporate Law, Memorandum of Association, Regulatory Compliance
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2014

FA – May 2021 – L1 – SB – Q1b – Regulatory Environment of Accounting

Definition and purpose of accounting standards in financial reporting.

Question

i. What is accounting standards? (2 Marks)
ii. Explain the purpose of accounting standards (4 Marks)

Answer

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Tags: Accounting Standards, Purpose of Standards
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2021

FA – May 2021 – L1 – SA – Q15 – Regulatory Environment of Accounting

Identify changes that are considered accounting estimates under IAS 8.

Question

In accordance with IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors, which of the following is considered a change in accounting estimates?

i. Changing the useful life of an asset
ii. Changing from cost model to revaluation model
iii. Change in the allowances for doubtful receivables
iv. Change from FIFO to weighted average for valuation of inventory

A. I and II
B. I and III
C. II and III
D. II and IV
E. III and IV

Answer

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Tags: Accounting estimates, Accounting Policies, IAS 8
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2021

FA – Nov 2023 – L1 – SB – Q5B -Regulatory Environment of Accounting

Explain the distinction between accounting policies and accounting estimates as per IAS 8.

Question

Explain the distinction between accounting policies and accounting estimates in accordance with IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors.

Answer

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Tags: Accounting estimates, Accounting Policies, Financial Reporting, IAS 8
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: NOV 2023

FA – Nov 2023 – L1 – SA – Q12 – Regulatory Environment of Accounting

Identify disclosure requirements for property, plant, and equipment under IAS 16.

Question

In the notes to the financial statements, which of the following is NOT required to be disclosed regarding property, plant and equipment under IAS 16?

A. The fair value of the assets at the beginning and end of the period
B. The current market value of the assets at the end of the period
C. The gross carrying amounts and accumulated depreciation at the beginning and end of the period
D. The expected useful lives of the assets and their residual values
E. The total amount of additions made to the property, plant and equipment during the year

Answer

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Tags: Disclosure Requirements, IAS 16, Plant and Equipment, Property
Level: Level 1

Topic: Regulatory Environment of Accounting

FA – May 2023 – L1 – SB – Q3b – Regulatory Environment of Accounting, IAS 8

Defining accounting policies and changes in accounting estimates with examples, and outlining the required accounting treatment.

Question

IAS 8 deals with the measurement, recognition, and disclosure of accounting policies, changes in accounting estimates, and correction of prior period errors.

i. Define an accounting policy and change in accounting estimates, with TWO examples each. (6 Marks)

ii. Outline the accounting treatments required to record a change in accounting estimates. (2 Marks)

Answer

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Tags: Accounting estimates, Accounting Policies, IAS 8, Prior Period Errors
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2023

FA – May 2016 – L1 – SA – Q20 – Regulatory Environment of Accounting

Identifying which activity is not an investing activity under IAS 7.

Question

Which of the following will NOT be regarded as an investing activity in relation to IAS 7 statement of cash flows?
A. Dividend received
B. Cash paid to acquire property, plant and equipment
C. Cash paid to acquire equities in other entities
D. Cash payment to supplier of goods and services
E. Proceeds from sale of property, plant and equipment

Answer

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Tags: Cash Flow, IAS 7, Investing Activities, Statement of Cash Flows
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2016

FA – May 2024 – L1 – SA – Q9 – Regulatory Environment of Accounting

Identifies the importance of recording transactions based on substance rather than legal form.

Question

Why is it important to record the substance of transactions rather than just their legal form in financial statements?

A. Legal principles are often complex and difficult to apply in accounting.
B. Financial statements must comply with tax regulations, not legal principles.
C. The legal form of transactions does not accurately represent their financial impact.
D. Recording transactions based on their legal form is easier and more straightforward.
E. Accountants prefer to use financial substance rather than legal form for simplicity.

Answer

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Tags: Accounting principles, Financial Reporting, Substance Over Legal Form
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2024

FA – Mar/July 2020 – L1 – SA – Q14 – Regulatory Environment of Accounting

Identifying non-objective of IASB

Question

Which of the following is NOT an objective of the International Accounting Standards Board (IASB)?
A. Review of accounting standards
B. Promotion of the use of accounting standards
C. Promoting application of the accounting standards
D. Convergence of international accounting standards
E. Preparation of the financial statements in line with the requirement of IASB framework

Answer

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Tags: Accounting Standards, Financial Reporting, IASB
Level: Level 1