PAS 1 Presentation of Financial Statements

Problem 3

1. Which regulatory body sets the guidelines for Presentation of Financial Statements
under International Financial Reporting Standards (IFRS)?
A) Financial Accounting Standards Board (FASB)
B) International Accounting Standards Board (IASB)
C) Securities and Exchange Commission (SEC)
D) Generally Accepted Accounting Principles (GAAP)

2. According to PAS 1, an entity shall prepare its financial statements on a going

concern basis unless:
A) Management intends to liquidate the entity or cease trading
B) Shareholders vote against it in the annual meeting
C) The entity is publicly traded
D) The entity is a non-profit organization

3. Which of the following is a fundamental characteristic of financial statements

according to PAS 1?
A) Relevance
B) Comparability
C) Materiality
D) All of the above

4. What does PAS 1 require regarding the classification of assets and liabilities as
current or non-current?
A) Assets and liabilities must be classified as current or non-current based on their nature
B) Assets and liabilities must be classified as current or non-current based on the entity's
liquidity
C) Assets and liabilities must always be classified as current
D) Assets and liabilities must always be classified as non-current

5. Under PAS 1, if an entity changes its accounting policies, it must:

A) Retrospectively restate the financial statements for prior periods, unless impracticable
B) Ignore the change for reporting purposes
C) Only apply the new policy to future transactions
D) Seek approval from shareholders before making the change