INSTURCTION
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1. GT Plc has a non-current asset which had a carrying amount in the financial statements of GHc18,000 at 31st December 2021. Its tax written down value at that date was GHc9.000. The tax rate is 30%. In accordance with IAS 12 income taxes what is the deferred tax balance in respect of this asset at 31st December 2021?
2. The Alpha Company has inventory located in its factory, to which the following estimates relate: Production costs incurred to date GHc 1,800; transport costs to customer GH300; future selling costs GH$400; selling price GH$2,800. According to IAS 2 Inventory, what is the value to be recognized in respect of the inventory?
3. According to AS 37 Provisions, contingent liabilities and contingent assets, which of the following is the correct definition of a provision?
4. According to IFS 15 Revenue from contracts with customers, a promise in a contract with a customer to transfer to the customer a good or service that is distinct or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer is termed as
5. Which of the following are the amounts of income taxes payable in future periods in respect of taxable temporary difference?
6. The core principle of IFS 15 Revenue from contracts with customers is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in the exchange for those goods and services. Which of the following not a core principle is as delivered in the five-step model?
7. According to IAS 12 Income taxes, deductible temporary differences give rise to the recognition of a
8. A competitor has sued an entity for unauthorized use of its patented technology. The amount that the entity may be required to pay to the competitor if the competitor succeeds in the lawsuit is determinable with reliability, and according to the legal counsel it is less than probable (but more than remote) that an outflow of the resources would be needed to meet the obligation. The entity that was sued should at year end set aside, as an appropriation, a contingency reserve, an amount based on the best estimate of the possible liability.
9. ........ requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the framework.
10. According to IAS 2 Inventory, the cost of inventory should not include import duties and other taxes.
11. An entity has closing inventory of GH¢2,000 (100 units at GH¢20) which was damaged due to a fire at a company's warehouse. Additional cost of GH&5 per unit is to be made to put the inventory in a condition for sale. At what value should the inventory be presented in the financial statement?
12. Provisions differ from other liabilities in that provisions involve uncertain timing or amount.
13. In accordance with IAS 37, a provision can be recognised when there is a constructive obligation as a result of a past (obligating) event, the outflow of resources is probable, and a reliable estimate can be made of the amount of the obligation.
14. The five-step model for the recognition of revenue from contract with customers are:
I. Determine the transaction price
II. Identify the contact with the customer
III. Identify the performance obligation in the contract
IV. Allocate the transaction price to the performance obligation in the contracts
V. Recognise revenue when the entity satisfies a performance obligation
Which of the following is the right order of the five-step model?
Use the following data to answer questions 15 to 17.
GT Plc entered into a contract with GH Plc for the sale of three (3) different items to GH PIc. The agreed contract price was GHc100; however, the stand-alone selling price of Item A is GH$50, Item B is GHc75.00 and for Item C is GH¢25.00. How much revenue should be recognised for Item A, B and C respectively when the contract obligation is satisfied?
18. Errors have prospective effect on the financial statement while accounting policies have a retrospective effect.
19. Accounting estimates are adjustment to the carrying value of an asset or liability, resulting from reassessing the expected future benefit and obligations associated with that asset or liability.
20. Ajo Ltd bought a food processing machine I January 2019. The total cost of the machine amounted to GHS 300,000. The machine is depreciated at an annual rate of 25% but it enjoys capital allowance at an annual rate of 20%. Ajo Ltd applicable income tax rate is 30% What is the tax base of the machine?
