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CA Final Conceptual Framework for Financial Reporting — practice questions

Explore 40 free Conceptual Framework for Financial Reporting questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Conceptual Framework for Financial Reporting questions and exercises with answers

Showing questions 1–30 of 40.

The IASB's current Conceptual Framework for Financial Reporting was issued in which month and year?Read the answer and worked solution →A purpose of the Framework when no Standard applies?Read the answer and worked solution →The two fundamental qualitative characteristics are?Read the answer and worked solution →Financial information is relevant when it:Read the answer and worked solution →Faithful representation requires information to:Read the answer and worked solution →What does the Framework say an asset is?Read the answer and worked solution →A liability, as the Framework puts it, is a present:Read the answer and worked solution →An entity holds assets of Rs 8,50,000 and liabilities of Rs 3,20,000. What is its equity?Read the answer and worked solution →Income for a year is Rs 12,40,000 and expenses are Rs 9,15,000. What is the profit?Read the answer and worked solution →Which best describes income in the Framework?Read the answer and worked solution →Costs charged to profit as expenses are best defined as:Read the answer and worked solution →Recognition requires the item to give users:Read the answer and worked solution →Which is a current value measurement basis in the Framework?Read the answer and worked solution →Fair value is best described as:Read the answer and worked solution →Historical cost measurement is based on which amount?Read the answer and worked solution →A machine bought for Rs 1,00,000 is worth Rs 1,20,000 at year end. At what amount is it shown under historical cost?Read the answer and worked solution →Asset cost Rs 1,00,000, worth 1,20,000 at year 1 end, sold for 1,15,000 in year 2. Year 2 gain?Read the answer and worked solution →Historical cost reports inventory at lower of cost and:Read the answer and worked solution →Stock costs Rs 50,000; NRV rises to Rs 60,000. The rise is recognised:Read the answer and worked solution →Machine: list Rs 10,00,000, trade discount 50,000, import duty 80,000, installation 40,000. Cost?Read the answer and worked solution →IFRS treats revaluing PPE to fair value as:Read the answer and worked solution →A revaluation policy for equipment applies to:Read the answer and worked solution →Under IFRS, derivatives are reported:Read the answer and worked solution →In hyperinflation, plant is carried by:Read the answer and worked solution →IFRS 13 fair value assumes which kind of sale?Read the answer and worked solution →A Level 1 fair value input is:Read the answer and worked solution →Fair value inputs that are unobservable for the asset or liability belong to which level?Read the answer and worked solution →Goods delivered this year, cash received next year. Accrual revenue falls in:Read the answer and worked solution →Which basis recognises transactions only when cash changes hands?Read the answer and worked solution →What is an accrued expense?Read the answer and worked solution →

Worked practice questions

The IASB's current Conceptual Framework for Financial Reporting was issued in which month and year?

  1. September 2010
  2. March 2013
  3. March 2018
  4. June 2021
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Correct answer: C. March 2018

The present version of the Framework was issued by the IASB in March 2018, replacing the older 2010 text.

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A purpose of the Framework when no Standard applies?

  1. Guide consistent accounting policies
  2. Override an existing Standard
  3. Fix the tax rate on the item
  4. Set audit steps for the item
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Correct answer: A. Guide consistent accounting policies

Where no Standard applies, preparers use the Framework's concepts to build accounting policies that are consistent with each other.

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The two fundamental qualitative characteristics are?

  1. Comparability and verifiability
  2. Prudence and conservatism
  3. Understandability and timeliness
  4. Relevance and faithful representation
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Correct answer: D. Relevance and faithful representation

Useful information is built from relevance plus faithful representation, while comparability, verifiability, timeliness and understandability only enhance it.

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More Financialreporting topics

Ind AS 116 LeasesInd AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 12 Income TaxesInd AS 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment Property