question 23choose the correct answer from the choices Which of the following statements is not correct? *Administration and other general overhead cost shall be included in the cost of the property, plant andequipment.Under the cost model, an item of property, plant and equipment shall be carried atits historical cost lessaccumulated depreciation less accumulated impairmentiosses.An exchange transaction has a commercial substance if the configuration of the cashflows of the asset differsfrom the configuration of the cashflows of the asset transferred.The choice of the model whether cost or revaluation model shall be applied to an entire class of property,plant and equipment.

The administration expense and the general expenses includes the operating expenses of the company.…

Which of the following statements is not correct? * Administration and other general overhead cost shall be included in the cost of the property, plant an equipment. Under the cost model, an item of property, plant and equipment shall be carried atits historical cost le accumulated depreciation less accumulated impairmentiosses. An exchange transaction has a commercial substance if the configuration of the cashflows of the asse from the configuration of the cashflows of the asset transferred.

Which of the following statements is not correct? * Administration and other general overhead cost shall be included in the cost of the property, plant an equipment. Under the cost model, an item of property, plant and equipment shall be carried atits historical cost le accumulated depreciation less accumulated impairmentiosses. An exchange transaction has a commercial substance if the configuration of the cashflows of the asse from the configuration of the cashflows of the asset transferred.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA1: International Financial Reporting Standards

Section: Chapter Questions

Problem 9MCQ

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Which of the following statements is/are FALSE: I. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset’s useful life and increase the asset’s capacity is capitalised. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. V. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of…
Which statements are correct concerning measurement of cost of property, plant and equipment?I. The purchase price of an item of property, plant and equipment is the cash price equivalent at the date of recognitionII. If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and total payment is recognized as interest expense over the life of the asset.III. If an item of property, plant and equipment is acquired in exchange for a nonmonetary asset or a combination of monetary and nonmonetary asset, the cost of such item is measured at fair value unless the exchange transaction lacks commercial substance or fair value of either asset received or given up is not reliably determinable.IV. If an entity is able to determine reliably the fair value of both the asset given up and asset received in an exchange, the fair value of the asset given up is used to measure the cost of asset received in exchange.
Explain the difference in the accounting treatment of costs incurred to purchaseintangible assets versus the costs incurred to internally develop intangible assets
Which of the following statements is (are) correct?a. Accumulated depreciation represents a cash fund beingaccumulated for the replacement of plant assets.b. The cost of a machine includes the cost of repairingdamage to the machine during the installation process.c. A company may use different depreciation methods inits financial statements and its income tax return.d. The use of an accelerated depreciation method causesan asset to wear out more quickly than does use of thestraight-line method.
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According to PAS 38, which of the following may be recognized as cost of intangible asset?a. Research costs incurred in self-generating an intangible assetb. Costs of an internally generated customer listsc. Purchase cost of an externally acquired publishing titled. Abnormal amount of wasted labor in self-generating an intangible asset Which of the following statements is correct?a. Some intangible assets have physical substance.b. Intangible assets are always classified as noncurrent assets even in cases where they are part of a disposal group.c. The process of recording the expiration of the economic benefits of an intangible asset is called depletion.d. Intangible assets can be obtained in one of two ways – external acquisition or internal development. Which of the following statements is true?a. The capitalizable costs of patents are legal fees and other registration costs.b. An identifiable tangible asset developed internally is never recognized in the accounts as an asset.c.…
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Based on the knowledge that you have learned from this unit and the relevant accounting standards, answer the following questions. Your answers must demonstrate your own understandings and applications of relevant accounting standards, but not a direct quote of the standards. a.Use an example to explain what are included in the original cost of property, plant, and equipment when they are initially acquired. b. What is the basic principle for valuing property, plant, and equipment acquired in exchange for other non-monetary assets? c. Use an example to illustrate how gain or loss on disposal is calculated and recorded when an item of property, plant, and equipment is disposed of.
Which of the following statement is incorrect as to acquisition of Property, Plant and Equipment on a cash basis?. a. The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. b. Directly attributable cost to be capitalized includes freight, installation cost and other cost necessary in bringing the asset to the location and condition for the intended use. c. The cost of asset acquired on a cash basis simply includes the cash paid plus directly attributable cost d. When several assets are acquired at a “basket price” or “lump sum price”, it is necessary to apportion the single price to the assets acquired on the basis of relative carrying value.