T7

T7 practice questions, page 3 of 4, with answer review and explanations.

Question 11

Which of the following is a benefit of moving toward a single set of standards?

  1. Create equity across the economies of different countries
  2. Reduce the number of cross-border capital flows
  3. Greater comparability between companies equals lower cost to investors
  4. Less competition among exchanges

Question 12

Which of the following is the term that describes total net sales minus total expenses?

  1. Operating expenses
  2. Net income
  3. Total income
  4. Current assets

Question 13

Which of the following best defines the term “equity”?

  1. The residual interest in the assets of the entity after deducting all its liabilities
  2. A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits
  3. Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants
  4. Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants

Question 14

An offer of redundancy is an example of which kind of employee benefits?

  1. Short-term benefits
  2. Post-employment benefits
  3. Termination benefits
  4. Long-term benefits

Question 15

When the quality of information confirms users’ earlier expectations, which characteristic is being represented?

  1. Verifiability
  2. Predictive value
  3. Confirmatory value
  4. Faithful representation