1. Which IFRS standard addresses the presentation of financial
statements?
A) IFRS 10
B) IFRS 15
C) IAS 1
D) IAS 19
Correct Answer: C) IAS 1
Rationale: IAS 1 sets out the overall requirements for the
presentation of financial statements, guidelines for their structure,
and minimum requirements for their content.
2. An entity has changed its accounting policy, which has a
significant effect on its financial statements. According to IFRS,
how should this change be reflected?
A) Retrospectively in the financial statements
B) Prospectively from the date of the policy change
C) No adjustment is required
D) Only in the notes to the financial statements
Correct Answer: A) Retrospectively in the financial statements
Rationale: IAS 8 states that when a change in accounting policy is
applied, it should be applied retrospectively unless it is
impracticable to determine the period-specific effects or the
cumulative effect of the change.
3. Under IFRS, how are inventories required to be measured?
A) At fair value through profit or loss
B) At the lower of cost and net realizable value
C) At the higher of cost and net realizable value
D) At current replacement cost
Correct Answer: B) At the lower of cost and net realizable value
Rationale: IAS 2 requires inventories to be measured at the lower
of cost and net realizable value, which is the estimated selling
price in the ordinary course of business, less the estimated costs of
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