31191027416 - Nguyễn Hữu Thọ 

Nhà của tôi  Các khoá học của tôi  Khoa Kế toán  Bộ môn Kế toán tài chính  KTQT1_CT4_2021_HANH  Topic 10.
Provisions, contingencies  IAS 37 Quizzes (Updated Aug 2021)

Bắt đầu vào lúc Chủ nhật, 28 Tháng mười một 2021, 10:41 AM
State Finished
Kết thúc lúc Chủ nhật, 28 Tháng mười một 2021, 10:48 AM
Thời gian thực hiện 6 phút 27 giây
Điểm 20,00/20,00
Điểm 10,00 out of 10,00 (100%)

Câu Hỏi 1 Đúng Đạt điểm 1,00 trên 1,00

If the possibility of a penalty is remote:

Select one:
a. Record a contingent liability.
b. Disclosure a contingent liability.
c. Do nothing.
d. Record a provision

The correct answer is: Do nothing.

Câu Hỏi 2 Đúng Đạt điểm 1,00 trên 1,00

A car manufacturer provides 2-year warranty related to all repairs of its products. Should car
manufacturer recognize the provision for warranty repairs in line with IAS 37?

Select one:
a. No, because it is impossible to measure the amount that will be paid for the repairs.
b. No, because at the time of sale, there is no present obligation to pay for the repairs. Car
manufacturer will need to pay only when there is some claim from customers in the future.
c. Yes, because a past event is a sale of a product with warranty and based on past statistics a car
manufacturer can assess the probability of having to pay for the repairs and estimate the costs.
d. Yes, because there is a constructive obligation as a result of past event (production of a defective
car).

The correct answer is: Yes, because a past event is a sale of a product with warranty and based on past
statistics a car manufacturer can assess the probability of having to pay for the repairs and estimate the costs.

Câu Hỏi 3 Đúng Đạt điểm 1,00 trên 1,00

M’s paint shop has suffered some bad publicity as a result of a customer claiming to be suffering from
skin rashes as a result of using a new brand of paint sold by M’shop. The customer launched a court
action against M in Nov 20X3, claiming damages of $5,000. M’s lawyer has advised him tha the most
probable outcome is that he will have to pay the customer $3,000. What amount should M include as a
provision in his accounts for the year ended 31 Dec 20X3?

Select one:
a. $nil
b. $5,000
c. $3,000
d. $8,000

The correct answer is: $3,000

Câu Hỏi 4 Đúng Đạt điểm 1,00 trên 1,00

Discount rates should be:

Select one:
a. Pre-tax.
b. Changed annually.
c. Pre-tax & post- tax
d. Post-tax.

The correct answer is: Pre-tax.

Câu Hỏi 5 Đúng Đạt điểm 1,00 trên 1,00

A provision should be recorded when:

Select one:
a. 1-3 are all present.
b. An estimate can be made of the obligation.
c. It is probable that payment will be required.
d. An undertaking has a present obligation legal, or constructive.

The correct answer is: 1-3 are all present.

Câu Hỏi 6 Đúng Đạt điểm 1,00 trên 1,00

Manufacturer of chemical products applies strong environmental policy worldwide and undertakes to
clean up the contaminated water and land. This company causes an environmental damage in the
country A, in which there is no legislation that would oblige the company to remove contamination.
Should the company recognize provision for cleanup costs in line with IAS 37?

Select one:
a. Yes, because there is a legal obligation arising from past event.
b. No, because there is no obligation arising from past event.
c. Yes, because there is a constructive obligation arising from past event (contamination).
d. No, because there is no legislation in the country A to enforce the removal of contamination.

The correct answer is: Yes, because there is a constructive obligation arising from past event (contamination).

Câu Hỏi 7 Đúng Đạt điểm 1,00 trên 1,00

According to IAS 37, a constructive obligation arises:

Select one:
a. When an entity has created valid expectations in the affected parties based on the previous
experience, best practices or legislation.
b. As a result of a construction contract in line with IAS 11 Construction contracts.
c. When an entity has indicated to other parties that it will accept certain responsibilities and as a
result, an entity has created a valid expectation of those other parties that it will discharge those
responsibilities.
d. As a result of a contract, some legislation or other operation of law.

The correct answer is: When an entity has indicated to other parties that it will accept certain responsibilities
and as a result, an entity has created a valid expectation of those other parties that it will discharge those
responsibilities.
Câu Hỏi 8 Đúng Đạt điểm 1,00 trên 1,00

The following items have to be considered in finalizing the financial statements of Q, a limited liability
company: 1. The company gives warranties on its products. The company’s statistics show that about 5%
of sales give rise to a warranty claim; 2. The company has guaranteed the overdraft of another company.
The likelihood of a liability arising under the guarantee is assessed as possible. According to IAS 37
Provisions, contingent liabilities and contigent assets, what is the correct action to be taken in the
financial statements for these items?

Select one:
a. 1: create a provision; 2: disclose by note only
b. 1: disclose by note only; 2: no action
c. 1,2: create a provision
d. 1: disclose by note only; 2: create a provision

The correct answer is: 1: create a provision; 2: disclose by note only

Câu Hỏi 9 Đúng Đạt điểm 1,00 trên 1,00

Which of the following is not a disclosure requirement for a contingent liability?

Select one:
a. Indication of uncertainties relating to the amount
b. Estimated financial effect
c. Possibility of any reimbursement
d. Exact timing of outflow

The correct answer is: Possibility of any reimbursement

Câu Hỏi 10 Đúng Đạt điểm 1,00 trên 1,00

If a provision relates to a large population of items, the amount of the provision should be calculated as:

Select one:
a. The maximum expenditure that could possibly be required to settle the obligation
b. The minimum expenditure that could possibly be required to settle the obligation
c. The expected value of the expenditure that will be required to settle the obligation
d. The present value of the maximum expenditure that could possibly be required to settle the
obligation

The correct answer is: The expected value of the expenditure that will be required to settle the obligation

Câu Hỏi 11 Đúng Đạt điểm 1,00 trên 1,00

D Co is a business that sells second hand cars. If a car develops a fault within 30 days of the sale, D Co
will repair it free of charge. At 30 Apr 20X4 D Co had made a provision for repairs of $2,500. At 30 Apr
20X5, it calculated that the provision should be $2,000. What entry should be made for the provision in D
Co’s statement of profit or loss for the year to 30 Apr 20X5?

Select one:
a. A charge of $2,000
b. A credit of $2,000
c. A credit of $500
d. A charge of $500

The correct answer is: A credit of $500

Câu Hỏi 12 Đúng Đạt điểm 1,00 trên 1,00

An ex-director of X Co has commenced an action against the company claiming substantial damages for
wrongful dismissal. The company’s solicitors have advised that the ex-director is unlikely to succeed with
his claim, although the change of X paying any monies to the ex-director is not remote. The solicitors’
estimates of the company’s potential liabiltities are: Legal costs (to be incurred whether the claim is
successful or not) $50,000; Settlement of claim if successful $500,000. According to IAS 37 Provisions,
contingent liabilities and contigent assets, how should this clasim be treated in the financial statements ?

Select one:
a. Disclose a contingent liability of $550,000
b. Provision for $500,000 and a contingent liabilities of $50,000
c. Disclose a provision of $50,000 and a contingent liability of $500,000
d. A provision of $550,000

The correct answer is: A provision of $550,000

Câu Hỏi 13 Đúng Đạt điểm 1,00 trên 1,00

Contingent liabilities are:

Select one:
a. Always recognised in the statement of financial position
b. Always disclosed in the notes to the financial statements
c. Disclosed in the notes unless the possibility of an outflow of economic benefits is remote
d. Recognised in the statement of financial position unless the possibility of an outflow of economic
benefits is remote

The correct answer is: Disclosed in the notes unless the possibility of an outflow of economic benefits is
remote
Câu Hỏi 14 Đúng Đạt điểm 1,00 trên 1,00

Which of the following items does the statement below describe? “A possible obligation that arises from
past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the entity’s control”

Select one:
a. A current liability
b. A contingent liability
c. A provision
d. A contingent asset

The correct answer is: A contingent liability

Câu Hỏi 15 Đúng Đạt điểm 1,00 trên 1,00

When a restructuring involves the sale of an operation, at what point may an obligation arise under IAS
37?

Select one:
a. When business is marketed for sale
b. When an expression of interest is filed
c. When a preferred buyer is located
d. When a binding sale agreement is executed

The correct answer is: When a binding sale agreement is executed

Câu Hỏi 16 Đúng Đạt điểm 1,00 trên 1,00

Contingent asset is recorded when cash inflows are:

Select one:
a. Uncertain
b. Received.
c. Probable.
d. Virtually certain.

The correct answer is: Probable.

Câu Hỏi 17 Đúng Đạt điểm 1,00 trên 1,00

Wanda Co allows customers to return faulty goods within 14 days of purchase. At 30 Nov 20X5 a
provision of $6,548 was made for sales returns. At 30 Nov 20X6, the provisions was re-calculated and
should now be $7,634. What should be reported in Wanda Co’s statement of profit or loss for the year to
31 Oct 20X6 in respect of the provisions?

Select one:
a. A charge of $7,634
b. A credit of $1,086
c. A charge of $1,086
d. A credit of $7,634

The correct answer is: A charge of $1,086

Câu Hỏi 18 Đúng Đạt điểm 1,00 trên 1,00

Which of the following statements about provisions and contingencies is/are correct? 1.A company
should disclosure details of the changes in carrying value of a provisions from the beginning of the end
of the year; 2. Contingent assets must be recognised in the financial statements in accordance with the
prudence concept; 3. Contingent liabilities must be treated as actual liabilities and provided for if it is
probable that they will arise.

Select one:
a. All three statements are correct
b. 1 and 3 only
c. 2 and 3 only
d. 3 only

The correct answer is: 1 and 3 only

Câu Hỏi 19 Đúng Đạt điểm 1,00 trên 1,00

Which of the following statements about the requirements of IAS 37 Provisions, contingent liabilities and
contigent assets are correct? 1. A contingent assets should be disclosed by note if an inflow of economic
benefits is probable; 2. No disclosure of contingent liability is required if the possibility of a transfer of
economic benefits arising is remote; 3. Contingent assets must not be recognised in financial statements
unless an inflow of economic benefits is virtually certain to arise.

Select one:
a. All are correct
b. 1 and 2
c. 2 and 3
d. 1 and 3

The correct answer is: All are correct

Câu Hỏi 20 Đúng Đạt điểm 1,00 trên 1,00

Which of the following is a restructuring cost under IAS 37?:

Select one:
a. Relocation of business activities from one region to another
b. Marketing
c. Relocation of staff
d. Investment in new distribution networks

The correct answer is: Relocation of business activities from one region to another

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