1. Which of the following statements is true regarding the

adoption of International Financial Reporting Standards

(IFRS) in the context of advanced financial accounting?

a) IFRS is mandatory for all companies worldwide.

b) IFRS allows for more transparent and comparable

financial reporting.

c) IFRS eliminates the need for financial statement

analysis.

d) IFRS increases the complexity and inconsistency in

financial reporting.

Answer: b) IFRS allows for more transparent and

comparable financial reporting.

Rationale: One of the key advantages of adopting IFRS is

the increased transparency and comparability of financial

reporting across different countries and companies,

facilitating better analysis and decision making.

2. When a company acquires another company and the

purchase price exceeds the fair value of identifiable net

assets acquired, the excess amount is recorded as:

a) Goodwill.

b) Accumulated depreciation.

c) Extraordinary gain.

d) Contingent liability.

Answer: a) Goodwill.