Financial Reporting MCQ Quiz in বাংলা - Objective Question with Answer for Financial Reporting - বিনামূল্যে ডাউনলোড করুন [PDF]
Last updated on Mar 7, 2025
Latest Financial Reporting MCQ Objective Questions
Top Financial Reporting MCQ Objective Questions
Financial Reporting Question 1:
Raik reported profit after tax for the period of $1,600,000 and it had one million ordinary shares in issue for the whole year.
Raik had a number of exercisable share options outstanding at the year end. Holders of the options were entitled to buy 50,000 new shares for $1.60. The average market price of Raik’s shares for the previous 12 months was $2.
In accordance with IAS 33 Earnings per Share, what is Raik’s diluted earnings per share?
Answer (Detailed Solution Below)
Financial Reporting Question 1 Detailed Solution
The correct option is option 3
Additional Information:
| Proceeds on issue of shares (50,000 × $1.60) | $80,000 |
| Divide by average market price | $2 |
| Assumed shares issued at average market price | 40,000 |
| Bonus element (50 − 40) | 10,000 |
| Earnings | $1,600,000 |
| Number of shares (1,000,000 + 10,000) | 1,010,000 |
| Diluted EPS | $1.58 |
Financial Reporting Question 2:
Comprehension:
Narayan has a year end of 31 December and operates a factory which makes computer chips for mobile phones. It purchased a machine on 1 July 20X3 for $80,000 which had a useful life of ten years and is depreciated on the straight-line basis, time apportioned in the years of acquisition and disposal. The machine was revalued to $81,000 on 1 July 20X4. There was no change to its useful life at that date.
A fire at the factory on 1 October 20X6 damaged the machine, leaving it with a lower operating capacity. The accountant considers that Narayan will need to recognise an impairment loss in relation to this damage and has ascertained the following information at 1 October 20X6:
(1) The carrying amount of the machine is $60,750.
(2) An equivalent new machine would cost $90,000.
(3) The machine could be sold in its current condition for a gross amount of $45,000. Dismantling costs would amount to $2,000.
(4) In its current condition, the machine could operate for three more years which gives it a value in use figure of $38,685.
On 1 July 20X7, it is discovered that the damage to the machine is worse than originally thought. The machine is now considered to be worthless and the recoverable amount of the factory as a cash-generating unit is estimated to be $950,000.
At 1 July 20X7, the cash-generating unit comprises the following assets:
In accordance with IAS 36 Impairment of Assets, what will be the carrying amount of Narayan’s plant
$ _____
Answer (Detailed Solution Below)
Financial Reporting Question 2 Detailed Solution
The correct option is option 1
Additional Information:
- The impairment loss of $220,000 ($1,170 – $950) is allocated: $35,000 to damaged plant and $85,000 to goodwill, the remaining $100,000 allocated proportionally to the building and the undamaged plant. The impairment to be allocated to the plant will be $37,500 ($100,000 × (300/(300+500))), leaving an amended carrying amount of the plant of $262,500 ($300,000 – $37,500).
Financial Reporting Question 3:
P has an 80% subsidiary S, which has been a subsidiary of P for the whole of the current year. S reported a profit after tax of $600,000 in its own financial statements. You ascertain that at the year-end there was unrealised profit of $60,000 on sales by S to P.
What is the non-controlling interest in S that would be reported in the consolidated statement of profit or loss and other comprehensive income of P for the year?
Answer (Detailed Solution Below)
Financial Reporting Question 3 Detailed Solution
The correct option is option 3.
Additional Information:
- NCI % × S’s PAT = 20% × $600k = $120k
- NCI% × PUP (S selling to P) = 20% × 60k = ($12k)
- Total NCI = $120k – $12k = $108k
Financial Reporting Question 4:
Each of the following events occurred after the reporting date of 31 March 20X5, but before the financial statements were authorised for issue.
Identify whether the events would represent adjusting or non-adjusting events.
| Adjusting | Non-adjusting | |
| 1) A public announcement in April 20X5 of a formal plan to discontinue an operation which had been approved by the board in February 20X5. | ||
| 2)The settlement of an insurance claim for a loss sustained in December 20X4. |
Answer (Detailed Solution Below)
Financial Reporting Question 4 Detailed Solution
The correct option is option 1
Additional information:
- A board decision to discontinue an operation does not create a liability. A provision can only be made on the announcement of a formal plan (as it then raises a valid expectation that the action will be carried out). As this announcement occurs during the year ended 31 March 20X6, this a non‐adjusting event for the year ended 31 March 20X5.
- The insurance claim was in existence at the year end, so this will be an adjusting event as it provides further evidence of conditions in existence.
Financial Reporting Question 5:
The information below relates to the financial statements of an entity as at 30 September 20X7.
| $ | |
| Carrying amount: | |
| Plant (cost less depreciation) | 110,000 |
| Land (original cost $200,000) | 280,000 |
| Tax base: | 90,000 |
| Plant | 200,000 |
| Land | |
| Tax rate | 20% |
| Deferred tax liability | 20,000 |
| Revaluation surplus | 64,000 |
The amount of the deferred tax liability is: CORRECT/INCORRECT
The amount of the revaluation surplus is: CORRECT/INCORRECT
Answer (Detailed Solution Below)
Financial Reporting Question 5 Detailed Solution
The correct option is option 1
Additional information:
Financial Reporting Question 6:
The following information has been extracted from the accounting records of Lois Co:
| $ | |
| Estimated income tax for the year ended 30 September 20X0 | $75,000 |
| Income tax paid for the year ended 30 September 20X0 | $80,000 |
| Estimated income tax for the year ended 30 September 20X1 | $83,000 |
What figures will be shown in the statement of profit or loss for the year ended 30 September 20X1 and the statement of financial position as at that date in respect of income tax?
| Options |
| $75,000 |
| $80,000 |
| $83,000 |
| $88,000 |
| Statement of profit or loss | Statement of financial position |
|
|
|
Answer (Detailed Solution Below)
Financial Reporting Question 6 Detailed Solution
The correct option is option 4
Additional Information:
- The tax expense in the statement of profit or loss is made up of the current year estimate and the prior year underprovision. The year‐end liability in the statement of financial position is made up of the current year estimate only.
- Tax expense = $83,000 + $5,000 underprovision from previous year = $88,000
- Tax liability = $83,000 year end estimate only.
Financial Reporting Question 7:
Aladin Co’s accounting records shown the following:
| $ | |
| Income tax payable for the year | 60,000 |
| Over provision in relation to the previous year | 4,500 |
| Opening provision for deferred tax | 2,600 |
| Closing provision for deferred tax | 3,200 |
What is the income tax expense that will be shown in the statement of profit or loss for the year?
Answer (Detailed Solution Below)
Financial Reporting Question 7 Detailed Solution
The correct option is option 4
Additional information:
- The tax expense in the statement of profit or loss is made up of the current year estimate, the prior year overprovision and the movement in deferred tax. The prior year overprovision must be deducted from the current year expense, and the movement in deferred tax must be added to the current year expense, as the deferred tax liability has increased.
- Tax expense = $60,000 – $4,500 + $600 = $56,100
- If you chose 1, you have deducted the movement in deferred tax, even though the liability has increased. If you chose 3 you have added the overprovision. If you chose 2 you have added the overprovision and the closing deferred tax liability.
Financial Reporting Question 8:
A manufacturing entity buys a machine (an item of property, plant and equipment) for 20 million dinars on 1 January 20X1. The machine is held under the cost model and has a useful life of 20 years. The entity has a reporting date of 31 December 20X1 and a functional currency of dollars ($). Exchange rates are as follows:
| Dinars: $1 | |
| 1 January 20X1 | 2.0 |
| 31 December 20X1 | 3.0 |
| Average rate for year-ended 31 December 20X1 | 2.5 |
What is the carrying amount of the machine as at 31 December 20X1?
Answer (Detailed Solution Below)
Financial Reporting Question 8 Detailed Solution
The correct option is option 3
Additional information:
- The machine is recorded in the functional currency using the spot rate, giving an initial value of $10 million (20m dinars/2). The machine is then depreciated over its useful life. By the reporting date, the carrying amount will be $9.5 million ($10m × 19/20). The machine is a non‐monetary item held under cost model so is not retranslated at the reporting date. If you selected answer A then you have translated the depreciation at the closing rate of exchange. If you selected answer 2 then you have translated depreciation at the average rate of exchange. If you selected answer 4 then you have retranslated the machine at the closing te of exchange.
Financial Reporting Question 9:
An entity took out a bank loan for 12 million dinars on 1 January 20X1. It repaid 3 million dinars to the bank on 30 November 20X1. The entity has a reporting date of 31 December 20X1 and a functional currency of dollars ($). Exchange rates are as follows:
| Dinars: $1 | |
| 1 January 20X1 | 6.0 |
| 30 November 20X1 | 5.0 |
| 31 December 20X1 | 5.6 |
What is the total loss arising (to the nearest $000) on the above transactions in the year ended 31 December 20X1?
Answer (Detailed Solution Below)
Financial Reporting Question 9 Detailed Solution
The correct option is option 3,i.e, $207,000
Additional information:
Financial Reporting Question 10:
IAS 21 The Effects of Changes in Foreign Exchange Rates defines the term ‘functional currency’.
Which of the following is the correct definition of ‘functional currency’?
Answer (Detailed Solution Below)
Financial Reporting Question 10 Detailed Solution
The correct option is option 4
Additional information:
Functional currency is defined as the currency of the primary economic environment in which an entity operates. Answer 1 is the definition of presentation currency. Answer 3 is one of the primary methods of determining an entity’s functional currency.