1. When analyzing changes in stockholders' equity, which of the following

would not be considered a contributing factor?

 A) Issued share capital

 B) Retained earnings

 C) Treasury stock transactions

 D) Cash flow from operating activities

 Answer: D) Cash flow from operating activities

 Rationale: Cash flow from operating activities affects the company's

liquidity but does not directly affect the stockholders' equity.

2. In terms of cost measurement and flow assumptions, which method is

not accepted under International Financial Reporting Standards (IFRS)?

 A) First-In, First-Out (FIFO)

 B) Last-In, First-Out (LIFO)

 C) Weighted Average Cost

 D) Specific Identification

 Answer: B) Last-In, First-Out (LIFO)

 Rationale: LIFO is not permitted under IFRS because it can distort the

cost of goods sold and inventory balances.

3. Which of the following is not a criterion for revenue recognition under

the accrual basis of accounting?

 A) Performance obligation is satisfied

 B) Payment is received

 C) Transfer of control of goods or services

 D) It is probable that economic benefits will flow to the entity

 Answer: B) Payment is received

 Rationale: Revenue can be recognized when control of goods or services

has been transferred, regardless of payment receipt.

4. Special valuation issues in accounting often involve:

 A) Market value adjustments

 B) Historical cost maintenance

 C) Lower of cost or market rule

 D) Revenue recognition timing

 Answer: C) Lower of cost or market rule

 Rationale: This rule requires that inventory and other assets be reported

at the lower of cost or market value for conservatism