MCQ - IPSAS

The International Public Sector Accounting Standards (IPSAS)
Introduction
1. The International Public Sector Accounting Standards (IPSASs) govern the accounting by
a. public sector entities
b. Government Business Enterprises
c. public sector entities including Government Business Enterprises
d. public sector entities including Government Business Enterprises and Private Sectors
2. International Public Sector Accounting Standards Board (IPSASB) is an independent board founded by
a. International Organisation of Supreme Audit Institution (INTOSAI)
b. International Federation of Accountants (IFAC)
c. Public Sector Committee (PSC)
d. International Accounting Standards Board (IASB)
3. The objective of the IPSASB is
a. to serve the public interest by developing high-quality accounting standards for the public sector
b. to provide convergence of international and national standards, thereby enhancing the quality and
standardization of financial reporting around the world.
c. Both A&B
d. None of the given
4. IPSASs are currently intended for application for
a. general purpose financial statements of all public sector entities.
b. Special purpose financial statements of all public sector entities.
c. general and special purpose financial statements of certain public sector entities.
d. general and special purpose financial statements of all public sector entities.
5. Public sector entities generally include
a. state, provincial, territorial governments
b. towns and cities bodies
c. agencies, boards, commissions and enterprises
d. All of the above
6. A Government Business Enterprise within the meaning of IPSASs is an entity that has characteristics
i. It is an entity with the power to contract in its own name.
ii. It has been assigned the financial and operational authority to carry on a business.
iii. It sells goods and services, in the normal course of its business, to other entities at profit or full cost
recovery.
iv. It is not reliant on continuing government funding to be a going concern (other than purchases of
outputs at arm’s length).
v. It is controlled by a public sector entity.
a. i, ii, iii and iv b. ii, iii, iv and v

c. i, ii, iii and v d. All of the above
7. Pick the correct one
a. Financial statements that are issued for users who are in a position to demand financial information
to meet their specific information needs are referred to as general purpose financial statements.
b. Examples of such users of financial statements are citizens, voters, their political representatives and
other members of the general public.
c. Both A&B
8. Financial statements prepared on the accrual basis of accounting by Public Sector Entities comprise
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Prepared by Deepak Kumar Rahi, AAO (Patna/Bihar)
a. a statement of financial position, a statement of financial performance, a Cash Flow Statement and a
statement of changes in net assets/equity.
b. a balance Sheet, Statement of Profit and Loss, statements of changes in equity, Cash Flow Statement
and Related notes, including comparative information for all statements presented.
c. a trading account, a trial balance, a statement of financial position, a statement of financial
performance, a Cash Flow Statement and a statement of changes in net assets/equity.
d. a trading account, a trial balance, a balance Sheet, Statement of Profit and Loss, statements of
changes in equity, Cash Flow Statement and Related notes, including comparative information for all
statements presented.
9. Financial statements tailored to meet the requirement of specific user such as executive committees,
the legislature and other parties with supervisory functions are referred to as
a. Manipulated Financial Statement b. General Purpose Financial Statement
c. Special Purpose Financial Statement d. Modified Financial Statement
10. Government Business Enterprises should apply
a. the International Financial Reporting Standards (IFRSs) issued by the IASB
b. the National Financial Reporting Standards (NFRSs) issued by the respective Government
c. the National Financial Reporting Standards (NFRSs) issued by the respective Accounting Regulatory
Body
d. Any of the above.
11. IFAC was established in
a. 1967 in New York b. 1977 in New York
c. 1967 in Washington DC b. 1977 in Washington DC
12. Pick the incorrect one
a. The IFAC established the Public Sector Committee (PSC) in 1986 as a standing technical committee
that initially focused on preparing and publishing studies and research reports on (international) public
sector accounting.
b. In 2004, the PSC was renamed International Public Sector Accounting Standard Board (IPSASB).
c. Both A&B
ANSWER
1 2 3 4 5 6 7 8 9 10 11 12
A B C A D D B A C A B D
7. Financial statements that are issued for users who are in a position to demand financial information to
meet their specific information needs are referred to as SPECIAL PURPOSE FINANCIAL STATEMENTS.
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Presentation of Financial Statements (IPSAS-1)
1. Objectives of IPSAS are

a. to provide the bases of presentation for general purpose financial statements in order to ensure
comparability on the one hand with the entity’s financial statements of previous periods and, on the
other, with the financial statements of other public sector entities.
b. To sets out overall requirements of the presentation of financial statements prepared under the cash
basis of accounting, and provides guidance for the structure and minimum requirements of the content
of such financial statements
c. Both A&B
2. Financial statements prepared in accordance with IPSASs must present the financial position, financial
performance and cash flows of an entity
a. truly b. accurately
c. fairly d. All of the above
3. State whether true or false
Qualitative characteristics of financial reporting” are fundamental principles for preparing financial
statements in accordance with IPSASs.
a. True b. False
4. Qualitative characteristics of financial reporting are four in number, pick the odd one out
a. understandability b. timely
c. relevance d. reliability
d. comparability
5. Constraints on Relevant and Reliable Information are
a. Timeliness
b. Balance between benefit and cost
c. Balance between qualitative characteristics
d. All of the above
6. General standards defined by IPSAS 1 for the preparation of financial statements include
i. going concern assumption ii. consistency of presentation
iii. materiality and aggregation iv. offsetting
v. comparative information
a. i, ii, iii and v b. i, ii, iii and iv

c. i, ii, iv and v d. All of the above
7. Which of the following is not a Components of Financial Statement on Accrual basis?
a. A statement of financial position
b. A statement of financial performance
c. Directors’ Report
d. A statement of changes in net assets/equity
e. When the entity makes publicly available its approved budget, a comparison of budget and actual
amounts either as separate additional financial statements or as a budget column in the financial
statements
a. Generally, financial statements of a public sector entity are prepared on a going concern basis unless
there is an intention to liquidate the entity or discontinue business or administrative operations, or there
is no alternative but to do so
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b. Where financial statements are not prepared on a going concern basis, the public sector entity is
required to disclose the fact, together with the reasons for that assessment as well as the basis on which
the financial statements are prepare
c. Both A&B
9. The presentation and classification of items in the financial statements must be CONSISTENT from one
period to another unless
a. required otherwise by a significant change in the nature of the entity’s operations or a change in one
or more IPSAS
b. required by the intended users
c. Both A&B
Each material class of items in the financial statements must be presented separately and no aggregating
items of a different nature or function is permitted even when they are immaterial individually.
a. True b. False
a. Assets and liabilities, and revenue and expenses, may be offset unless offsetting is expressly permitted
or required by another IPSAS
b. Comparative prior-period information both narrative and descriptive information being relevant must
be presented for all amounts shown in the financial statements and notes
c. Financial statements are presented at least annually and if the reporting date changes and financial
statements are presented for a period other than one year, disclosure thereof is required.
12. IPSAS 1
a. specifies maximum line items to be presented in the statement of financial position and the statement
of financial performance, and includes guidance for identifying whether additional line items, headings
and sub-totals are required
b. specifies minimum line items to be presented in the statement of financial position and the statement
of financial performance, and includes guidance for identifying whether additional line items, headings
and sub-totals are required
c. specifies both minimum and maximum line items to be presented in the statement of financial
position and the statement of financial performance, and includes guidance for identifying whether
additional line items, headings and sub-totals are required
d. does not specify either minimum or maximum line items to be presented in the statement of financial
position and the statement of financial performance, and includes guidance for identifying whether
additional line items, headings and sub-totals are required
13. As per IPSAS 1
a. There is no particular requirement as to the format of presentation of the statement of financial
position.
b. It may be presented either in account form or vertical form.
c. Both A&B
14. The statement of financial position presents assets and liabilities classified by
a. maturity as current and non-current
b. liquidity
c. Both A&B
d. maturity as current and non-current and in exceptional case by liquidity where it provides more
reliable and relevant information.
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15. Assets and liabilities are classified as current when they are expected to be recovered or settled in the
course of ordinary operations or within
a. 12 months of the reporting date b. 6 months of the reporting date
c. 12 months of the date of audit report d. 6 months of the date of audit report
16. Pick the correct regarding Statement of Financial Position
a. Public sector entities are required to present an analysis of expenses either in the statement of
financial performance or in the notes
b. The expenses are classified either by nature or by their function within the entity, depending on which
classification provides more reliable and relevant information.
c. If an entity decides to classify expenses by function, it must also provide a presentation by nature of
expense in the notes, including depreciation and amortization expense and employee benefits expense.
d. All of the above
17. A break-down of movements in equity is presented in
a. Statement of Financial Position b. Statement of changes in net assets/equity
c. Statement of Financial Performance d. Cash Flow Statement
18. Supplementing the disclosures required by individual IPSASs, the IPSAS 1 prescribes the following
disclosures in the notes
i. measurement bases and accounting policies used
ii. Information required by IPSASs that is not presented on the face of the statement of financial position,
statement of financial performance, statement of changes in equity or cash flow statements
iii. the extent to which transitional provisions have been used
iv. Presentation of the judgments that management has made in applying accounting policies
v. key assumptions concerning the future, and other key sources of estimation uncertainty
a. i, iii, iv and v b. i, ii, iv and v

c. i, ii, iii and iv d. All of the above
19. Supplementing the disclosures required by individual IPSASs, the IPSAS 1 prescribes the following
disclosures in the notes
i. the domicile and legal form of the entity
ii. the nature of the entity’s operations
iii. details regarding key management personnel
iv. reference to the relevant legislation governing the entity’s operations
v. the name of the controlling entity and the ultimate controlling entity of the economic entity
a. i, ii, iv and v b. i, iii, iv and v

c. i, ii, iii and iv d. All of the above
20. Public sector entities whose financial statements comply with IPSASs should not disclose that fact
regarding Going Concern in the notes to the financial statements.
a. True b. False
IPSAS-01
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A C A B D D B C A B
11 12 13 14 15 16 17 18 19 20
A B C D A D B D A B
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1. To sets out overall requirements of the presentation of financial statements prepared under the
ACCRUAL BASIS OF ACCOUNTING, and provides guidance for the structure and minimum requirements of the
content of such financial statements
7. i) A statement of financial position (ii) A statement of financial performance (iii) A statement of
changes in net assets/equity (iv) A cash flow statement (v) When the entity makes publicly available its
approved budget, a comparison of budget and actual amounts either as separate additional financial
statements or as a budget column in the financial statements (vi) Notes, comprising a summary of significant
accounting policies and other explanatory notes
10. Each material class of items in the financial statements must be presented separately. Aggregating items
of a different nature or function is permitted only if they are IMMATERIAL INDIVIDUALLY.
11. Assets and liabilities, and revenue and expenses, MAY NOT BE OFFSET unless offsetting is expressly
permitted or required by another IPSAS
20. Public sector entities whose financial statements comply with IPSASs should disclose that fact in the
notes to the financial statements.
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CASH FLOW (IPSAS-02)
1. Cash flow information allows users

a. to understand how a public sector entity raised the cash it required to fund its business and
administrative operations
b. how that cash was used.
c. Both A&B
a. This IPSAS 02 requires the presentation of information about the current changes in cash and cash
equivalents of an entity by means of a cash flow statement
b. IPSAS 02 classifies cash flows during the period by operating and investing activities only barring
financial activities
c. Both A&B
3. Cash comprises
a. cash on hand
b. cash on hand and demand deposits
c. Cash on hand and short-term, highly liquid investments that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
d. cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value.
a. short-term, highly liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value are termed as cash equivalent
b. In some countries, short-term bank borrowings (overdraft facilities) are also considered to be cash
equivalent provided they are payable on demand
c. Cash also includes equity investments.
d. All of the above
5. As per IPSAS 02
a. The cash flows are reported separately for operating activities and combining for investing activities
and financing activities.
b. The cash flows are reported combined for operating activities, investing activities and financing
activities.
c. The cash flows are reported separately by operating activities, investing activities and financing
activities.
d. The cash flows are reported separately by operating activities, investing activities and financing
activities as well as combining operating activities, investing activities and financing activities
a. Operating Activities- the principal revenue-producing activities of the entity and other activities that
are not investing or financing activities.
b. Investing Activities- the acquisition and disposal of long-term assets and other investments not
included in cash equivalents.
c. Financing Activities- the activities that result in changes in the size and composition of the contributed
equity and borrowings of the entity.
d. None of the above
7. Cash flows may be presented under either the direct method or the indirect method for cash flow from
a. Operating Activities b. Investing Activities
c. Financing Activities d. All of the above
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8. The method of cash flow whereby major classes of gross cash receipts and gross cash payments are
disclosed is called
a. Gross Method b. Direct Method
c. Indirect Method d. Absolute Method
9. Under indirect cash flow method
a. profit or loss is adjusted for the effects of transactions of a cash nature, any deferrals or accruals of
past or future operating cash receipts or payments.
b. Statement of changes in net assets/equity is adjusted for the effects of transactions of a cash nature,
any deferrals or accruals of past or future operating cash receipts or payments.
c. profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals
of past or future operating cash receipts or payments
d. Statement of changes in net assets/equity is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash receipts or payments
a. Cash flow reporting method for cash flow from investing and financing activities is indirect method.
b. Public sector entities are encouraged to report cash flows from operating activities using the direct
method
c. Neither A nor B
d. Both A&B
11. Which of the following are examples of cash from operating activities?
i. cash payment to other public sector entities to finance their operations excluding loan
ii. insurance entity for premiums and claims, annuities and other policy benefits
iii. from contracts held for dealing or trading purposes
iv. discontinued operations
v. litigation settlements
a. ii, iii, iv and v b. i, ii, iii and iv

c. All of the above d. None of the above
12. Major examples of cash flow from investing activities are
i. cash payments to acquire long-term assets including those relating to capitalised development costs
and self-constructed property, plant and equipment and cash receipts from sales of such assets
ii. cash payments to acquire equity or debt instruments and cash receipt from such instruments
iii. cash advances and loans made to other parties and cash receipts from such advances and loans
iv. cash payments for futures contracts, forward contracts, option contracts and swap contracts other
than those held for dealing or trading purposes and cash receipts from such contracts
a. i, ii and iii b. ii, iii and iv

c. i, ii and iv d. All of the above
13. Which of the following are the major examples of cash flow from financing activities
a. Cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other short or long-
term borrowings
b. Cash repayments of amounts borrowed
c. Cash payments by a lessee for the reduction of the outstanding liability relating to a finance lease
d. All of the above.
14. Public sector entities are required to report separately all major classes of
a. gross cash receipts and gross cash payments arising from investing and financing activities
b. net cash inflow or outflow arising from investing and financing activities
c. gross cash receipts and gross cash payments arising from investing and financing activities unless
the standard expressly permits reporting cash flows on a net basis
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d. net cash inflow or outflow arising from investing and financing activities unless the standard
expressly permits reporting cash flows on a net basis
15. Cash flows arising from transactions in a foreign currency are recorded in
a. foreign currency itself
b. an entity’s functional currency by applying to the foreign currency amount the exchange rate between
the functional currency and the foreign currency at the date of the cash flow.
c. an entity’s functional currency by applying to the foreign currency amount the exchange rate between
the functional currency and the foreign currency at the date of the reporting period.
a. Cash flows from interest and dividends received and paid are each disclosed separately and classified
in a consistent manner from period to period as either operating, investing or financing activities.
b. Cash flows arising from taxes on net surplus are classified as cash flows from operating activities
unless they can be allocated to specific financing or investing activities.
c. Both A&B
17. The aggregate cash flows arising from acquisitions and from disposals of subsidiaries or other business
units are presented separately and classified as
a. Investing Activities b. Financing Activities
c. Operating Activities d. Any of the above as decided by the entity
18. Entities are required
a. to disclose the components of cash and cash equivalents
b. to present a reconciliation of the amounts in their cash flow statement with the equivalent items
reported in the statement of financial position.
c. Both A&B
IPSAS-02
1 2 3 4 5 6 7 8 9 10
C D B A C D A B C C
11 12 13 14 15 16 17 18 XX XX
C D D C B C A C XX XX
2. This standard requires the presentation of information about THE HISTORICAL CHANGES in cash and
cash equivalents of an entity by means of a cash flow statement which classifies cash flows during the period by
OPERATING, INVESTING AND FINANCING ACTIVITIES.
4. In some countries, short-term bank borrowings (overdraft facilities) are also considered to be CASH
provided they are payable on demand
Cash generally does not include equity investments.
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ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS (IPSAS-03)
1. A change in accounting policy and of recognizing the effect of a change in an accounting estimate,
respectively are
a. Applying the new accounting policy to transactions, other events and conditions occurring after the
date as at which the policy is changed
b. Recognizing the effect of the change in the accounting estimate in the prior, current and future
periods affected by the change.
c. Both A&B
2. An adjustment of the carrying amount of an asset or a liability, or the amount of the periodic
consumption of an asset, that results from the assessment of the present status of, and expected future benefits
and obligations associated with, assets and liabilities is called
a. Change in accounting policies
b. Change of accounting estimate
c. Change in accounting policies as well as change of accounting estimate
d. Change in accounting policies as well as change of accounting estimate and correction of errors.
3. Changes in accounting estimates result from
a. past information/past development
b. new information/new developments
c. both past information/development and new information/developments
d. either of past information/development or new information/developments
Changes in accounting estimates are not correction of errors.
a. True b. False
5. Prior Period Errors are Omissions from, and misstatements in, the entity’s financial statements for one
or more prior periods arising from a failure to use, or misuse of, reliable information that
a. was not available when financial statements for those periods were approved for issue
b. could not reasonably be expected to have been obtained and taken into account in the preparation
and presentation of those financial statements.
c. Both A&B
6. In the absence of an IPSAS applicable to a transaction, other event or condition, management must use
judgment in developing and applying an accounting policy to achieve disclosures being
i. Relevant
ii. Reliable
iii. Represent faithfully the financial position/performance/cash flow
iv. Reflect the legal substance of transactions, other events and conditions and not merely the economic
form
v. complete in all material aspects

7. Orders in which reference other than those IPSASs dealing with similar and related issues and the
definitions, recognition and measurement criteria for assets, liabilities, revenue and expenses described in other
IPSASs to be made in absence of IPSAS applicable
i. Publication issued by International Accounting Standard Board (IASB)
ii. Interpretations published by the International Financial Reporting Interpretations Committee (IFRIC)
iii. International Financial Reporting Standard (IFRS)
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iv. International Accounting Standards (IAS)
v. Standing Interpretations Committee (SIC)
a. (i) IASB>(iii) IFRS>(iv) IAS>(ii) IFRIC>(v) SIC b. (iv) IAS>(i) IASB>(ii) IFRIC>(iii) IFRS>(v) SIC
c. (ii) IFRIC>(v) SIC>(iii) IFRS>(iv) IAS>(i) IASB d. (i) IASB>(iv) IAS>(iii) IFRS>(v) SIC>(ii) IFRIC
8. A change from one basis of accounting to another, e.g., from cash basis to accrual basis of accounting,
or changes in the accounting treatment, recognition or measurement within the same basis of accounting (e.g.,
accrual basis of accounting) are
a. not deemed changes in a public sector entity’s accounting policies
b. deemed changes in a public sector entity’s accounting policies
c. deemed changes in a public sector entity’s accounting estimates
d. Any of the given depending upon the professional judgement of the entity.
9. Which of the following is/are not regarded as a change of accounting policy
a. the application of an accounting policy for transactions, other events or conditions that differ in
substance from those previously occurring
b. the application of a new accounting policy for transactions, other events or conditions that did not
occur previously or were immaterial.
c. Both A&B
10. The initial application of a policy to revalue assets in accordance with IPSAS 17, Property, Plant and
Equipment, or IPSAS 31, Intangible Assets, is a change in an accounting policy to be dealt with
a. provision given in IPSAS 03 rather than in accordance with the IPSAS 17/31.
b. as a revaluation in accordance with IPSAS 17/IPSAS 31, rather than in accordance with this IPSAS 03.
c. either A or B depending upon the professional judgement provided the same is adequately disclosed.
d. either A or B which being capable of providing more reasonable and reliable information.
11. When changing an accounting policy upon initial adoption of a standard that does not include any
specific transitional provisions applying to that change, entities
a. must apply the change retrospectively
b. must apply the change prospectively.
c. must apply the change retrospectively except to the extent that it is impracticable to determine either
the period specific effects or the cumulative effect of the change.
d. must apply the change prospectively except to the extent that it is impracticable to determine either the
period specific effects or the cumulative effect of the change.
12. Where it is difficult to determine whether a change is change in accounting policy or a change in estimate,
then it is treated as
a. change in estimate
b. change in accounting policy
c. either change in estimate or accounting policy as determined by the entity
d. neither change in estimate nor accounting policy as determined by the entity but as a new event.
13. The effect of change in an accounting estimate shall be recognised prospectively by including it in profit or
loss in (a) the period of the change, if the change affects that period only or (b) the period of the change and future
periods, if the change affects both for
a. a change affecting assets and liabilities
b. other than a change affecting assets and liabilities
c. for all changes whether affecting assets and liabilities or not
14. Change in an accounting estimate that gives rise to changes in assets and liabilities, or relates to an item of
equity, it shall be recognised by
a. adjusting the surplus or deficit account.
b. adjusting the carrying amount of the related asset, liability or equity item in the period of the change.
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c. adjusting the carrying amount of the related asset, liability or equity item in retrospectively.
d. adjusting the carrying amount of the related asset, liability or equity item in prospectively.
15. As per IPSAS 03
a. Public sector entities are required to correct any material prior period errors retrospectively in the
first complete set of financial statements authorized for issue after their discovery
b. restating the comparative amounts for the prior periods presented in which the error occurred
c. if the error occurred before the earliest prior period presented, restating the opening balances of
assets, liabilities and net assets/equity for the earliest prior period presented.
d. All of the above
IPSAS-03
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A B B A D C A B C B C A B B D
1. Recognizing the effect of the change in the accounting estimate in THE CURRENT AND FUTURE PERIODS
affected by the change and NOT PAST/PRIOR PERIOD
5. Omissions from, and misstatements in, the entity’s financial statements for one or more prior periods
arising from a failure to use, or misuse of, reliable information that
(a) was available when financial statements for those periods were approved for issue and
(b) could reasonably be expected to have been obtained and taken into account in the preparation and
presentation of those financial statements.
6. (i) Relevant (ii) Reliable (iii) Represent faithfully the financial position/performance/cash flow (iv) Reflect
the economic substance of transactions, other events and conditions and not merely the legal form (v) Neutral
(vi) prudent and (vii) complete in all material aspects
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The Effects of Changes in Foreign Exchange Rates (IPSAS 4)
a. A Public Sector entity may carry on foreign activities in two ways.
b. It may have transactions in foreign currencies or it may have foreign operations.
c. Both A&B
2. Objective of the IPSAS 04 are
a. to prescribe how to include foreign currency transactions and foreign operations in the financial
statements of an entity and how to translate financial statements into a functional currency
b. to prescribe which exchange rate(s) to use and how to report the effects of changes in exchange rates
in the financial statements.
c. Both A&B
3. IPSAS 04 applies in accounting for transactions and balances in foreign currencies, except for
a. those derivative transactions and balances that are within the scope of IPSAS 29/41, Financial
Instruments
b. Revenue from Exchange Transactions within the scope of IPSAS 09
c. those lease transactions that are within the scope of IPSAS 13, Lease
d. All of the above
As public sector entities tend to have only very few transactions in foreign currency and conduct
business or administrative operations abroad on a small scale only, IPSAS 4 is not as relevant for the public sector
as the corresponding IFRS is for the private sector.
a. True b. False
5. In preparing financial statements, every public sector entity – whether a stand-alone entity, an entity
with foreign operations (e.g., a parent) or a foreign operation (e.g., a subsidiary or a branch) – decides on its
a. Nominal currency b. Functional currency.
c. Presentation currency d. All of the above
a. Upon initial recognition, foreign currency transactions are recognized in the functional currency by
translating the foreign currency amount at the spot exchange rate between the functional currency and
foreign currency on the date of the transaction.
b. Foreign currency monetary items shall be translated using the closing rate
c. Both A&B
7. Pick the incorrect one regarding Reporting at the ends of subsequent reporting periods
a. Non-monetary items that are measured in terms of historical cost in a foreign currency shall be
translated using the exchange rate at the date of the transaction
b. Non-monetary items that are measured at fair value in a foreign currency shall be translated using
the exchange rates at the date when the fair value was measured.
c. Both A&B
8. Exchange differences arising on the settlement of monetary items and on translating monetary items at
rates different from those used upon initial recognition are recognized in
a. surplus or deficit b. Statement of Financial Position
c. Statement of change in assets/equity d. All of the above
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a. Exchange differences arising from a monetary item that forms part of the reporting entity’s net
investment in a foreign (business or administrative) operation are recognized as a separate component
of net assets/equity in the consolidated financial statements.
b. Upon disposal of the net investment the associated exchange differences are recognized in surplus or
deficit.
c. Consolidated financial statements also include the separate financial statements of foreign
operations.
d. All of the above
a. IPSAS 4 permits reporting entities in the public sector to choose their presentation currency (or
currencies) freely.
b. the financial position and financial performance of every individual entity within the reporting entity
whose functional currency differs from the presentation currency need not be translated to the
reporting entity’s presentation currency
c. Both A&B
11. Entity whose functional currency is not the currency of a hyperinflationary economy, the results and
financial position of a Public Sector entity shall be translated into a different presentation currency using except
a. Assets and liabilities for each statement of financial position presented (i.e. including comparatives)
shall be translated at the closing rate at the date of that statement of financial position.
b. Revenue and expenses for each statement of financial performance presented (i.e. including
comparatives) shall be translated at exchange rates at the current reporting date
c. all resulting exchange differences shall be recognised as a separate component of net assets/equity.
12. If the functional currency of a foreign operation is the currency of a hyperinflationary economy, then its
financial statements are
a. first adjusted to reflect the purchasing power at the current reporting date
b. then translated into a presentation currency using the exchange rate at the current reporting date
c. Both A&B
13. When the economy ceases to be hyperinflationary then
a. comparative amounts are not restated and it shall use as the historical costs for translation into the
presentation currency
b. comparative amounts are restated and it shall use as the current costs for translation into the
c. comparative amounts are not restated but it shall use as the current costs for translation into the
d. comparative amounts are restated but it shall use as the historical costs for translation into the
14. When changing the functional currency public sector entities must apply the translation procedures
applicable to the new functional currency
a. retrospectively as of the date of transition b. prospectively as of the date of transition
c. retrospectively as of reporting date b. prospectively as of reporting date
IPSAS-04
1 2 3 4 5 6 7 8 9 10 11 12 13 14
C A A A B C D A D B B C A B
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2. to prescribe how to include foreign currency transactions and foreign operations in the financial
statements of an entity and how to translate financial statements into a PRESENTATION CURRENCY
3. IPSAS-04 applies to
(a) in accounting for transactions and balances in foreign currencies, except for those derivative
transactions and balances that are within the scope of IPSAS 29, Financial Instruments
(b) in translating the results and financial position of foreign operations that are included in the financial
statements of the entity by consolidation or the equity method; and
(c) in translating an entity’s results and financial position into a presentation currency.
10. The financial position and financial performance of every individual entity within the reporting entity
whose functional currency differs from the presentation currency NEED TO BE TRANSLATED to the reporting
entity’s presentation currency
11. Revenue and expenses for each statement of financial performance presented (i.e. including
comparatives) shall be translated at exchange rates at the HISTORICAL COST
15
Borrowing Costs (IPSAS-05)
1. In terms of IPSAS 05 Borrowing costs that are

a. directly attributable to the acquisition, construction or production of a qualifying asset form
part of the cost of that asset.
b. indirectly attributable to the acquisition, construction or production of a qualifying asset
form part of the cost of that asset.
c. whether directly or indirectly attributable to the acquisition, construction or production of
a qualifying asset form part of the cost of that asset.
d. the cost of that asset.
2. Interest and other costs that an entity incurs in connection with the borrowing of funds is
a. expense b. borrowing cost
c. current asset d. current liability
3. Components of borrowing cost in terms of provision given there in IPSAS 05 are
i. Interest on overdraft facilities or short-term and long-term borrowings
ii. Amortization of discounts or premiums relating to borrowings
iii. Amortization of ancillary costs incurred in connection with the arrangement of borrowings
iv. Finance charges for finance leases
v. Exchange differences arising from foreign currency borrowings to the extent that they
qualify as an adjustment to interest costs.

4. An asset that necessarily takes a substantial period of time to get ready for its intended use or sale is
called
a. Deadlock Asset b. Protective Asset
c. Qualifying Asset d. Veracious Asset
a. For the public sector qualifying assets include office buildings, hospitals, and infrastructure assets
such as roads, bridges and power generation facilities.
b. Inventories that require a substantial period of time to get ready for their intended use or sale are
not qualifying assets
c. Both A&B
6. Accounting Treatment of Borrowing Cost includes two types of treatment that are
a. Consolidated Treatment and Separate Treatment
b. Benchmark Treatment and Alternative Treatment
c. Fundamental Treatment and Supplementary Treatment
d. Traditional Treatment and Modern Treatment
7. Pick the correct regarding Benchmark Treatment
a. the borrowing costs are recognized as an expense in the period in which they are incurred.
b. the borrowings do not need to be allocated directly to the individual assets.
c. the benchmark treatment is the preferred method pursuant to IPSAS 5
8. Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized as part of the cost of that asset under
a. Benchmark Treatment b. Alternative Treatment
c. Consolidated Treatment d. Modern Treatment
16
a. To the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying
asset borrowing costs are reduced by interest income from the temporary investment of
borrowings.
b. To the extent that an entity borrows funds generally and uses them for the purpose of obtaining a
qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation by
applying a capitalisation rate to the expenditures on that asset.
c. The capitalisation rate shall be the weighted average of the borrowing costs applicable to the
borrowings of the entity that are outstanding during the period, other than borrowings made specifically
for the purpose of obtaining a qualifying asset.
d. All of the above
10. The commencement date for capitalisation is the date when the entity first meets any of the following
conditions: (a) it incurs expenditures for the asset; (b) it incurs borrowing costs; and (c) it undertakes activities
that are necessary to prepare the asset for its intended use or sale.
a. True b. False
11. A Public Sector entity shall
a. suspend capitalisation of borrowing costs during extended periods in which it suspends active
development of a qualifying asset
b. continue capitalisation of borrowing costs during extended periods in which it suspends active
development of a qualifying asset
c. continue or suspend capitalisation of borrowing costs during extended periods in which it suspends
active development of a qualifying asset subject to the merit of each case.
d. continue capitalisation of borrowing costs during extended periods in which it suspends active
development of a qualifying asset provided the extended period is not too long.
a. Capitalisation ceases when the activities necessary to prepare the asset for its intended use or sale
are substantially complete
b. When an entity completes the construction of a qualifying asset in parts and each part is capable of
being used while construction continues on other parts, the entity shall cease capitalising borrowing
costs when it completes substantially all the activities necessary to prepare that part for its intended
use or sale.
c. Both A&B
13. In terms of IPSAS 05 the accounting treatment for borrowing costs
a. may be disclosed in the financial statements.
b. must be disclosed in the financial statements.
c. must not be disclosed in the financial statements.
d. not mandatory to be disclosed in the financial statement.
IPSAS-05
1 2 3 4 5 6 7 8 9 10 11 12 13
A B D C A B D B D B A C B
5. . Inventories that require a substantial period of time to get ready for their intended use or sale ARE
QUALIFYING ASSETS
10. The commencement date for capitalisation is the date when the entity first meets ALL of the following
conditions:
(a) it incurs expenditures for the asset (b) it incurs borrowing costs and (c) it undertakes activities that
are necessary to prepare the asset for its intended use or sale.
17
Revenue from Exchange Transactions (IPSAS-09)
1. In terms of IPSAS 09 Revenue is recognized when

a. it is probable that future economic benefits or service potential will flow to the entity and these
benefits can be measured reliably.
b. it is not probable that future economic benefits or service potential will flow to the entity and these
benefits cannot be measured reliably.
c. it is probable that future economic benefits or service potential will flow to the entity and these
benefits cannot be measured reliably.
d. it is not probable that future economic benefits or service potential will flow to the entity and these
benefits can be measured reliably.
2. Transactions in which one entity receives assets or services, or has liabilities extinguished, and directly
gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity
in exchange are called
a. Accrual transactions b. Exchange transactions
c. Cash transactions d. Non-exchange transactions
3. Which of the following are non-exchange transactions relating to a Public Sector Entity?
a. Taxes and dues b. Donations
b. Taxes, dues and donations d. Taxes, dues, donations and transfers
4. IPSAS 09 applies to revenue arising from
a. the rendering of services
b. The sale of goods
c. The use by others of entity assets yielding interest, royalties and dividends
d. All of the above
5. Pick the incorrect one regarding the measurement of revenue from exchange transaction
a. Revenue from exchange transactions is measured at the fair value of the consideration received or
receivable without taking into account the amount of any trade discounts and volume rebates allowed
by the entity.
b. In the case of long-term payment terms the present value of all future receipts be used as a basis.
c. Both A&B
d. None of the given.
6. When the outcome of a transaction involving the rendering of services can be estimated reliably,
revenue associated with the transaction is recognized by reference to the stage of completion of the
transaction at the reporting date being referred to as
a. the percentage of completion method b. the ladder method
c. the straight-line method d. the composite method
7. Which of the following is/are method to use percentage completion?
a. Surveys of work performed
b. Services performed to date as a percentage of total services to be performed
c. The proportion that costs incurred to date bear to the estimated total costs of the transaction.
d. All of the above
8. Revenue to be recognized on a straight-line basis over the specified time frame when services are
performed in an indeterminate number of steps over a specified time frame, unless there is evidence that some
other method better represents the stage of completion.
a. True b. False
9. Transaction involving the rendering of services can be estimated reliably when
i. The amount of revenue can be measured reliably.
ii. It is probable that the economic benefits or service potential associated with the transaction will flow
to the entity.
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iii. The stage of completion of the transaction at the reporting date can be measured reliably
iv. The costs incurred for the transaction and the costs to complete the transaction can be measured
reliably.
a. ii, iii and iv b. i, ii and iii

10. When the outcome of the transaction involving the rendering of services cannot be estimated reliably,
a. revenue may not be recognised.
b. revenue may be recognized roughly.
c. revenue may be recognized only to the extent of the expenses recognized that are recoverable.
d. any of the above depending upon the professional judgement of the entity.
11. Recognition of revenue from sale of goods is done when
i. The entity has transferred to the purchaser the significant risks and rewards of ownership of the goods.
ii. The entity retains continuing managerial involvement to the degree usually associated with ownership
and effective control over the goods sold.
iii. The amount of revenue can be measured reliably.
iv. It is probable that the economic benefits associated with the transaction will flow to the entity.
v. The costs incurred or to be incurred in respect of the transaction can be measured reliably.
a. i, ii, iii and iv b. i, iii, iv and v

c. ii, iii, iv and v d. All of the above
12. Pick the incorrect one regarding recognition of revenue from interest, royalties and dividends
a. Interest is recognized on a time proportion basis that takes into account the effective yield on the
asset.
b. Royalties are recognized as they are earned in accordance with the substance of the relevant
agreement.
c. Dividends or their equivalents are recognized when the shareholder’s or the entity’s right to receive
payment is established
IPSAS-09
1 2 3 4 5 6 7 8 9 10 11 12
A B D D A A D A D C B D
5. Revenue from exchange transactions is measured at the fair value of the consideration received or
receivable TAKING INTO ACCOUNT THE amount of any trade discounts and volume rebates allowed by the entity.
11. It is probable that the economic benefits associated with the transaction will flow to the entity is related
to recognition of AN ASSET
19
Financial Reporting in Hyperinflationary Economies (IPSAS-10)
1. When the entity’s functional currency is hyperinflationary,

a. its financial statements are restated to express all items in terms of the measuring unit current at the
end of the reporting period.
b. its financial statements are not restated to express all items in terms of the measuring unit current at
the end of the reporting period.
c. its financial statements are restated to express all items in terms of the measuring unit current at date
of audit report.
d. its financial statements are restated to express all items in terms of the measuring unit current at the
date the financial statements are authorised for issue
2. In a hyperinflationary economy, financial statements,
a. when they are based on a historical cost approach are useful only if they are expressed in terms of
the measuring unit current at the end of the reporting period.
b. when they are based on a current cost approach are useful only if they are expressed in terms of the
measuring unit current at the end of the reporting period.
c. whether they are based on a historical cost approach or a current cost approach, are useful only if
they are expressed in terms of the measuring unit current at the end of the reporting period.
d. whether they are based on a historical cost approach or a current cost approach, are useful only if
they are not expressed in terms of the measuring unit current at the end of the reporting period.
IPSAS 10 establishes an absolute rate at which hyperinflation is deemed to exist for applying
restatement of financial statements in accordance with this standard.
a. True b. False
a. The corresponding figures for the previous period required by IPSAS 1, Presentation of Financial
Statements, and any information in respect of earlier periods shall also be stated in terms of the
measuring unit current at the end of the reporting period.
b. The surplus or deficit on the net monetary position must be included in the surplus or deficit for the
period and be disclosed separately in the statement of financial performance.
c. The restatement of financial statements in accordance with IPSAS 10 (e.g., by applying a general price
index) requires the application of certain procedures as well as judgment.
5. When an economy ceases to be hyperinflationary and an entity discontinues the preparation and
presentation of financial statements prepared in accordance with this Standard,
a. it shall treat the amounts expressed in the measuring unit current at the end of the previous
reporting period as the basis for the carrying amounts in its subsequent financial statements.
b. If the Public Sector entity presents financial statements restated for hyperinflation, then it is
generally not appropriate to present additional supplementary financial information prepared on
a historical cost basis
c. Both A&B
IPSAS-10
1 2 3 4 5
A C B D c
3. IPSAS 10 DOES NOT ESTABLISHE an absolute rate at which hyperinflation is deemed to exist for applying
restatement of financial statements in accordance with this standard
20
Construction Contracts (IPSAS-11)
1. IPSAS 11 regulates the accounting treatment of revenue and costs associated with construction
contracts in the financial statements of
a. public sector entities acting as contractor under such contract.
b. public sector entities acting as party under such contract.
c. public sector entities whether acting as contractor or a party under such contract
d. both public and private sector entities acting as contractor or a party under such contract
2. Objectives of the IPSAS 11 are
a. to identify the arrangements that are to be classified as construction contracts
b. to provide guidance on the types of construction contracts that can arise in the public sector,
c. to specify the basis for recognition and disclosure of contract expenses and, if relevant, contract
revenues
d. All of the above
3. IPSAS 11 does not distinguishes between fixed price contracts and cost plus contracts/cost-based
contracts.
a. True b. False
4. A construction contract in which the contractor is reimbursed for allowable or otherwise defined
costs and, in the case of a commercially-based contract, an additional percentage of these costs or a fixed
fee, if any is called
a. Fixed price contract b. percentage contract
c. Cost-plus contract d. Free-board contract
a. The requirements of IPSAS 11 are usually applied separately to each construction contract.
b. In certain circumstances, it is necessary to apply the standard to the separately identifiable
components of a single contract or to a group of contracts together in order to reflect the substance
of a contract or a group of contracts.
c. If a contract covers a number of assets, the construction of each asset should be treated as a
separate construction contract
d. All of the above
6. A contract may provide for the construction of an additional asset at the option of the customer or
may be amended to include the construction of an additional asset. The construction of the additional
asset is
a. not treated as a separate construction contract
b. treated as a separate construction contract provided certain conditions are met.
c. both A&B determined by the judgment of the management of the entity
7. Contract Revenue includes
a. The initial amount of revenue agreed in the contract
b. Variations in contract work, claims and incentive payments to the extent that it is probable that
they will result in revenue and they are capable of being reliably measured.
c. Both A&B
8. Contract revenue is measured at
a. the fair value of the consideration received or receivable
b. historical cost of the consideration received or receivable
c. current market value of the consideration received or receivable
d. the lowest of the above.
9. Cost of Contract include except
21
a. Costs that relate directly or indirectly to the specific contract
b. Costs that are attributable to contract activity in general and can be allocated to the specific
contracts
c. Such other costs that are specifically chargeable to the customer under the terms of the contract
10. Cost not part of Contract include
i. General administration costs for which reimbursement is not specified in the contract
ii. Selling costs
iii. Research and development costs for which reimbursement is not specified in the contract
iv. Depreciation of idle plant and equipment that is not used on a particular contract.

c. i, iii and iv d. All of the above
11. The recognition of revenue and expenses by reference to the stage of completion of a contract is
often referred to as the
a. completion method b. percentage of completion method
c. pro-rata completion method d. Multi-stage completion method
12. Factors for determination of stage of completion of a contract include
a. The proportion that contract costs incurred for work performed to date bear to the estimated
total contract costs
b. Surveys of work performed or
c. Completion of a physical proportion of the contract work.
d. All of the above
a. When the outcome of a construction contract cannot be measured reliably, revenue is
recognized only to the extent of contract costs incurred that it is probable will be recoverable
b. the contract costs are recognized as a liability in the period in which they are incurred.
c. The percentage of completion method is applied on a cumulative basis in each reporting period
to the current estimates of contract revenue and contract costs
14. The effect of a change in the estimate of contract revenue or contract costs, or the effect of a
change in the estimate of the outcome of a contract, is accounted for as
a. a change in accounting estimate under IPSAS 03
b. a change in accounting policy under IPSAS 03
c. a change in accounting policy as well as a change in accounting estimate under IPSAS 03
d. a contingent Liabilities and Contingent Assets under IPSAS 19
IPSAS-11
1 2 3 4 5 6 7 8 9 10 11 12 13 14
A D B C D B C A A D B D B A
3. IPSAS 11 ESSENTIALLY DISTINGUISHES between fixed price contracts and cost plus contracts/cost-
based contracts.
13. The contract costs are recognized as AN EXPENSE in the period in which they are incurred.
22
Inventories (IPSAS-12)
1. Objectives of IPSAS 12 include except

a. accounting for inventories is the amount of cost to be recognised as an asset and carried forward
until the related revenues are recognised.
b. determination of cost and its subsequent recognition as an expense, including any write-down
to net realisable value
c. providing guidance on the cost formulas that are used to assign costs to inventories.
2. Inventories are regarded as assets
i. In the form of materials and supplies to be consumed in the production process
ii. In the form of materials or supplies to be consumed or distributed in the rendering of services
iii. Held for sale or distribution in the ordinary course of operations
iv. In the process of production for sale or distribution
v. In the form of materials and supplies became idle and surplus

3. Inventories include
a. Goods purchased for resale
b. Finished goods produced or work in progress being produced and also materials and supplies awaiting
use in the production process.
c. Specifically in the public sector, goods purchased or produced by the entity that are distributed to
third parties for no charge or for a nominal charge
d. All of the above
4. Net Realisable Value means
a. the estimated selling price in the ordinary course of operations
b. the estimated selling price in the ordinary course of operations less the estimated costs of completion
and the estimated costs necessary to make the sale, exchange or distribution.
c. the estimated selling price in the ordinary course of operations plus the estimated costs of completion
and the estimated costs necessary to make the sale, exchange or distribution.
d. the estimated selling price in the ordinary course of operations plus the estimated costs of completion
less the estimated costs necessary to make the sale, exchange or distribution.
5. IPSAS 12 applies to inventories except
i. Work in progress arising under construction contracts, including directly related service contracts
ii. Financial instruments
iii. Biological assets related to agricultural activity and agricultural produce at the point of harvest
iv. Work-in-progress of services to be provided for no or nominal consideration directly in return from
the recipients.
a. i, ii and iii b. i, iii and iv

c. ii, iii and iv d. All of the above
6. The IPSAS 12 does not apply to the measurement of inventories held by except
a. Producers of agricultural and forest products, agricultural produce after harvest
b. minerals and mineral products whether measured at fair value less costs to sell or cost
c. Commodity broker-traders who measure their inventories at fair value less costs to sell.
7. When inventories are measured at net realisable value/fair value, changes in that value are
recognised in
23
a. surplus or deficit in the period of the change
b. Statement of financial position related to period of the change
c. Statement in change in assets/equity related to period of the change
d. All of the above
8. Inventories shall be measured at
a. the cost
b. the net realisable value
c. the lower of cost and net realisable value
d. the higher of cost and net realisable value
a. Inventories acquired through a non-exchange transaction are measured at their current market
value as of the date of acquisition
b. Inventories held for distribution at no charge or for a nominal charge or held for consumption in
the production process of goods to be distributed at no charge or for a nominal charge are
measured at the lower of cost and current replacement cost
c. Both A&B
10. The cost of inventories shall comprise except
a. all costs of purchase,
b. costs of conversion and other costs incurred in bringing the inventories to their present location
and condition.
c. cost of selling
11. The costs of purchase of inventories comprise EXCEPT
a. the purchase price,
b. import duties and other taxes including than those subsequently recoverable by the entity from
the taxing authorities
c. transport, handling and other costs directly attributable to the acquisition of finished goods,
materials and services.
a. Trade discounts, rebates and other similar items are deducted in determining the costs of
purchase.
b. The costs of conversion of inventories include full production-related costs.
c. Both A&B
13. The cost of inventories shall be assigned by using the
a. first-in, first-out (FIFO)
b. last-in, first-out (LIFO)
c. last-in, first-out (LIFO) or weighted average cost formula except in certain circumstances.
d. first-in, first-out (FIFO) or weighted average cost formula except in certain circumstances.
14. When inventories are sold, exchanged or distributed, the carrying amounts of those inventories are
recognized as
a. an expense in the period in which the related revenue is recognized
b. a liability in the period in which the related revenue is recognized
c. revenue in the period in which the related expense is recognized
d. an asset in the period in which the related expense is recognized
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a. If there is no related revenue, the expense is recognized when the goods are distributed or
related service is rendered.
b. The amount of any write-down of inventories and all losses of inventories are required to be
recognized as an expense in the period the write-down or loss occurs.
c. Any reversal of a write-down of inventories is deducted from the inventories recognized as an expense
in the period in which the reversal occurs.
IPSAS-12
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
D A D A D B A C B C B C D A D
6. Minerals and mineral products, to the extent that they are measured AT NET REALISABLE VALUE
in accordance with well-established practices in those industries.
9. Inventories acquired through a non-exchange transaction are measured at their FAIR VALUE AS OF
THE DATE OF ACQUISITION
10. The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and condition.
11. The costs of purchase of inventories comprise the purchase price, import duties and other taxes
(other than those subsequently recoverable by the entity from the taxing authorities), and transport,
handling and other costs directly attributable to the acquisition of finished goods, materials and services.
Trade discounts, rebates and other similar items are deducted in determining the costs of
purchase.
The costs of conversion of inventories include full production-related costs.
25
Lease (IPSAS-13)
1. The objective of the IPSAS 13 is to

a. prescribe the appropriate accounting policies and disclosures to apply in relation to finance and
operating leases for lessees
b. prescribe the appropriate accounting policies and disclosures to apply in relation to finance and
operating leases for lessors
c. prescribe the appropriate accounting policies and disclosures to apply in relation to finance and
operating leases for lessees and lessors
d. prescribe the appropriate accounting policies and disclosures to apply in relation to finance and
operating leases for lessees, lessors and lender.
2. IPSAS 13 describes
a. Operating lease and Financial lease b. Operating lease, Financial lease and Investing lease
b. Current lease and Long-term lease d. Period lease and Free-hold lease
3. A lease is said to be operating lease when
a. that lease transfers substantially all the risks and rewards incident to ownership of an asset.
b. title may or may not eventually be transferred.
c. Both A&B
4. Leases that do not transfer substantially all the risks and rewards incident to ownership of an asset and
title are called
a. Working lease b. Operating lease
c. Financial lease d. current lease
5. Minimum Lease Payment for lessee means
a. the payments over the lease term that the lessee is, or can be, required to make, excluding contingent
rent, costs for services and, where appropriate, taxes to be paid by and reimbursed to the lessor
together with any amounts guaranteed by the lessee or by a party related to the lessee
b. the payments over the lease term that the lessor is, or can be, required to make, excluding contingent
rent, costs for services and, where appropriate, taxes to be paid by and reimbursed to the lessee
together with any amounts guaranteed by the lessee or by a party related to the lessor
c. a. the payments over the lease term that the lessee is, or can be, required to make, including
contingent rent, costs for services and, where appropriate, taxes to be paid by and reimbursed to the
lessor together with any amounts guaranteed by the lessee or by a party related to the lessee
b. the payments over the lease term that the lessor is, or can be, required to make, including contingent
rent, costs for services and, where appropriate, taxes to be paid by and reimbursed to the lessee
together with any amounts guaranteed by the lessee or by a party related to the lessor
6. Minimum Lease Payment for lessor means the payments over the lease term that the lessee is, or can
be, required to make, excluding contingent rent, costs for services and, where appropriate, taxes to be paid by
and reimbursed to the lessor together with any residual value guaranteed to the lessor by
a. the lessee
b. a party related to the lessee
c. An independent third party unrelated to the lessor that is financially capable of discharging the
obligations under the guarantee
d. All of the above
7. The unearned finance revenue means
a. The total of the payments by the lessee (gross investment) and the fair value of the leased asset (net
investment).
b. The difference between total of the payments by the lessee (gross investment) and the fair value of
the leased asset (net investment).
26
c. The product of the payments by the lessee (gross investment) and the fair value of the leased asset
(net investment).
d. The difference between total of the payments by the lessee (gross investment) and the total amount
received from lessor (net investment).
8. IPSAS 13 should be applied in accounting for all leases other than
a. Leases to explore for or use minerals, oil, natural gas and similar non-regenerative sources
b. Licensing agreements for such items as motion picture films, video recordings, plays, manuscripts,
patents and copyrights
c. Both A&B
9. IPSAS 13 is not applied as the basis of measurement for
i. Property held by lessees that are accounted for as investment property (IPSAS 16)
ii. Investment property provided by lessors under operating leases (IPSAS 16)
iii. Biological assets held by lessees under finance leases (IPSAS 27)
iv. Biological assets provided by lessors under operating leases (cf. IPSAS 27)

10. Whether a lease is a finance lease or an operating lease depends on the substance of the transaction
rather than the form of the contract
a. True b. False
11. Which of the following is not an indicator of financial lease?
a. The lease transfers ownership of the asset to the lessee by the end of the lease term.
b. The lessee has the option to purchase the asset at a price that is expected to be sufficiently higher
than the fair value
c. The lease term is for the major part of the economic life of the asset even if title is not transferred.
d. At the inception of the lease the present value of the minimum lease payments amounts to at least
substantially all of the fair value of the leased asset
12. Which of the following is not an indicator of financial lease?
a. The leased assets are of such a specialized nature that only the lessee can use them without major
modifications.
b. The leased assets cannot easily be replaced by another asset.
c. If the lessee can cancel the lease, the lessor’s losses associated with the cancellation are borne by the
lessee.
d. Gains or losses from the fluctuation in the fair value of the residual accrue to the lessor
13. If the lessee has the ability to continue the lease for a secondary period at a rent that is substantially
lower than market rent, it is an indicator
a. Operating lease
b. Financial lease
c. operating lease for lessee and financial lease for lessor
d. None of the above.
14. Pick the correct in respect of Financial Leases in Financial Statement of LESSEE
a. At the commencement of the lease term, lessees shall recognise finance leases as assets and liabilities
in their balance sheets at amounts equal to the fair value of the leased property or, if lower, the present
value of the minimum lease payments, each determined at the inception of the lease.
ii. The discount rate to be used in calculating the present value of the minimum lease payments is the
interest rate implicit in the lease, if this is practicable to determine; if not, the lessee’s incremental
borrowing rate shall be used.
iii. Any initial direct costs of the lessee are added to the amount recognised as a liability.
27
iv. Minimum lease payments shall be apportioned between the finance charge and the reduction of the
outstanding liability.
v. The finance charge shall be allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.

15. Lessee will reflect Contingent rents as
a. an expenses in the periods in which they are incurred.
b. a liability in the periods in which they are incurred.
c. an assets in the periods in which they are incurred.
d. reduction in the carrying amount of the lease amount.
a. No depreciation for depreciable leased assets is admissible for the lessee.
b. The depreciation policy for depreciable leased assets for lessee shall be calculated in accordance with
IPSAS 17, PPE and IPSAS 31, Intangible Assets.
c. The depreciation policy for depreciable leased assets for lessor shall be calculated in accordance with
IPSAS 17, PPE and IPSAS 31, Intangible Assets.
d. The depreciation policy for depreciable leased assets for both lessee and lessor shall be calculated in
accordance with IPSAS 17, PPE and IPSAS 31, Intangible Assets.
17. If there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term,
the asset shall be fully depreciated over the shorter of the lease term and its useful life.
a. True b. False
18. Operating Leases in Financial Statement of LESSEE is reflected
a. as a liability on an incremental basis over the lease term
b. as an expense on a straight-line basis over the lease term
c. as an asset on a straight-line basis over the lease term
d. as an income on a straight-line basis over the lease term
19. Pick the correct regarding recognising Financial Leases in Financial Statement of LESSOR
a. assets held under a finance lease in their balance sheets and present them as a receivable at an
amount equal to the net investment in the lease.
b. The recognition of finance income shall be based on a pattern reflecting a constant periodic rate of
return on the lessor’s net investment in the finance lease.
c. If artificially low rates of interest are quoted, selling profit shall be restricted to that which would apply
if a market rate of interest were charged.
d. All of the above
20. Operating Leases in Financial Statement of LESSOR is reflected
a. as a liability on an incremental basis over the lease term
b. as an expense on a straight-line basis over the lease term
c. as an asset on a straight-line basis over the lease term
d. as an income on a straight-line basis over the lease term
21. Pick the correct regarding Operating Leases in Financial Statement of LESSOR
a. Initial direct costs incurred by lessors in negotiating and arranging an operating lease shall be added
to the carrying amount of the leased asset and recognised as an expense over the lease term on the
same basis as the lease income
b. The depreciation policy for depreciable leased assets shall be consistent with the lessor’s normal
depreciation policy for similar assets, and depreciation shall be calculated in accordance with IPSAS 17
and IPSAS 31.
c. Both A&B
28
22. If a sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the
carrying amount shall
a. be immediately recognised as revenue by a seller-lessee
b. not be immediately recognised as revenue by a seller-lessee, instead, it shall be deferred and
amortised over the lease term
c. be immediately recognised as expense by a seller-lessee
d. not be immediately recognised as expense by a seller-lessee, instead, it shall be deferred and
amortised over the lease term
23. Pick the incorrect statement if sale and leaseback transaction results in an operating lease
a. If the sale price is above fair value, the excess over fair value shall be deferred and amortised over the
period for which the asset is expected to be used.
b. If the sale price is below fair value, any surplus or deficit shall be recognised immediately except that,
if the loss is compensated for by future lease payments at below market price, it shall be deferred and
amortised in proportion to the lease payments over the period for which the asset is expected to be
used.
c. Both A&B
Where Lessee has an option to purchase the asset at a price that is expected to be sufficiently higher
than the fair value, the amount payable becomes the part of minimum payment
a. True b. False
IPSAS-13
1 2 3 4 5 6 7 8 9 10 11 12
C A D B A D A C D A B D
13 14 15 16 17 18 19 20 21 22 23 24
B C A B A B D D C B D B
3. Operating leases do not transfer substantially all the risks and rewards incident to ownership of an asset
12. Gains or losses from the fluctuation in the fair value of the residual accrue to the LESSEE
14. Any initial direct costs of the lessee are added to the amount recognised as AN ASSET.
24. Where Lessee has an option to purchase the asset at a price that is expected to be sufficiently LOWER
THAN the fair value, the amount payable becomes the part of minimum payment
29
Events after the Reporting Date (IPSAS-14)
1. Objectives of IPSAS 14 are

a. to deal with events that occur after the end of the reporting period but before the financial statements
are authorised for issue.
b. to require that an entity should prepare its financial statements on a going concern basis even if
events after the reporting date indicate that the going concern assumption is not appropriate
c. Both A&B
2. Date of authorisation for issue a financial statement means
a. six month after the end of reporting period.
b. The date on which the financial statements have been audited and submitted to authorised individual
or body for approval.
c. The date on which the financial statements have received approval from the individual or body with
the authority to finalize those statements for issue.
d. Earlier of the above.
3. Events after the reporting date means
a. Those events, favourable and unfavourable, that occur between the end of the reporting period
and the date when the financial statements are audited and submitted for approval.
b. Those events, favourable and unfavourable, that occur between the end of the reporting period
and the date when the financial statements are authorised for issue
c. Those unfavourable events that occur between the end of the reporting period and the date
when the financial statements are audited and submitted for approval.
d. Those unfavourable events that occur between the end of the reporting period and the date
when the financial statements are authorised for issue
a. Two types of events after reporting date can be identified
b. those that provide evidence of conditions that existed at the end of the reporting period i.e.
adjusting events after the reporting period
c. those that are indicative of conditions that arose after the reporting period i.e. non-adjusting
events after the reporting period.
d. All of the above
a. In the period between the reporting date and the date of authorization for issue, elected government
officials may announce a government’s intentions in relation to certain matters.
b. In most cases, the announcement of government intentions will lead to the recognition of adjusting
events.
c. Both A&B
6. Examples of adjusting events include
i. The settlement after the reporting period of a court case that confirms that the entity had a
present obligation at the end of the reporting period.
ii. The receipt of information after the reporting period indicating that an asset was impaired at
the end of the reporting period, or that the amount of a previously recognised impairment loss for
that asset needs to be adjusted.
iii. The determination after the reporting period of the cost of assets purchased, or the proceeds
from assets sold, before the end of the reporting period.
30
iv. The determination after the reporting period of the amount of profit-sharing or bonus
payments, if the entity had a present legal or constructive obligation at the end of the reporting
period to make such payments as a result of events before that date
v. A decline in fair value of investments between the end of the reporting period and the date
when the financial statements are approved for issue

7. Examples of non-adjusting events include except
a. The discovery of fraud or errors that show that the financial statements are incorrect.
b. If an entity declares dividends to holders of equity instruments after the reporting period, the
entity shall not recognise those dividends as a liability at the end of the reporting period.
c. An entity shall not prepare its financial statements on a going concern basis if management
determines after the reporting period either that it intends to liquidate the entity or to cease
trading, or that it has no realistic alternative but to do so.
8. Pick the correct regarding Going Concern assumption
a. In the public sector, the assessment of going concern is likely to be of more relevance for
individual entities (e.g. for local authorities) than for a government as a whole.
b. A government can decide to transfer the activities of one entity to another government agency which
could influence the going concern assumption for the transferring entity and its accounting.
c. Both A&B
9. Specific disclosure under IPSAS 14
a. An entity must disclose the date when the financial statements were authorized for issue and who
gave that authorization.
b. If another body has the power to amend the financial statements after issuance, the entity must
disclose that fact.
c. Both A&B
IPSAS-14
1 2 3 4 5 6 7 8 9
A C B D A B A C C
1. The standard also requires that an entity SHOULD NOT PREPARE its financial statements on a going
concern basis if events after the reporting date indicate that the going concern assumption is not appropriate
5. In most cases, the announcement of government intentions will not lead to the recognition of adjusting
events. Instead, they would generally qualify for disclosure as non-adjusting events.
6. A decline in fair value of investments between the end of the reporting period and the date when
the financial statements are approved for issue is an example of NON-ADJUSTING EVENT
31
Investment Property (IPSAS-16)
1. A property is said to be investment property if

a. it is used in the production or supply of goods or services or for administrative purposes
b. sale in the ordinary course of business.
c. Both A&B
2. When a Property (land or a building—or part of a building—or both) held by the owner or by the lessee
under a finance lease to earn rentals or for capital appreciation or both it is said to be
a. a property as defined under IPSAS 17 b. an investment property
c. a standalone property d. either A or B depending upon accounting treatment
Investment property generates cash flows largely independently of the other assets held by an entity,
distinguishing it from other land or buildings controlled by public sector entities, including owner-occupied
property.
a. True b. False
4. IPSAS 16 does not apply to
a. biological assets related to agricultural activity
b. Property, Plant and Equipment coming under the preview of IPSAS 17
c. Mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.
d. All of the above
5. An investment property shall be recognised as an assets when and only when EXCEPT
a. it is probable that the future economic benefits that are associated with the investment property will
flow to the entity
b. the cost or fair value of the investment property can be measured reliably.
c. expected future economic benefits is readily measureable in excess of cost of such property.
6. An investment property shall be measured initially at its
a. fair value b. cost
c. higher of fair value or cost d. lower of fair value or cost
a. Transaction costs relating to an investment property shall be included in the initial measurement.
b. The carrying amount of an investment property does not include the costs of the day-to-day servicing
of such a property
c. Costs of day-to-day servicing are primarily the costs of labour and consumables including the cost of
minor parts and these costs are recognized in surplus or deficit as incurred.
d. All of the above
8. Where an investment property is acquired through a non-exchange transaction, its cost is measured at
a. its fair value as at the date of acquisition b. its cost as incurred by the related party
c. its current market cost d. lowest of the given above.
9. Model of measurement of investment property after recognition are
a. Cost Model and Income Model
b. Cost Model and Fair Value Model
c. Fair Value Model and Revaluation Model
d. Cost Model, Fair Value Model and Revaluation Model
a. Under Fair Value Model an investment property is measured at fair value.
b. A gain or loss arising from a change in the fair value of investment property is recognized in surplus
or deficit for the period in which it arises.
32
c. Under Cost Model an investment property is measured at cost less any accumulated depreciation and
any accumulated impairment losses
11. Where the fair value of this investment property is not reliably determinable on a continuing basis, the
entity shall measure that investment property using the
a. fair value model according to IPSAS 16
b. cost model according to IPSAS 17 until disposal
c. any alternate model as determined by the entity
12. An investment property shall be derecognised i.e. eliminated from the balance sheet on
a. disposal
b. when the investment property is permanently withdrawn from use and no future economic benefits
are expected from its disposal.
c. Both A&B
13. Gains or losses arising from the retirement or disposal of investment property shall be recognised in
a. surplus or deficit b. Statement of financial position
c. carrying amount of the investment property d. All of the above
14. Compensation from third parties for investment property that was impaired, lost or given up shall be
recognised in
a. Statement of financial position when the compensation received or becomes receivable
b. surplus or deficit when the compensation received or becomes receivable
c. carrying amount of that particular investment property.
d. Statement in change of Assets/Equity.
IPSAS-16
1 2 3 4 5 6 7 8 9 10 11 12 13 14
D B A D C B D A B D B C A B
1. Property (land or a building—or part of a building—or both) held (by the owner or by the lessee under
a finance lease) to earn rentals or for capital appreciation or both, rather than for: (a) use in the production or
supply of goods or services or for administrative purposes; or (b) sale in the ordinary course of business.
33
Property, Plant and Equipment (IPSAS-17)
1. The principal issues in accounting for property, plant and equipment are the
i. recognition of the assets
ii. the determination of their carrying amounts
iii. and the depreciation charges
iv. impairment losses to be recognized in relation to them

c. ii, iii and iv d. All of the above.
2. IPSAS 17 deals with
a. Tangible items that (i) are held for use in the production or supply of goods or services, for rental to
others, or for administrative purposes and (ii) are expected to be used during more than one reporting
period.
b. Intangible items that (i) are held for use in the production or supply of goods or services, for rental to
others, or for administrative purposes and (ii) are expected to be used during more than one reporting
period.
c. Tangible and intangible items that (i) are held for use in the production or supply of goods or services,
for rental to others, or for administrative purposes and (ii) are expected to be used during more than
one reporting period.
d. Tangible and intangible items that (i) are held for use in the production or supply of goods or services,
for rental to others, or for administrative purposes and (ii) are expected to be used during more than
three reporting period.
3. Property, plant and equipment (PPE) is initially recognised at
a. Fair Value b. cost
c. Higher of fair value or cost d. Lower of fair value or cost
IPSAS 17 exhaustively prescribes the unit of measure for recognition, i.e., what constitutes an item of
PPE and thereby leaves no room for applying judgment in recognition criteria.
a. True b. False
5. Which of the following shall not accounted as PPE under IPSAS 17
a. Specialist military equipment b. road networks
c. sewer system d. None of the given
6. IPSAS 17 in respect of Heritage assets
a. It requires recognition of heritage assets
b. It prohibits recognition of heritage assets
c. It neither requires nor prohibits the recognition of heritage assets
d. It requires as well as prohibits recognition of heritage assets
7. Cost of PPE
i. Purchase price
ii. import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
iii. any other cost directly attributable to bringing the asset to the location and working condition for its
intended use.
iv. the estimated cost of dismantling and removing the asset and restoring the site.

8. Changes to an existing decommissioning or restoration obligation are generally
a. added to or deducted from the cost of the related asset
34
b. accounted for in surplus or deficit
c. accounted for as a separate asset or liability
d. added to or deducted from the accumulated surplus or deficit (retained earning)
9. Pick the correct regarding initial recognition of a PPE
a. An asset should initially be measured at its costs
b. If an asset is acquired in a non-exchange transaction, its cost is determined at fair value at the time
of acquisition.
c. If PP&E is acquired in exchange for a nonmonetary asset or assets, or a combination of monetary and
non-monetary assets then the asset is measured at fair value unless the fair value is not reliably
measurable.
d. All of the above
10. An entity shall choose
a. cost model as its accounting policy and shall apply that policy to an entire class of PPE.
b. revaluation model as its accounting policy and shall apply that policy to an entire class of
PPE
c. either the cost model or the revaluation model as its accounting policy and shall apply that
policy to an entire class of PPE.
d. both the cost model and the revaluation model as its accounting policy and shall apply that
particular policy to separate class of PPE
a. Under Revaluation Model an item of PPE whose fair value can be measured reliably shall be
carried at a revalued amount, being its fair value at the date of the revaluation less any
subsequent accumulated depreciation and subsequent accumulated impairment losses.
b. If the carrying amount of a class of assets is increased as a result of a revaluation, the increase is
credited directly to surplus or deficit
c. Both A&B
12. Pick the INCORRECT relating to Decrease in carrying amount after revaluation as per IPSAS 17
a. the decrease is initially debited directly to revaluation surplus relating to the same class of assets.
b. To the extent that the decrease exceeds the amount of the corresponding revaluation surplus, the
excess is recognized in surplus or deficit.
c. If a re-measured asset is sold, the revaluation reserve is reclassified directly to surplus or deficit
a. Revaluation increases and decreases relating to individual assets within a class of PPE must be offset
against one another within that class and not in respect of assets in different classes.
b. Each part of an item of PPE with a cost that is significant in relation to the total cost of the item must
be depreciated separately.
c. Both A&B
14. The depreciation charge for each period is recognized in
a. surplus or deficit
b. carrying amount of that particular asset
c. surplus or deficit unless it is included in the carrying amount of another asset.
d. All of the above
15. In terms of IPSAS 17 the residual value of an asset must be reviewed at least
a. at each annual reporting date b. once in every two reporting period
c. once in every three reporting period d. once in every five reporting period
35
16. If a condition of continuing to operate an item of property, plant and equipment (for example, an
aircraft) is performing regular major inspections, the cost of each major inspection is recognized in the carrying
amount of the item of property, plant and equipment as a replacement even if the recognition criteria are not
satisfied.
a. True b. False
17. Pick the incorrect statement in light of IPSAS 17
a. If expectations differ from previous estimates, the change(s) must be accounted for as a change in an
accounting estimate in accordance with IPSAS 19
b. Land and buildings are separable assets and are accounted for separately, even when they are
acquired together with exception such as quarries and sites used for landfill
c. To determine whether an item of property, plant and equipment is impaired, an entity applies IPSAS
21/IPSAS 26 as the case may be.
18. Pick the correct statement on account of derecognition of a PPE in terms of IPSAS 17
a. a PPE is derecognised on disposal or when no future economic benefits are expected from its use
b. The gain or loss arising from derecognition of an item of PPE is in general included in surplus or deficit
when the item is derecognized.
c. Gains are not classified as revenue.
d. All of the above
a. Entities are not required to recognize assets for reporting periods beginning on a date within two
years following the date of first adoption of IPSAS
b. Entities are not required to recognize assets for reporting periods beginning on a date within five
c. Entities are not required to recognize assets for reporting periods beginning on a date within three
d. Entities are not required to recognize assets for reporting periods beginning on a date within seven
20. Initial measurement of PPE at first-time adoption of accrual IPSASs is done at
a. Cost
b. Fair value
c. Investment properties acquired at no cost, or for a nominal cost-Cost is the investment property’s fair
value as at the date of acquisition
d. Any of the above as the case may be.
IPSAS-17
1 2 3 4 5 6 7 8 9 10
D A B B D C D A D C
11 12 13 14 15 16 17 18 19 20
A C D C A B A D B D
4. IPSAS 17 DOES NOT PRESCRIBE THE UNIT of measure for recognition, i.e., what constitutes an item of
PPE. Thus, judgment is required in applying the recognition criteria to an entity’s specific circumstance
11. If the carrying amount of a class of assets is increased as a result of a revaluation, the increase is credited
directly TO REVALUATION SURPLUS.
12. If a re-measured asset is sold, the revaluation reserve is reclassified directly to REVENUE RESERVES.
Recognition in surplus or deficit is not permissible.
36
16. If a condition of continuing to operate an item of property, plant and equipment (for example, an
aircraft) is performing regular major inspections, the cost of each major inspection is recognized in the carrying
amount of the item of property, plant and equipment as a replacement even if the RECOGNITION CRITERIA ARE
SATISFIED.
17. If expectations differ from previous estimates, the change(s) must be accounted for as a change in an
accounting estimate in accordance with IPSAS 3, Accounting Policies, Changes in Accounting Estimates and
Errors.
37
Segment Reporting (IPSAS-18)
1. A distinguishable activity or group of activities of an entity for which it is appropriate to separately report
financial information for the purpose of evaluating the entity’s past performance in achieving its objectives and
for making decisions about the future allocation of resources is referred to as
a. Associate b. Component
c. Segment d. Block
2. Segments are classified into
a. Service segment and Geographical Segment b. Parent segment and Associate Segment
c. Owned Segment and Hired Segment d. Reporting Segment and Administrative Segment
3. If both consolidated financial statements of a government or other economic entity and the separate
financial statements of the parent entity are presented together, segment information need
a. be presented only on the basis of the separate financial statements.
b. be presented only on the basis of the consolidated financial statements.
c. be presented on the basis of both the consolidated and separate financial statements
d. not be presented.
4. Identification of reportable segment
a. An entity generally identifies service and geographical segments on the basis of its organizational
structure and internal reporting system.
b. In most cases, the major classifications of activities identified in budget documentation will best
reflect the segment structure.
c. In most cases, the segments reported to the governing body and senior management of the public
entity will also reflect the segments reported in the financial statements.
d. All of the above
Government departments and agencies are usually managed along service lines because this reflects
the way in which major outputs are identified, their achievements monitored, and their resource needs
identified and budgeted.
a. True b. False
a. An entity must disclose segment revenue and segment expense for each segment.
b. Segment revenue from budget appropriation or similar allocation, segment revenue from other
external sources, and segment revenue from transactions with other segments should be reported
separately.
c. An entity must also disclose the total carrying amount of segment assets and segment liabilities for
each segment
d. All of the above
a. An entity must further disclose the total cost incurred during the period to acquire segment assets
that are expected to be used during more than one period for each segment
b. Assets that are jointly used by two or more segments should be allocated to segments if, and only if,
their related revenues and expenses also are allocated to those segments.
c. If a segment is identified as a segment for the first time in the current period, prior period segment
data that is presented for comparative purposes should not be restated to reflect the newly reported
segment as a separate segment.
a. An entity may report on the basis of more than one segment structure, for example by both service
and geographical segments.
38
b. A primary and secondary segment reporting structure can be adopted, with only limited disclosures
made about both the segments.
c. Both A&B
IPSAS-18
1 2 3 4 5 6 7 8
C A B D A D c A
7. If a segment is identified as a segment for the first time in the current period, prior period segment data
that is presented for comparative purposes SHOULD BE RESTATED to reflect the newly reported segment as a
separate segment, unless it is impracticable to do so
8. A primary and secondary segment reporting structure can be adopted, with only limited disclosures
made about secondary segments.
39
Provisions, Contingent Liabilities and Contingent Assets (IPSAS-19)
1. Objectives of IPSAS 19 are

a. To ensure that appropriate recognition criteria and measurement bases are applied to provisions,
contingent liabilities and contingent assets
b. To ensure that sufficient information is disclosed in the notes to enable users to understand their
nature, timing and amount.
c. Both A&B
2. IPSAS 19 does not apply to except
a. provisions and contingent liabilities arising from social benefits
b. provisions and contingent liabilities arising from financial instruments that are carried at fair value.
c. provisions and contingent liabilities arising from financial leases.
3. Liability means
a. A present obligation of the entity arising from past events, the settlement of which is expected to
result in an outflow from the entity of resources embodying economic benefits.
b. A past obligation of the entity arising from present events, the settlement of which is expected to
c. A present obligation of the entity arising from present events, the settlement of which is expected to
d. A present obligation of the entity arising from either past or present events, the settlement of which
is expected to result in an outflow from the entity of resources embodying economic benefits.
4. 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 control of the entity
is called
a. liability b. contingent liability
c. provision d. contingent asset
5. A possible asset 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 control of the entity
is referred to as
a. liability b. reserve
c. provision d. contingent asset
6. Provision means
a. a liability of certain timing or amount.
b. a liability of certain timing but uncertain amount.
c. a liability of certain amount but uncertain timing
d. a liability of uncertain timing or amount.
7. No provision shall be recognised except when
a. an entity has a present obligation (legal or constructive) as a result of a past event
b. it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation
c. a reliable estimate can be made of the amount of the obligation.
d. All of the above
a. An entity should recognize contingent liabilities or contingent assets
b. An entity should not recognize contingent liabilities or contingent assets
c. Recognition of contingent liabilities or contingent assets is at the discretion of the entity
40
d. Recognition of contingent liabilities or contingent assets is subject to amount involved and
circumstances related to it.
a. The estimates of outcome and financial effect of the present obligation are determined mainly by the
judgment of the management of the entity
b. Objective sources of information therefore include experience of similar transactions and, in some
cases, reports from independent experts.
c. Events after the reporting date must not be taken into account in the estimate
10. When the provision being measured involves a large population of items and the obligation is based on
a distribution of probabilities the method that should be used
a. The expected value method (statistical method)
b. The average value method
c. The range method
11. Where there is a continuous range of possible outcomes, and each point in that range is as likely as any
other
a. the highest point of the range is used
b. the mid-point of the range is used.
c. the lowest point of the range is used.
d. Any point of the range is used giving due justification.
a. Where a single obligation is being measured and no statistical experience is available this standard
provides that the individual most likely outcome may be the best estimate of the liability.
b. Where the effect of the time value of money is material, future outflows of resources expected must
be discounted to avoid overstatement of provision.
c. Future events that may affect the amount required to settle an obligation should be reflected in the
amount of a provision where there is sufficient objective evidence that they will occur
d. If future events relate to possible new legislation, its effects can be taken into account by the public
sector entity in all cases.
a. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by
another party, the reimbursement shall be recognised when, and only when, it is virtually certain that
reimbursement will be received if the entity settles the obligation.
b. The reimbursement shall be treated as a separate asset and the amount recognised for the
reimbursement shall not exceed the amount of the provision.
c. In the statement of financial performance, the expense relating to a provision may be presented net
of the amount recognised for a reimbursement
d. All of the above
14. a. Provisions
a. should be reviewed at each reporting date and adjusted to reflect the current best estimate.
b. should not be reviewed at each reporting date.
c. should be reversed at each reporting date
d. should not be reversed at each reporting date
Provisions shall be recognised for future operating losses.
a. True b. False
16. If an entity has a contract that is onerous,
a. the present obligation under the contract shall be recognised and measured as a provision.
41
b. the present obligation under the contract shall not be recognised and measured as a provision.
c. the present obligation under the contract shall be recognised as liability
a. A provision for restructuring costs is not recognised until there is a formal plan and details of the
restructuring have been communicated to those affected by the plan
b. Provisions are not recognised for repairs or maintenance of own assets or for self- insurance before
an obligation is incurred
c. Both A&B
18. Public Sector entity should disclose the details as required by IPSAS 19
i. the carrying amount at the beginning and end of the period
ii. additional provisions made in the period, including increases to existing provisions
iii. amounts provisioned used during the period
iv. unused amounts reversed during the period and
v. the increase during the period in the discounted amount arising from the passage of time and the
effect of any change in the discount rate.

19. Public Sector entity should disclose the details as required by IPSAS 19
a. a brief description of the nature of the obligation and the expected timing of any resulting outflows
of economic benefits
b. an indication of the uncertainties about the amount or timing of those outflows with adequate
information wherever required
c. the amount of any expected reimbursement, stating the amount of any asset that has been recognised
for that expected reimbursement
20. A contract in which the unavoidable costs of meeting the obligations under the contract exceed the
economic benefits expected to be received under it is called
a. Arduous Contract b. Compulsion Contract
c. Onerous Contract d. Provisional Contract
IPSAS-19
1 2 3 4 5 6 7 8 9 10
C C A B D D D B C A
11 12 13 14 15 16 17 18 19 20
B D D A B A C D D C
9. Events after the reporting date must also be taken into account in the estimates
12. If future events relate to possible new legislation, its effects can only be taken into account by the public
sector entity when it is virtually certain to be enacted
15. Provisions SHALL NOT BE recognised for future operating losses.
42
Related Party Disclosures (IPSAS-20)
1. IPSAS 20 requires the disclosure of the existence of related party relationships where
a. control exists b. control does not exist
c. whether control exist or not d. where partial control exists.
2. In terms of IPSAS 20 the principal issues in disclosing information about related parties are
a. identifying which parties control or significantly influence the reporting entity
b. determining what information should be disclosed about transactions with those parties.
c. Both A&B
3. Parties are considered to be related if except
a. one party has the ability to control the other party or exercise significant influence over the other
party in making financial and operating decisions
b. all the parties have the ability to control the other party or exercise significant influence over the
other party in making financial and operating decisions
c. the related party entity and another entity are subject to common control.
4. Related parties includes
i. Entities that directly, or indirectly through one or more intermediaries, control, or are controlled by
the reporting entity
ii. Associates
iii. Individuals owning, directly or indirectly, an interest in the reporting entity that gives them significant
influence over the entity, and close members of the family of any such individual
iv. Key management personnel, and close members of the family of key management personnel
a. ii, iii and iv b. i, ii and iv

c. i, ii and iii d. All of the above
5. All directors or members of the governing body of the entity, where that body has the authority and
responsibility for planning, directing and controlling the activities of the entity are regarded as
a. key management personnel b. strategic management personnel
c. Chief Accounting Authority d. parent entity
a. Related party relationships where control exists should be disclosed only when there have been
transactions between the related parties.
b. items of a similar nature may be disclosed in aggregate except when separate disclosure is necessary
to provide relevant and reliable information for decision making and accountability purposes.
c. Both A&B
7. Disclosure requirement in terms of IPSAS-20
a. The nature of the related party relationships
b. The types of transactions that have occurred and
c. The elements of the transactions necessary to clarify the significance of these transactions to its
operations and sufficient to enable the financial statements to provide relevant and reliable information
for decision making and accountability purposes.
d. All of the above
8. Disclosure in respect of remuneration of key management personnel in accordance with IPSAS-20
a. Major classes wise aggregate remuneration of key management personnel and the number of
individuals, determined on a full time equivalent basis
43
b. The total amount of all other remuneration and compensation provided to key management
personnel, and close members of the family of key management personnel should be shown separately
c. Unusual loans given to key management personnel and their details such as amount of loans with
terms and condition, amount of loan recovered and balance outstanding during the period.
d. All of the above
IPSAS-20
1 2 3 4 5 6 7 8
A C A D A B D D
3. Parties are considered to be related if one party has the ability to control the other party or exercise
significant influence over the other party in making financial and operating decisions or if the related party entity
and another entity are subject to common control.
44
Impairment of Non-Cash-Generating Assets (IPSAS-21)
1. Objectives of IPSAS-21 are

a. to prescribe the procedures that an entity applies to determine whether a non-cash-generating asset
is impaired and to ensure that impairment losses are recognized.
b. to specify when an entity would reverse an impairment loss and prescribes disclosures.
c. Both A&B
2. An impairment loss of a non-cash-generating asset is the amount by which
a. the carrying amount of an asset exceeds its recoverable amount
b. its recoverable amount of an asset exceeds its carrying amount
c. the sale proceeds of an assets is less than the cost price of that asset.
d. the cost price of that assets is less than the sale proceeds of that asset.
3. Recoverable service amount of a non-cash generating asset is the
a. Lower of a non-cash-generating asset’s fair value less cost to sell and its value in use.
b. higher of a non-cash-generating asset’s fair value less cost to sell and its value in use.
c. fair value of non-cash generating asset less cost to sell
d. value in use of non-cash generating asset
i. Inventories
ii. Assets arising from construction contracts
iii. Financial Instruments
iv. Investment property that is measured using the fair value model
v. Non-cash-generating PPE and intangible asset that is measured at revalued amounts

c. i, iii, iv and v d. All of the above
a. An entity must assess at each reporting date whether there is any indication that an asset may be
impaired. If any such indication exists, the entity must estimate the recoverable service amount of the
asset.
b. If no indication of a potential impairment loss is present, IPSAS 21 requires an entity to make a formal
estimate of recoverable service amount.
c. It is not always necessary to determine both an asset’s fair value less costs to sell and its value in use.
If either of these amounts exceeds the asset’s carrying amount, the asset is not impaired and it is not
necessary to estimate the other amount.
a. If there is no active market for an asset, the IPSAS 21 describes possible alternative approaches to
determine the fair value less costs to sell
b. Where determining the amount obtainable from the arm’s length transaction is not possible, the
entity can use the value in use of the asset as its recoverable service amount.
c. Both A&B
7. As per IPSAS 21 the present value of the asset’s remaining service potential has been defined
a. the value in use of a non-cash-generating asset
b. the fair value of non-cash generating asset
c. the carrying amount of non-cash generating asset
45
8. Which of the following is not one of the three approaches of determining value in use
a. Depreciated replacement cost approach b. Restoration cost approach and
c. Conversion cost approach d. Service units approach
9. Pick the correct regarding Depreciated replacement cost approach
a. The replacement cost of an asset is the cost to replace the asset’s gross service potential.
b. An asset may be replaced either through reproduction (replication) of the existing asset or through
replacement of its gross service potential.
c. The depreciated replacement cost is measured as the reproduction or replacement cost of the asset,
whichever is lower, less accumulated depreciation calculated on the basis of such cost, to reflect the
already consumed or expired service potential of the asset.
d. All of the above
a. Under the Restoration Cost Approach the present value of the remaining service potential of the asset
is determined by subtracting the estimated restoration cost of the asset from the current cost of
replacing the remaining service potential of the asset before impairment.
b. Under the Service unit Approach the present value of the remaining service potential of the asset is
determined by reducing the current cost of the remaining service potential of the asset before
impairment to conform to the reduced number of service units expected from the asset in its impaired
state.
c. Both A&B
IPSAS-21
1 2 3 4 5 6 7 8 9 10
C A B D B C A C D C
5. If no indication of a potential impairment loss is present, IPSAS 21 DOES NOT REQUIRE an entity to make
a formal estimate of recoverable service amount
46
Disclosure of Information about the General Government Sector (IPSAS-22)
1. Under statistical bases of financial reporting the public sector comprises

a. the general government sector (GGS)
b. the public financial corporations sector (PFCS)
c. public non-financial corporations sector (PNFCS)
2. The general government sector encompasses the central operations of government and
a. typically includes all those resident non-market non-profit entities that have their operations funded
primarily by the government and government entities.
b. typically includes all those non-resident market profit making entities that don’t have their operations
funded primarily by the government and government entities
c. Both A&B
3. The general government sector
a. includes public financial corporations but does not include public non-financial corporations
b. includes public non-financial corporations but does not include public financial corporations
b. includes public financial corporations or public non-financial corporations
d. does not includes public financial corporations or public non-financial corporations
4. Pick the correct regarding Financial Statement for the Government and statistical bases of financial
reporting
a. While financial statements consolidate only controlled entities, these provisions do not apply for
statistical bases of financial reporting
b. The consolidated group in accounting therefore differs from that in the statistical bases of financial
reporting.
c. Both A&B
The general government sector does not apply the requirements of IPSAS 6, Consolidated and Separate
Financial Statements in respect of entities in the public financial corporations and public non-financial
corporations sectors.
a. True b. False
6. IPSAS 22 reflects the view that
a. the consolidated financial statements of a government which elects to disclose information about the
general government sector are to be aggregated to present the general government sector as one sector
of the government reporting entity
b. the consolidated financial statements of a government which elects to disclose information about the
general government sector are to be disaggregated to present the general government sector as one
sector of the government reporting entity
c. the consolidated financial statements of a government which does not elect to disclose information
about the general government sector are to be aggregated to present the general government sector
as one sector of the government reporting entity
d. . the consolidated financial statements of a government which does not elect to disclose information
about the general government sector are to be disaggregated to present the general government sector
as one sector of the government reporting entity
7. In terms of IPSAS 22
a. The general government sector must recognize its investment in the public financial corporations
sector and public non-financial corporations sector as an asset and must account for that asset at the
carrying amount of the net assets of its investees.
47
b. The general government sector must not recognize its investment in the public financial corporations
sector and public non-financial corporations sector as an asset and must not account for that asset at
the carrying amount of the net assets of its investees.
c. The general government sector may or may not recognize its investment in the public financial
corporations sector and public non-financial corporations sector as an asset and may or may not account
for that asset at the carrying amount of the net assets of its investees.
d. None of the above.
8. Disclosures in terms of IPSAS 22
i. Assets and liabilities by major class
ii. Revenue and Expenses by major class
iii. Net assets/equity and total revaluation increments and decrements and other items of revenue and
expense recognized directly in net assets/equity
iv. Surplus or deficit
v. Cash flow from operating, investing and financing activities

9. The manner of presentation of the general government sector disclosures SHOULD BE NO MORE
PROMINENT than the government’s financial statements prepared in accordance with IPSASs
a. True b. False
a. Entities preparing general government sector disclosures must disclose the significant controlled
entities that are included in the general government sector.
b. Reason for the entities shown in prior excluded in the current period reporting shall also be disclosed
c. The general government sector disclosures must be reconciled to the consolidated financial
statements of the government showing separately the amount of the adjustment to each equivalent
item in those financial statements
IPSAS-22
1 2 3 4 5 6 7 8 9 10
D A D C A B A D A D
48
Revenue from Non-Exchange Transactions-Taxes and Transfers (IPSAS-23)
1. The objective of IPSAS 23 is to
a. To prescribe requirements for the financial reporting of revenue arising from non-exchange
transactions, other than non-exchange transactions that give rise to an entity combination.
b. To prescribe requirements for the financial reporting of revenue arising from non-exchange
transactions, that give rise to an entity combination.
c. To prescribe requirements for the financial reporting of revenue arising from non-exchange
transactions including the non-exchange transactions that give rise to an entity combination.
2. Which of the following is included in transfer?
ii. Debt forgiveness and liabilities assumption ii. Fine/Penalties
iii. Bequest iv. Gift/donation
v. Services in kind

3. An asset acquired through a non-exchange transaction is initially measured at its
a. historical cost
b. fair value as at the date of acquisition.
c. current market cost at the date of acquisition
d. Lowest of the given above.
4. Recognition of revenue from non-exchange transactions is done except
a. An inflow of resources from a non-exchange transaction recognized as an asset is recognized as
revenue, except to the extent that a liability is also recognized in respect of the same inflow.
b. When an entity satisfies a present obligation recognized as a liability in respect of an inflow of
resources from a non-exchange transaction recognized as an asset, it reduces the carrying amount of
the liability recognized and recognizes an amount of revenue equal to that reduction
c. Revenue from non-exchange transactions is measured at the amount of the increase in net assets
recognized by the entity.
a. An entity must recognize an asset in respect of taxes when the taxable event occurs and the asset
recognition criteria are met
b. An entity must not recognize an asset in respect of taxes even when the taxable event occurs and the
asset recognition criteria are met
c. An entity must recognize an asset in respect of taxes even when the taxable event does not occur and
the asset recognition criteria are not met.
d. Recognizing an asset or not in respect of taxes when the taxable event occurs and the asset
recognition criteria are met is at the discretion of the entity.
6. Taxation revenue is determined at
a. a net amount by reducing for expenses paid through the tax system.
b. a gross amount and not reduced for expenses paid through the tax system.
c. both gross amount and net amount
d. Either A or B
7. Pick the correct one regarding Tax Accounting
a. Tax Revenue cannot be reduced by other types of expenses (e.g., subsidies to health insurance
premiums) that are paid in a simplified manner through the tax system, for example by offsetting against
the tax liability.
49
b. In fact, the (collected) taxation revenue must be increased by expenses paid through the tax system
for the presentation in the financial statements.
c. Taxation revenue cannot be grossed up for the amount of tax expenditures
d. All of the above
a. Tax expenditures are foregone revenue, not expenses, and do not give rise to inflows or outflows of
resources – that is, they do not give rise to assets, liabilities, revenue or expenses of the taxing
government.
b. The key distinction between expenses paid through the tax system and tax expenditures is that for
expenses paid through the tax system, the amount is available to recipients irrespective of whether they
pay taxes, or use a particular mechanism to pay their taxes.
c. Both A&B
9. Transferred assets are measured at
a. fair value at the date of acquisition
b. historical cost of the asset
c. current market value of the asset at the date of acquisition
d. Zero.
10. Accounting of revenue generated from Fee, fine and penalty are done except
a. Fees, fines and penalties as determined by a court or other law enforcement are recognized as asset
when the receivable meets the definition of an asset.
b. Fees, fines and penalties impose on the recipient an obligations which may be recognized as a liability.
c. Assets arising from fines are measured at the best estimate of the inflow of resources to the entity.
11. A transfer made according to the provisions of a deceased person’s will is known as
a. Heritance b. Chase
c. Bequest d. Grant
12. Bequests are generally measured at fair value at the date of acquisition.
a. Zero
b. historical cost of the asset
c. current market value of the asset at the date of acquisition
d. fair value at the date of acquisition.
13. Accounting of Gift and donation in terms of IPSAS 23
a. Cash or other monetary gifts or donations as well as goods in-kind are generally recognized on the
date on which the gift or donation is received.
b. Goods in-kind are generally recognized as assets upon receipt of the goods.
c. If goods in-kind are received without conditions attached, revenue is recognized immediately. If
conditions are attached, a liability is recognized, which is reduced and revenue recognized as the
conditions are satisfied.
14. On initial recognition, gifts and donations including goods in-kind are measured at their
a. fair value at their date of acquisition
b. historical cost of the gifts, donation and goods-in-kind
c. current market value of the asset at their date of acquisition
d. Zero.
15. In terms of IPSAS 23 Services in-kind provided by individuals to public sector entities in a non-exchange
transaction can be recognized as an asset in surplus or deficit.
a. True b. False
50
IPSAS-22
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
A D B D A B D C A B C D D A A
51
Presentation of Budget Information in Financial Statements (IPSAS-24)
1. Objectives of IPSAS 24 are to
a. require a comparison of budget amounts and the actual amounts arising from execution of the budget
to be included in the financial statements of entities which are required to, or elect to, make publicly
available their approved budget(s) and for which they are, therefore, held publicly accountable.
b. also requires disclosure of an explanation of the reasons for material differences between the budget
and actual amounts.
c. Both A&B
2. The original budget adjusted for all reserves, carry over amounts, transfers, allocations, supplemental
appropriations, and other authorized legislative, or similar authority, changes applicable to the budget period is
called
a. Revised Budget b. Final Budget
c. Additional Budget d. Outcome Budget
3. Presentation of a comparison of budget and actual amounts is done
a. separate additional financial statement (referred to as a statement of comparison of budget and
actual amounts)
b. as additional budget columns in the financial statements
c. Both A&B
d. either A or B
4. Disclosure requirement in Financial Statement relating to IPSAS 24
a. an entity must present an explanation of whether changes between the original and final budget are
a consequence of reallocations within the budget, or of other factors.
b. Such disclosure shall be made in the notes to the financial statements or in a report issued before, at
the same time as, or in conjunction with the financial statements
c. Where such disclosures are made in the report, it must include a cross-reference to the report in the
notes to the financial statements.
d. All of the above
An entity must explain in the notes to the financial statements the budgetary basis, classification basis
adopted in the approved budget, period of the approved budget and entities included in approved budget.
a. True b. False
a. Where the financial statements and budget are not prepared on a comparable basis, the actual
amounts presented on a comparable basis to the budget must not be reconciled to the amounts
presented in the financial statements
b. If the accrual basis is adopted for the budget, total revenues, total expenses and net cash flows from
operating activities, investing activities and financing activities shall be reconciled
c. If a basis other than the accrual basis is adopted for the budget, net cash flows from operating
activities, investing activities and financing activities shall be reconciled
d. The reconciliation must be presented either in the comparison of budget and actual amounts or in
the notes to the financial statements.
IPSAS-23
1 2 3 4 5 6
C B D D A A
52
Impairment of Cash-Generating Assets (IPSAS-26)
* General provision and terms of impairment of cash generating assets are similar to that non-cash generating
assets

i. assets arising from construction contracts
ii. financial assets/Instruments
iii. Investment property that is measured at fair value
iv. deferred tax assets
v. Biological Assets

Irrespective of whether there is any indication of impairment, an entity must also test an intangible asset
with an indefinite useful life or an intangible asset not yet available for use for impairment annually by comparing
its carrying amount with its recoverable amount.
a. True b. False
3. Pick the correct regarding Testing impairment for Intangible assets
a. This impairment test may be performed at any time during the reporting period, provided it is
performed at the same time every year.
b. Different intangible assets may be tested for impairment at different times. However, if such an
intangible asset was initially recognized during the current reporting period, that intangible asset must
be tested for impairment before the end of that period.
c. Both A&B
4. Recognizing and measuring an impairment loss except
a. The impairment loss is recognized immediately in surplus or deficit
b. After the recognition of an impairment loss, the depreciation (amortization) charge for the asset is
adjusted for past and future periods to allocate the asset’s revised carrying amount, less its residual
value (if any), on a systematic basis over its remaining useful life
c. If it is not possible to estimate the recoverable amount of the individual asset, an entity must
determine the recoverable amount of the cash-generating unit to which the asset belongs
5. Pick the correct statements regarding cash-generating unit
a. If an active market exists for the output produced by an asset or group of assets, that asset or group
of assets is identified as a cash-generating unit even if some or all of the output is used internally
b. If the cash inflows generated by any asset or cash-generating unit are affected by internal transfer
pricing, an entity must use management’s best estimate of future price(s) that could be achieved in
arm’s length transactions
c. Cash-generating units are identified consistently from period to period for the same asset or types of
assets, unless a change is justified
6. When an impairment loss is recognized for a cash-generating unit
a. the impairment loss is allocated to reduce the carrying amount of cash-generating assets of the unit
on a pro rata basis, based on the carrying amount of each asset in the unit.
b. the impairment loss is allocated to reduce the carrying amount of cash-generating assets of the unit
as a whole.
53
c. the impairment loss is allocated to reduce the carrying amount of cash-generating assets of the unit
on a blank rate irrespective of the carrying amount of each asset in the unit.
d. the impairment loss is allocated to reduce the carrying amount of cash-generating assets of the unit
equally irrespective of the carrying amount of each asset in the unit.
7. Carrying amount of an asset cannot be reduced below the highest of
a. Its fair value less costs to sell (if determinable)
c. Its value in use (if determinable)
c. Zero
d. All of the above
8. Reversing an impairment loss
i. If any such indication exists, the entity must estimate the recoverable amount of the asset, the
impairment loss recognized in prior periods for an asset is reversed by increasing the carrying amount
of the asset to its recoverable amount
ii. The increased carrying amount of an asset due to a reversal of an impairment loss cannot exceed the
carrying amount that would have been determined had no impairment loss been recognized for the
asset in prior years
iii. A reversal of an impairment loss for an asset is recognized immediately in Statement of Equity/Assets.
iv. After the reversal of an impairment loss, the depreciation (amortization) charge for the asset is
adjusted in future periods to allocate the asset’s revised carrying amount, less its residual value (if any),
on a systematic basis over its remaining useful life
v. When reversal of impairment loss is recognized for a cash-generating unit, it is allocated to increase
the carrying amount of cash-generating assets of the unit on a pro rata basis, based on the carrying
amount of each asset in the unit

9. Where a non-cash-generating asset contributes service potential to a cash-generating unit, in case of
reversal of impairment loss
a. a fixed part of the amount of such reversal is allocated to a non-cash-generating asset
b. no part of amount of such reversal is allocated to a non-cash-generating asset.
c. the amount of such reversal is allocated to a non-cash-generating asset on a pro-rata basis
d. Any of the above as deemed appropriate by the entity concerned.
10. Re-designation of cash-generating and non-cash-generating assets and vice-versa include
a. The re-designation of an asset from a cash-generating asset to a non-cash-generating asset or from a
non-cash-generating asset to a cash-generating asset can only occur when there is clear evidence that
such a re-designation is appropriate.
b. A re-designation, by itself, does not necessarily trigger an impairment test or a reversal of an
impairment loss.
c. At the subsequent reporting date after a re-designation, an entity must at least consider sources
regarding whether impairment exist
d. All of the above
An entity shall disclose the criteria developed by the entity to distinguish cash-generating assets from
non-cash-generating assets.
a. True b. False
54
IPSAS-26
1 2 3 4 5 6 7 8 9 10 11
D A C B D A D C B D A
4. Adjusted for FUTURE PERIOD.

8. A reversal of an impairment loss for an asset is recognized immediately in SURPLUS OR DEFICIT
55
Agriculture (IPSAS-27)
1. IPSAS 27 It deals mainly with the accounting treatment for biological assets during the period of growth,
degeneration, production, and procreation, and for the initial measurement of agricultural produce
a. at a point before planting b. at the point of harvest
c. at a point after harvest d. All of the above
a. Agricultural activity is the management by an entity of the biological transformation of living animals
or plants (biological assets) for sale, or for distribution at no charge, or for a nominal charge, or for
conversion into agricultural produce, or into additional biological assets.
b. Agricultural produce is the harvested product of the entity’s biological assets, whereas a biological
asset is a living animal or plant.
c. Biological transformation comprises the processes of growth, degeneration, production, and
procreation that cause qualitative or quantitative changes in a biological asset.
d. All of the above
3. Costs to sell are
a. the incremental costs directly attributable to the disposal of an asset, excluding finance costs and
income taxes.
b. the incremental costs directly attributable to the disposal of an asset including finance costs but
excluding income taxes.
c. the incremental costs directly attributable to the disposal of an asset including income taxes but
excluding finance costs.
d. the incremental costs directly attributable to the disposal of an asset, including finance costs and
income taxes.
a. A public sector entity using the cash basis of accounting has to apply IPSAS 27 for biological assets and
agricultural produce at the point of harvest when they relate to agricultural activity.
b. A public sector entity using the accrual basis of accounting has to apply IPSAS 27 for biological assets
and agricultural produce at the point of harvest when they relate to agricultural activity
c. A public sector entity using the cash or accrual basis of accounting has to apply IPSAS 27 for biological
assets and agricultural produce at the point of harvest when they relate to agricultural activity
d. A public sector entity has not to apply IPSAS 27 for biological assets and agricultural produce.
i. the processing of agricultural produce after harvest
ii. land related to agricultural activity
iii. intangible assets related to agricultural activity
iv. Biological assets held for the provision or supply of public services

6. Recognition of biological asset when, and only when except
a. it is probable that future economic benefits associated with the asset will flow to the entity
b. the entity controls the asset as a result of past events
c. the entity owns the asset as a result of past events
d. the fair value or cost of the asset can be measured reliably.
a. A biological asset shall be measured on initial recognition and at the end of each reporting period at
its fair value less costs to sell except where the fair value cannot be measured reliably.
56
b. Where the fair value cannot be measured reliably the biological asset shall be measured at its cost
less any accumulated depreciation and any accumulated impairment losses
c. For subsequent measurement, an entity that has previously measured a biological asset at its fair
value less costs to sell continues to measure the biological asset at its fair value less costs to sell until
disposal.
Contrary to biological assets, agricultural produce harvested from an entity’s biological assets will be
measured at its fair value less costs to sell only at the point of harvest.
a. True b. False
9. The IPSAS 27 assumes that
a. the fair value of agricultural produce at the point of harvest can never be measured reliably.
b. the fair value of agricultural produce at the point of harvest can always be measured reliably.
c. the fair value of agricultural produce at the point of harvest can sometime be measured reliably.
d. All of the above
a. If an active market exists for a biological asset or agricultural produce in its present location and
condition, the quoted price in that market is the appropriate basis for determining the fair value of that
asset
b. If an entity has access to different active markets, the entity uses the most relevant one.
c. Both A&B
11. Determination of fair value in case an active market is absent
a. The most recent market transaction price, provided that there has not been a significant change in
economic circumstances between the date of that transaction and the reporting date
b. Market prices for similar assets with adjustment to reflect differences
c. Sector benchmarks such as the value of an orchard expressed per export tray, bushel, or hectare, and
the value of cows expressed per kilogram of meat
d. All of the above
a. A gain or loss arising on initial recognition of a biological asset or agricultural produce at fair value less
costs to sell and a change in fair value less costs to sell of a biological asset should be is included in
surplus or deficit for the period in which it arises.
c. Therefore, the change in fair value less costs to sell of a biological asset will have a direct impact on
the statement of financial position.
c. Both A&B
a. An unconditional Government grant related to a biological asset measured at its fair value less costs
to sell shall be recognised in Statement of Change in Asset/Equity when, and only when, the Government
grant becomes receivable.
b. If a Government grant related to a biological asset measured at its fair value less costs to sell is
conditional, an entity shall recognise the Government grant in surplus or deficit when, and only when,
the conditions attaching to the Government grant are met.
c. Both A&B
14. Major disclosure requirement in terms of IPSAS 27 are
i. description of each group of biological assets ii. the aggregate gain or loss
iii. Fair value iv. Government Grants
57
IPSAS-27
1 2 3 4 5 6 7 8 9 10 11 12 13 14
B D A B D C D A B C D C B D
12. The change in fair value less costs to sell of a biological asset WILL NOT HAVE a direct impact on the
statement of financial position
13. An unconditional Government grant related to a biological asset measured at its fair value less costs to
sell shall be recognised in SURPLUS OR DEFICIT when, and only when, the Government grant becomes
receivable.
58
Financial Instruments: Presentation (IPSAS-28)
a. the classification of financial instruments, from the perspective of both the issuer and recipient
b. the circumstances in which financial assets and financial liabilities should be offset.
c. Both A&B
2. All aspects of the accounting for and disclosure of financial instruments are covered by
a. IPSAS 28 b. IPSAS 29
c. IPSAS 30 d. All of the above
3. Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities
is referred to as
a. Equity instrument b. Debt instrument
c. Financing instrument d. All of the given
4. Any contract that gives rise to both a financial asset of one entity and a financial liability or equity
instrument of another entity is referred to as
a. Equity instrument b. Debt instrument
c. Financing instrument d. None of the given
5. A financial instrument that gives the holder the right to put the instrument back to the issuer for cash
or another financial asset or is automatically put back to the issuer on the occurrence of an uncertain future
event or the death or retirement of the instrument holder is referred to as
a. Puttable Instrument b. Holding instrument
c. Lease instrument d. Swap instrument
6. A contract that requires the issuer to make specified payments to reimburse the holder for a loss it
incurs because a specified debtor fails to make payment when due in accordance with the original terms of a
debt instrument is known as
a. Insurance contract b. Discounting
c. Factoring Contract d. Financial guarantee contract
i. Interests in controlled entities/associates/joint ventures
ii. Employers’ rights and obligations under employee benefit plans
iii. Obligations arising from insurance contracts including financial guarantee contracts and with
insurance contracts that transfer financial risk.
iv. Share-based payment transactions.

8. Pick the incorrect one regarding financial guarantee contract from exchange & non exchange
a. IPSAS 28 distinguishes financial guarantee contracts arising from non-exchange transactions and
financial guarantee contracts arising from exchange transactions.
b. Financial guarantee contracts issued by way of non-exchange transactions are required to be treated
as financial instruments in accordance with IPSAS 28
c. Financial guarantee contracts issued by way of exchange transactions should not be treated as
financial instruments under any situation.
9. Contracts that are insurance contracts involving transfer of financial risk should be treated as
a. Financial instrument b. Insurance contract
c. Debt instrument d. Equity instrument
59
10. A critical feature in distinguishing a financial liability from an equity instrument is the existence of a
contractual obligation to deliver either cash or another financial asset.
a. True b. False
11. If an entity reacquires its own equity instruments,
a. those instruments (“TREASURY SHARES”) shall be deducted from net assets/equity.
b. no gain or loss shall be recognized in surplus or deficit of an entity’s own equity instruments
c. Both A&B
a. Interest, dividends, losses and gains relating to a financial instrument that is a financial liability are
recognized as asset or liability
b. Distributions to holders of an equity instrument are debited directly to surplus or deficit
c. Both A&B
13. Financial assets and financial liabilities shall be offset when an entity has a legally enforceable right to
set off and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
a. True b. False
IPSAS-28
1 2 3 4 5 6 7 8 9 10 11 12 13
B D A C A D C C A A C B A
1. The classification of financial instruments from the perspective of the ISSUER ALONE and not recipient
8. Financial guarantee contracts issued by way of non-exchange transactions are required to be treated as
financial instruments in accordance with IPSAS 28, whereas financial guarantee contracts issued by way of
exchange transactions should be treated as financial instruments unless an issuer elects to treat such contracts
as insurance contracts
12. Distributions to holders of an equity instrument are debited directly to NET ASSETS/EQUITY.
60
Financial Instruments: Recognition and Measurement (IPSAS-29)
1. The objective of IPSAS 29
a. To establish principles for recognizing and measuring financial assets, financial liabilities
b. To establish principles for recognizing and measuring some contracts to buy or sell non-financial
items.
c. Both A&B
a. Financial instruments are initially measured at fair value on date of acquisition or issue. This is
generally the same as cost.
b. For financial assets and financial liabilities at fair value through surplus or deficit, transaction costs
are recognized directly in surplus or deficit.
c. In the case of financial assets and liabilities not at fair value through surplus or deficit, transaction
costs that are directly attributable to the acquisition or issue are included in the cost.
d. All of the above
3. All financial assets and financial liabilities, including all derivatives and certain embedded derivatives,
are recognized in
a. the statement of financial position b. the statement of financial performance
c. Surplus or deficit d. All of the above
4. Any differences between the transaction price of the concessionary loan and fair value of the loan at
initial recognition are treated as follows
a. Where the concessionary loan is received by a public sector entity, the difference is accounted for in
accordance with IPSAS 23 (Revenue from Non-exchange Transaction)
b. Where the concessionary loan is granted by a public sector entity, the difference is treated as an
expense in surplus or deficit at initial recognition.
c. Both A&B
5. Contractual financial guarantees are
a. frequently provided for a substantial consideration to further the entity’s economic and social
objectives
b. frequently provided for no consideration or for nominal consideration to further the entity’s
economic and social objectives
c. rarely provided for a substantial consideration to further the entity’s economic and social objectives
d. rarely provided for no consideration or for nominal consideration to further the entity’s economic
and social objectives
6. Number of levels to determine the initial recognition of contractual financial guarantees are
a. 4 b. 3
c. 5 d. 2
7. At initial recognition, where no fee is charged or where the consideration is not fair value, an entity
firstly considers whether the fair value can be obtained through observation of quoted prices available in an
active market is known as
a. Level 1 b. Level 2
c. Level 3 d. None of the given
8. Where there is no active market for a directly equivalent guarantee contract, entities should apply a
mathematical valuation technique to obtain a fair value where this produces a reliable measure of fair value is
known as
a. Level 1 b. Level 2
c. Level 3 d. None of the given
61
9. When level 1 and 2 is not available to determine the fair value of contractual financial guarantee, level
3 is explored by reconciliation from the beginning balance to ending balance in accordance with provision given
in
c. IPSAS 32 d. IPSAS 19
10. Financial Assets for subsequent measurement are classified into four categories. Pick the correct one
i. Financial assets at fair value through surplus or deficit
ii. Financial assets at cost
iii. Loans and Receivables
iv. Held-to-maturity (HTM) investments,
v. Available-for-sale financial assets

11. Pick the correct in respect of financial assets at fair value through surplus or deficit’
a. are measured at their fair values with any deduction for transaction costs they may incur on sale.
b. Gains and losses are recognized in surplus or deficit.
b. Both A&B
c. None of the given
‘Loans and receivables’ and ‘held-to-maturity investments’ are measured at amortized cost using the
effective interest method. Gains or losses are recognized in surplus or deficit when the financial asset is
derecognized or impaired.
a. True b. False
13. If an entity sells or reclassifies more than an insignificant amount of Held-to-Maturity (HTM) investments
before maturity (other than in exceptional circumstances), any remaining HTM investments are reclassified as
a. Receivable
b. Held-to Maturity
c. Financial assets at Fair value through surplus or deficit
d. Available-for-sale
14. If an entity sells or reclassifies more than an insignificant amount of Held-to-Maturity (HTM) investments
before maturity (other than in exceptional circumstances), any financial assets shall not be classified as held to
maturity for the current and NEXT
a. Five Financial Reporting Periods b. Three Financial Reporting Periods
c. Two Financial Reporting Periods d. Four Financial Reporting Periods
a. Financial liabilities at fair value through surplus or deficit are measured at their fair value. Gains and
losses are recognized in surplus or deficit.
b. Other financial liabilities are measured at cost. Gains or losses are recognized in surplus or deficit
when the financial liability is derecognized or impaired.
c. After acquisition, most financial liabilities are measured at amortized cost.
d. All of the above
16. Financial liabilities that are measured at fair value with value changes recognized in surplus or deficit
include
a. derivative liabilities (unless designated as a hedging instrument in an effective hedge)
b. liabilities held for trading (e.g. short sales);and
c. any liabilities that the entity designates, at issuance, to be measured at fair value through surplus or
deficit.
d. All of the above
62
17. An entity derecognizes a financial asset only when
a. the contractual rights to the cash flows from the financial asset expire
b. the contractual rights to the cash flows from the financial asset are waived or
c. an entity transfers the financial asset and the transfer qualifies for derecognition
d. All of the above
18. An entity transfers a financial asset if it only either transfers the contractual right to receive the cash
flows of the financial asset, or retains the contractual rights to receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash flows in an arrangement.
a. True b. False
19. The transfer qualifies for derecognition if
a. the entity does not transfer substantially all the risks and rewards of ownership of the financial asset.
b. the entity transfers substantially all the risks and rewards of ownership of the financial asset.
c. the entity transfers ownership whether all the risks and rewards of ownership of the financial asset
are transferred or not substantially.
d. the entity retains the ownership and does not transfer substantially all the risks and rewards of
ownership of the financial asset
a. An entity shall remove a financial liability (or a part of a financial liability) from its statement of
financial position when, and only when, it is extinguished i.e. obligation specified in the contract is
discharged, waived, cancelled or expires.
b. In some circumstances, embedded derivatives must be separated from the host contract. If the fair
value of the embedded derivative cannot be measured reliably, the entire hybrid contract must be
designated as fair value through surplus or deficit.
c. Both A&B
21. Hedge accounting i.e. recognizing the offsetting effects of both the hedging instrument and the hedged
item in the same period’s surplus or deficit is permitted in certain circumstances, provided that the hedging
relationship is
a. clearly designated and documented
b. measurable
c. and actually effective.
d. All of the above
22. In terms of IPSAS 29, types of hedges are
a. Fair Value Hedges and Cash Flow Hedges
b. Present Value Hedges and Future Value Hedges
c. Premium Value Hedges and Discounted Hedges
23. In terms of IPSAS 29 under the Fair Value Hedge
a. the change in fair values of both the hedging instrument and the hedged item recognized in net
asset/equity when they occur
b. the change in fair values of both the hedging instrument and the hedged item recognized in surplus
or deficit when they occur
c. the change in fair values of hedging instrument and the hedged item recognized in net asset/equity
and surplus or deficit respectively
d. the change in fair values of hedging instrument and the hedged item recognized in surplus or deficit
and net asset/equity respectively
24. In terms of IPSAS 29 under the Cash Flow Hedge
a. the change in fair value of the hedging instrument is recognized in net assets/equity to the extent that
the hedge is effective until such time as the hedged future cash flows occur
63
b. the change in fair value of the hedging instrument is recognized in surplus or deficit to the extent that
the hedge is effective until such time as the hedged future cash flows occur
c. the change in fair value of the hedging instrument is recognized in net assets/equity to the extent that
the hedge is ineffective until such time as the hedged future cash flows occur
d. the change in fair value of the hedging instrument is recognized in surplus or deficit to the extent that
the hedge is ineffective until such time as the hedged future cash flows occur
a. Hedge of a net investment in a foreign entity is treated like a cash flow hedge.
b. A hedge of foreign currency risk in a firm commitment may be accounted for as a fair value hedge or
as a cash flow hedge.
c. Both A&B
26. The foreign currency risk of a highly probable forecast intragroup transaction is permitted to qualify as
the hedged item in a cash flow hedge in the consolidated financial statements, provided that
a. the transaction is denominated in a functional currency of the entity entering into that transaction
and the foreign currency risk will not affect the consolidated surplus or deficit.
b. the transaction is denominated in a currency other than the functional currency of the entity entering
into that transaction and the foreign currency risk will affect the consolidated surplus or deficit.
c. a. the transaction is denominated in a currency other than the functional currency of the entity
entering into that transaction and the foreign currency risk will not affect the consolidated surplus or
deficit.
d. a. the transaction is denominated in any currency whether functional currency of the entity or other
currency entering into that transaction and the foreign currency risk will affect the consolidated surplus
or deficit.
a. the foreign currency risk of a highly probable intragroup monetary item may qualify as a hedged item
in the consolidated financial statements if it results in an exposure to foreign exchange rate gains or
losses that are not fully eliminated on consolidation.
b. If the hedge of a forecast intragroup transaction qualifies for hedge accounting, any gain or loss that
is recognized in net assets/equity in accordance with the hedging rules in IPSAS 29 is reclassified from
equity to surplus or deficit in the same period or periods in which the foreign currency risk of the hedged
transaction affects surplus or deficit.
c. A portfolio hedge of interest rate risk (hedging an amount rather than a specific asset or liability) can
qualify as a fair value hedge if specified conditions are met.
d. All of the above
IPSAS-29
1 2 3 4 5 6 7 8 9 10 11 12 13 14
C D A C B B A B D C B A D C
15 16 17 18 19 20 21 22 23 24 25 26 27 XX
D D D A B C D A B A C B D XX
11. are measured at their fair values WITHOUT ANY DEDUCTION for transaction costs they may incur on
sale.
64
Financial Instruments: Disclosures (IPSAS-30)
1. The risk that one party to a financial instrument will cause a financial loss for the other party by failing
to discharge an obligation is known as
a. Credit Risk b. Financial Risk
c. Market Risk d. Trade Risk
2. The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates is known as
a. Financial Risk b. Currency Risk
c. Market Risk d. Trade Risk
in market interest rates is known as
a. Financial Risk b. Currency Risk
c. Market Risk d. Interest Rate Risk
4. The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities
that are settled by delivering cash or another financial asset is known as
a. Financial Risk b. Market Risk
c. Liquidity Risk d. Trade Risk
in market prices is called
a. Financial Risk b. Market Risk
c. Liquidity Risk d. Trade Risk
6. IPSAS 30 applies to
a. recognised financial instruments
b. unrecognised financial instruments
c. both recognised and unrecognised financial instruments
d. Neither recognised financial instruments nor recognised financial instrument.
7. Recognized financial instruments include financial assets and financial liabilities that are within the
scope of
8. Unrecognized financial instruments include some financial instruments that, although outside the scope
of IPSAS 29, are within the scope of
9. The disclosure requirements of IPSAS 30 could be
a. divided into financial statement disclosures resulting from financial instruments and risk disclosures
resulting from financial instruments.
b. divided into General disclosures and Special disclosures resulting from financial instruments.
c. Both A&B
10. Financial Statement disclosures resulting from financial Instruments include except
a. General Disclosures b. Specific Disclosures
c. Concessionary Loans d. Contingent disclosures
11. Risk disclosures resulting from financial Instruments include except
a. Disclosures on credit risks b. Disclosures on liquidity risks
c. Disclosures on market risks d. None of the given
12. Hedge accounting is applied should be disclosed in Financial Statement comes under
a. General disclosures on financial instruments
65
b. Specific disclosures on financial instruments
c. Disclosures on concessionary loan
d. Any of the given.
13. Carrying amounts of financial instruments by category and items of revenue, expense and gains or losses
resulting from financial instruments in the statement of financial performance or in the notes come under
a. General disclosures on financial instruments
b. Specific disclosures on financial instruments
c. Disclosures on concessionary loan
d. Any of the given.
14. Specific disclosures on financial instruments is required if
i. Financial assets/liabilities have been designated as ‘at fair value through surplus or deficit’
ii. Financial assets have been reclassified
iii. Financial assets have been transferred and do not qualify for derecognition
iv. Defaults of loans payable or breaches of loan agreement terms have been occurred
v. Financial assets have been pledged as collateral or are held as collateral

15. Risk disclosures resulting from financial Instruments are
a. Qualitative disclosures
b. Quantitative disclosures
c. both qualitative and quantitative disclosures
d. Qualitative, quantitative and nominal disclosure
16. For each type of risk arising from financial instruments an entity should disclosure qualitative disclosure
that include except
a. The exposure to risk and how they arise
b. Its objectives, policies and process for managing the risk and the methods used to measure the risk
c. Any changes in (a) or (b) from the previous period
17. Pick the correctly matched
a. Disclosure on Credit risk- Collateral and other credit enhancements obtained have to be named,
quantified and explained
b. Disclosures on liquidity risks- A sensitivity analysis is required to be disclosed for each type of market
risk
c. Disclosure on Market risk- A maturity analysis must be disclosed for derivative and non-derivative
financial liabilities.
d. All of the above
18. Disclosures on Concessionary Loans shall include
i. A reconciliation between the opening and closing balance of the loans
ii. The nominal value of the loans at the end of the period
iii. The purpose and terms of the various types of loans
iv. The valuation assumptions

66
IPSAS-30
1 2 3 4 5 6 7 8 9 10
A B D C B C A C A D
11 12 13 14 15 16 17 18 XX XX
D B A D C D A D XX XX
67
Intangible Assets (IPSAS-31)
1. IPSAS 31 prescribe the accounting treatment for
a. intangible assets that are dealt with specifically in another IPSAS
b. intangible assets that are not dealt with specifically in another IPSAS
c. All intangible assets whether they are dealt specially in other IPSAS or not
d. Goodwill.
2. Intangible Assets means
a. An identifiable non-monetary asset without physical substance
b. An identifiable monetary asset without physical substance
c. A non-identifiable non-monetary asset without physical substance
d. A non-identifiable monetary asset without physical substance
3. Typical examples of intangible assets in the public sector are
a. computer software
b. patents and copyrights
c. Acquired import quotas
d. All of the above
4. The systematic allocation of the depreciable amount of an intangible asset over its useful life is called
a. Depreciation b. Depletion
c. Amortisation d. Impairment
5. IPSAS 31 applies to expenditures on
i. advertising
ii. training
iii. start-up
iv. research and development activities
iv. Intangible assets or goodwill acquired in a business combination

i. Financial assets, as defined in IPSAS 28
ii. Expenditure on the development and extraction of minerals, oil, natural gas and similar non-
regenerative resources
iii. Intangible assets or goodwill acquired in a business combination
iv. Powers and rights conferred by legislation, a constitution, or by equivalent means, and others.
v. Intangible assets that are within the scope of another IPSAS

7. An intangible asset is said to be identifiable
a. if it is separable
b. if it arises from contractual or other legal rights, regardless of whether those rights are transferable
or separable from the entity or from other rights and obligation
c. Either A or B
d. Neither A nor B
Internally generated goodwill is recognized as an asset even if it is not an identifiable resource i.e., it is
not separable nor does it arise from binding arrangements − including rights from contracts or other legal rights
– controlled by the entity that can be measured reliably at cost
68
a. True b. False
9. Pick the correct regarding accounting treatment of research phase
a. No intangible asset arising from research (or from the research phase of an internal project) shall be
recognised.
b. Expenditure on research (or on the research phase of an internal project) shall be recognised as an
expense when it is incurred
c. Research or development expenditure that relates to an in-process research or development project
acquired separately or in a business combination and recognised as an intangible asset and is incurred
after the acquisition of that project shall be recognised as an expense when it is incurred.
d. All of the above
10. An intangible asset arising from development (or from the development phase of an internal project)
shall be recognised if, and only if, an entity can demonstrate
i. the technical feasibility of completing the intangible asset
ii. its intention and ability to complete the intangible asset and use or sell it.
iii. how the intangible asset will generate probable future economic benefits.
iv. the availability of adequate technical, financial and other resources to complete the development
v. its ability to measure reliably the expenditure attributable to the intangible assets during the
development

11. Pick the correct one regarding Heritage Intangible Asset
a. The Standard does not require an entity to recognize intangible heritage assets.
b. If an entity does recognize intangible heritage assets, it must apply disclosure requirements and may,
but is not required to, apply the measurement requirements of IPSAS 31.
c. Both A&B
12. In general, an intangible asset that is separately acquired through an exchange transaction is measured
initially at
a. cost b. fair value
c. higher of cost or fair value d. lower of cost or fair value
13. An intangible asset that is acquired free of charge, or for nominal consideration, through a non-exchange
transaction is measured at its
a. market value at the date of acquisition b. fair value at the date of acquisition
c. value in use at the date of acquisition d. the lowest of given above
14. For subsequent measurement of an intangible asset, an entity shall choose
a. the cost model as its accounting policy
b. the revaluation model as its accounting policy
c. either the cost model or the revaluation model as its accounting policy.
d. both the cost model or the revaluation model as its accounting policy.
a. In terms of Cost Model intangible asset shall be carried at its cost less any accumulated amortization
and any accumulated impairment losses
b. Under Revaluation Model, intangible asset shall be carried at a revalued amount, being its fair value
at the date of the revaluation less any subsequent accumulated amortization.
c. If an intangible asset in a class of revalued intangible assets cannot be revalued because there is no
active market for this asset, the asset shall be carried at its cost less any accumulated amortisation and
impairment losses.
d. All of the above
69
16. Amortisation of an intangible asset is
a. applicable to an intangible asset having a finite useful life
b. applicable to an intangible asset having an infinite useful life
c. applicable to an intangible asset whether having a finite useful life or infinite useful life.
d. not applicable in all cases.
a. Amortization begins when the asset is available for use
b. Amortisation ceases at the later of the date that the asset is classified as held for sale and the date
that the asset is derecognized.
c. Both A&B
18. To determine whether an intangible asset is impaired, an entity applies
a. IPSAS 19 or IPSAS 22 as appropriate b. IPSAS 28 or IPSAS 30 as appropriate.
c. IPSAS 21 or IPSAS 26 as appropriate d. IPSAS 9 or IPSAS 23 as appropriate.
19. Subsequent expenditure on an intangible asset after its purchase or completion is recognized as
a. an assets b. a liability
c. adjustment in carrying amount d. an expense
20. Residual Value of an intangible asset with finite useful life shall be assumed to be zero unless
a. There is a commitment by a third party to purchase the asset at the end of its useful life
b. There is an active market for the asset and Residual value can be determined by reference to that
market and it is probable that such a market will exist at the end of the asset’s useful life.
c. Both A or B
21. An intangible assets shall be derecognised when except
a. Entity wish so
b. on disposal
c. when no future economic benefits are expected from its use or disposal.
22. Disclosure requirements in terms of IPSAS 31
i. each class of intangible assets, distinguishing between internally generated intangible assets and other
intangible asset
ii. whether the useful lives are indefinite or finite and, if finite, the useful lives or the amortisation rates
used
iii. the amortisation methods used for intangible assets with finite useful lives
iv. the gross carrying amount and any accumulated amortisation (aggregated with accumulated
impairment losses) at the beginning and end of the period with reconciliation of the same
v. the line item(s) of the statement of profit and loss in which any amortisation of intangible assets is
included

In accordance with the IPSAS 31 an entity shall disclose the aggregate amount of research and
development expenditure recognised as an expense during the period.
a. True b. False
24. Useful life of PPE assets means except
a. the period over which an asset is expected to be available for use by an entity
b. the number of production or similar units expected to be obtained from the asset by an
entity.
70
c. the period to recover the cost of asset.
IPSAS-31
1 2 3 4 5 6 7 8 9 10 11 12
B A D C B D C B D D C A
13 14 15 16 17 18 19 20 21 22 23 24
B C D A B C D C A D A C
8. Internally generated goodwill is not recognized as an asset because it is not an identifiable resource i.e.,
it is not separable nor does it arise from binding arrangements − including rights from contracts or other legal
rights – controlled by the entity that can be measured reliably at cost
17. Amortization ceases at THE EARLIER OF THE DATE that the asset is classified as held for sale and the date
that the asset is derecognized.
71
Service Concession Arrangements: Grantor (IPSAS-32)
1. IPSAS 32 establishes the accounting and reporting requirements for a Public Sector Entity in a service
concession arrangement being
a. the grantor b. the grantee
c. either a grantor or grantee d. grantor, grantee or arranger.
2. The binding arrangements that involve private sector participation in the development, financing,
operation and/or maintenance of assets used to provide public services is called
a. service concession arrangement b. privatisation
c. collaboration d. All of the above
a. IPSAS 32 is a public sector specific standard nevertheless, it is intended to “mirror” IFRIC Interpretation
12, Service Concession Arrangements.
b. IFRIC 12 sets out the accounting requirements for the private sector operator in a service concession
arrangement whereas in IPSAS 32 accounting requirements are from perspective of Public Sector Entity.
c. Both A&B
a. The service concession arrangements where the operator provides public services related to the
service concession asset on behalf of the grantor.
b. The arrangements between public and private sector that do not involve the delivery of public services
c. The arrangements that contain service and management components where the asset is not
controlled by the grantor
d. All of the above
5. Recognition of a service concession asset
a. Only assets provided by the Grantor including those upgraded by the operator are recognized.
b. Existing assets of the grantor (other than upgrades thereto) used in a service concession arrangement
that meet the recognition criteria are reclassified as service concession assets – no additional asset and
related liability are recognized in such cases.
c. Both A&B
6. A grantor shall initially measure a service concession asset at its
a. cost b. fair value
c. lower of the cost or fair value d. higher of the cost or fair value
a. Only in the case of an existing asset where the grantor performs a reclassification the reclassified
service concession asset shall be accounted for in accordance with IPSAS 9 or IPSAS 23 as the case may
be.
b. After initial recognition or reclassification, service concession assets shall be accounted for as a
separate class of assets in accordance with IPSAS 32
c. Both A&B
8. Pick the correct one with regard to recognition of the liability in a service concession arrangement
a. In general, the recognition of a service concession asset implies recognition of a liability.
b. Only when an existing asset of the grantor is reclassified as a service concession asset then the grantor
shall not recognize a liability.
c. The type of liability the grantor recognizes under IPSAS 32 depends on how the grantor compensates
the operator.
d. All of the above
72
9. Pick the correct one regarding measurement of liability in a service concession arrangement
a. The liability recognized in a service concession arrangement shall initially be measured at the same
amount as the service concession asset, i.e., fair value.
b. This amount will be adjusted by the amount of any other consideration, e.g., cash, from the grantor
to the operator, or from the operator to the grantor.
c. Both A&B
10. The models by which the grantor compensates the operator
a. Financial Liability Model and grant of a right to the operator model
b. Service Concession Assets Model and Financial Liability Model
c. Cost Model and Fair Value Model
d. Compounding Model and Discounting Model
11. The model in which the grantor compensates the operator for the construction, development,
acquisition, or upgrade of a service concession asset and service provision by making a predetermined series of
payments to the operator is called
a. grant of a right to the operator model b. Financial Liability Model
c. Compounding Model d. Discounting Model
12. Financial liabilities other than those are dealt IPSAS 32 shall be accounted for in accordance with
a. For the predetermined series of payment to the operator the grantor shall allocate the payments and
account for the according to their substance as a reduction in the financial liability, a finance charge,
and charges for services provided by the operator.
b. Finance charges and charges for services provided by the operator shall be expensed.
c. Both A&B
d. None of the give
14. Pick the correct one with regard to the Grant of a Right to the Operator Model
i. The grantor compensates the operator for the construction, development, acquisition, or upgrade of
a service concession asset by granting the operator the right to earn revenue from third-party users of
the service concession asset or another revenue-generating asset.
ii. In this model the grantor receives a service concession asset whereas the operator an intangible asset
that would have given rise to revenue for the grantor.
iii. The liability in this model is recognized for any portion of the revenue that is not yet earned.
iv. The revenue is recognized according to the economic substance of the service concession
arrangement, and the liability is reduced as revenue is recognized.

15. If the grantor compensates the operator partly by making payments and partly by the grant of a right to
the operator,
a. it is necessary to account separately for each portion of the total liability either according to the
provisions of the financial liability model or to the provisions of the grant of a right to the operator
model.
b. it is not necessary to account separately for each portion of the total liability either according to the
provisions of the financial liability model or to the provisions of the grant of a right to the operator
model.
c. it is at a discretion of the entity to either account separately each portion of the total liability or
combined total liability as a whole.
73
d. it is necessary to account all the liability as a single component either using the provisions of the
financial liability model or to the provisions of the grant of a right to the operator model on the basis of
their weightage in total liability.
16. Other liabilities, commitments, contingent liabilities, and contingent assets arising from a service
concession arrangement shall be accounted for in accordance with
a. IPSAS 19 b. IPSAS 28, 29 and 30.
c. IPSAS 9 and IPSAS 23 d. IPSAS 19 as well as IPSAS 28, 29 and 30.
17. Other revenue arising from a service concession arrangement is recognized in accordance with
c. IPSAS 19 d. IPSAS 17
In the case that the service concession arrangements contains a revenue-sharing provision, the grantor
recognizes revenue as it is earned, in accordance with the substance of the service concession arrangement
a. True b. False
IPSAS-32
1 2 3 4 5 6 7 8 9 10
A A C A B B D D C A
11 12 13 14 15 16 17 18 XX XX
B D B D A D B A XX XX
4. The standard APPLIES ONLY TO SERVICE CONCESSION ARRANGEMENTS where the operator provides
public services related to the service concession asset on behalf of the grantor.
5. Only assets provided by the OPERATOR (existing asset of the operator, constructed or developed,
purchased or an upgrade to an existing asset of the grantor) are recognized.
7. (a) Only in the case of an existing asset where the grantor performs a reclassification the reclassified
service concession asset shall be accounted for in accordance with IPSAS 17 OR IPSAS 31 AS THE CASE
MAY BE.
(b) After initial recognition or reclassification, service concession assets shall be accounted for as a
separate class of assets in accordance with IPSAS 17 or IPSAS 31, as appropriate.
74
First-time Adoption of Accrual Basis IPSASs (IPSAS-33)
1. Objectives of IPSAS 33 are to

a. ensure transparent reporting about a first-time adopter’s transition to accrual basis IPSASs
b. Provide a suitable starting point for accounting in accordance with accrual basis IPSASs irrespective
of the basis of accounting the first-time adopter has used prior to the date of adoption
c. Identify the point where the benefits are expected to exceed the costs.
d. All of the above
2. IPSAS 33 applies to all public sector entities other than Government Business Enterprises when
a. it prepares and presents its annual financial statements on the adoption of accrual basis
b. it prepares and presents its annual financial statements during the transition to accrual basis
c. it prepares and presents its annual financial statements on the adoption of and also during the
transition to accrual basis
d. it prepares and presents its annual financial statements on the adoption of and also during the
transition to cash basis
a. An entity’s first IPSAS financial statements are the first annual financial statements in which the first-
time adopter can make an explicit and unreserved statement in those financial statements of
compliance with accrual basis IPSASs
b. If a first-time adopter takes advantage of the exemptions that affect the fair presentation and its
ability to assert compliance with accrual basis IPSASs, it will not be able to make an explicit and
unreserved statement of compliance with other IPSASs, during the period of transition.
c. Both A&B
4. On the date of adoption of accrual basis IPSASs, a first-time adopter shall apply the requirements of the
IPSASs
a. prospectively except if required, or otherwise permitted, in this IPSAS.
b. retrospectively except if required, or otherwise permitted, in this IPSAS.
c. both prospectively and retrospectively except if required, or otherwise permitted, in this IPSAS.
d. neither prospectively and retrospectively except if required, or otherwise permitted, in this IPSAS.
A first-time adopter’s estimates in accordance with IPSASs at the date of adoption of IPSASs, shall be
consistent with estimates made in accordance with the previous basis of accounting, unless there is objective
evidence that those estimates were inconsistent with the requirements in IPSASs.
a. True b. False
6. Pick the correct one regarding Fair Presentation and Compliance with IPSASs
i. A first-time adopter’s first IPSAS financial statements shall fairly present the financial position, financial
performance, and cash flows of the entity.
ii. A first-time adopter shall claim full compliance with IPSASs only when it has complied with all the
requirements of the applicable IPSASs effective at that date
iii. While applying exemptions that affect the fair presentation and the first-time adopter’s ability to
assert compliance with accrual basis IPSASs during the period of transition to accrual basis IPSASs, a
first-time adopter will prepare transitional IPSAS financial statements.
iv. Five Year Transitional Relief Period for the Recognition and/or Measurement of Assets and/or
Liabilities

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7. Transitional Relief Period for the Recognition and/or Measurement of Assets and/or Liabilities under
IPSAS 33 is
a. three years b. five years
c. two years d. four years
8. Where a first-time adopter has not recognized assets and/or liabilities under its previous basis of
accounting, it is not required to recognize and/or measure the following assets and/or liabilities for reporting
periods beginning on a date within three years following the date of adoption of IPSASs
i. Inventories
ii. PPE, Intangible Assets and Investment property
iii. employee benefits
iv. Biological assets
v. Financial Instruments and Service concession assets and the related liabilities

9. Exemptions that affect fair presentation of financial statement
a. Elimination of balances, transactions, revenue and expenses between entities within the economic
entity in its consolidated financial statements;
b. Disclosure of related party relationships, related party transactions and information about key
management.
c. Both A&B
10. Exemptions don’t that affect fair presentation of financial statement
a. Determining a surrogate for acquisition cost or depreciated cost when reliable cost information about
the historical cost of an asset is not available on the date of adoption of accrual basis IPSASs.
b. Not presenting comparative information in its first transitional IPSAS financial statements or its first
IPSAS financial statements
c. Not presenting segment information during a three year relief period.
d. All of the above
11. Disclosure requirements in terms of IPSAS 33 are
a. A first-time adopter shall present a reconciliation of its net assets/equity, surplus or deficit in
accordance with its previous basis of accounting to its opening balance at the date of adoption of IPSASs.
b. The reconciliation explains the adjustments to the previously reported financial statements in each
period when new items are recognized and/or measured in accordance with IPSAS 33.
c. Both A&B
IPSAS-33
1 2 3 4 5 6 7 8 9 10 11
D C C B A B A D C D C
7. Where a first-time adopter has not recognized assets and/or liabilities under its previous basis of
accounting, it is not required to recognize and/or measure the following assets and/or liabilities for reporting
periods beginning on a date within three years following the date of adoption of IPSASs
(i) Inventories (ii) Investment property (iii) PPE (iv) employee benefits (v) Biological assets (vi)
Intangible assets (vii) Service concession assets and the related liabilities (viii) Financial Instruments
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Separate Financial Statements (IPSAS-34)

a. To prescribe the accounting and disclosure requirements for investments in controlled entities, joint
ventures and associates when an entity prepares separate financial statements.
b. To prescribe the accounting and disclosure requirements for investments in controlled entities, joint
ventures and associates when an entity prepares consolidated financial statements.
c. To prescribe the accounting and disclosure requirements for investments in controlled entities, joint
ventures and associates when an entity prepares either a separate or consolidated financial
statements.
d. To prescribe the accounting and disclosure requirements for investments in controlled entities, joint
ventures and associates or other independent entities when an entity does not prepare a separate nor
consolidated financial statements.
The IPSAS 34 mandates which entities produce separate financial statement.
a. True b. False
3. Financial statements presented by a controlling entity, an investor in an associate or a venturer in
a jointly controlled entity, in which the investments are accounted for on the basis of the
a. net assets of the investee b. reported results of the investee
c. direct net assets/equity interest d. Any of the above
a. The financial statements of an entity that does not have a controlled entity, associate or joint
venturer’s interest in a joint venture are not separate financial statements.
b. An investment entity that is required, throughout the current period and all comparative periods
presented, to apply the exception to consolidation for all of its subsidiaries in accordance IPSAS 35
(Consolidated Financial Statements) presents separate financial statements as its only financial
statements.
c. An entity that is exempted from applying equity method may present separate financial statement as
its only financial statement.
5. When an entity prepares separate financial statements, it shall account for similar investments in
controlled entities, joint ventures and associates
a. at cost b. in accordance with IPSAS 29
c. the equity method as described in IPSAS 36 d. any of the given
6. If a controlling entity that is not itself an investment entity is required to measure the investments of a
controlled investment entity
a. at fair value through surplus or deficit in accordance with IPSAS 29
b. consolidate the other assets and liabilities and revenue and expenses of the controlled investment
entity
c. It shall account for that investment in the controlled investment entity in the same way in its separate
financial statements.
d. All of the above
7. Incorrect statement When an entity ceases to be an investment entity
a. The entity shall account for an investment in a controlled entity in either (a) At cost (b) In accordance
with IPSAS 29 or (c) Using the equity method as described in IPSAS 36.
b. The date of the change of status shall be the deemed acquisition date.
c. The book value of the controlled entity at the deemed acquisition date shall represent the transferred
deemed consideration.
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8. When an entity becomes an investment entity, it shall account for an investment in a controlled entity
a. at cost through net assets/equity in accordance with IPSAS 36
b. at fair value through surplus or deficit in accordance with IPSAS 29
c. Lower of the above
d. Higher of the above
9. When an entity becomes an investment entity the difference between the previous carrying amount of
the controlled entity and its fair value at the date of the change of status of the investor shall be recognized as
a. gain or loss in surplus or deficit
b. increase or decrease in the net asset/equity
c. contingent asset or contingent liability in surplus or deficit
d. Reserve or provision in surplus or deficit
When an entity becomes an investment entity the cumulative amount of any gain or loss previously
recognized directly in net assets/equity in respect of those controlled entities shall be treated as if the
investment entity had disposed of those controlled entities at the date of change in status
a. True b. False
a. Dividends/similar distributions from a controlled entity, a joint venture or an associate are recognized
in the separate financial statements of an entity when the entity’s right to receive the dividend or similar
distribution is established
b. The dividend or similar distribution is recognized in surplus or deficit unless the entity elects to use
the equity method
c. the dividend or similar distribution is recognized as an addition to the carrying amount of the
investment
12. By establishing a new entity as its controlling entity in a manner that satisfies the criteria except
a. The new controlling entity obtains control of the original controlling entity
b. The assets and liabilities of the new economic entity and the original economic entity are the same
immediately before and after the reorganization
c. The owners of the original controlling entity before the reorganization have the same absolute and
relative interests in the net assets of the original economic entity and the new economic entity
immediately before and after the reorganization
d. the new controlling entity accounts for its investment in the original controlling entity at fair value in
its separate financial statement
13. State whether true of false
The new controlling entity shall measure cost at the carrying amount of its share of the net assets/equity
items shown in the separate financial statements of the original controlling entity at the date of the
reorganization.
a. True b. False
14. In terms of IPSAS 34 when a parent entity elects not to prepare consolidated financial statements and
instead prepares separate financial statements, it shall disclose in those separate financial statements
i. the fact that the financial statements are separate financial statements
ii. that the exemption from consolidation has been used
iii. the name and principal place of business (and country of incorporation, if different) of the entity
whose consolidated financial statements that comply with IPSAS have been produced for public use
iv. the address where those consolidated financial statements are obtainable.

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15. Pick the correct one regarding disclosure requirement in terms of IPSAS 34
a. A description of the method used to account for the investments in subsidiaries, joint ventures and
associates
b. When an investment entity that is a parent prepares separate financial statements as its only financial
statements, it shall disclose that fact and also present the disclosures relating to investment entities
required by IPSAS 38, Disclosure of Interests in Other Entities
c. Both A&B
IPSAS-34
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
A B C D D D C B A A C D A D C
2. The IPSAS 34 DOES NOT MANDATE which entities produce separate financial statement.
7. The fair value of the controlled entity at the deemed acquisition date shall represent the transferred
deemed consideration.
12. The new controlling entity accounts for its investment in the original controlling entity at COST in its
separate financial statement
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Consolidated Financial Statements (IPSAS-35)
1. The IPSAS 35 sets out
i. principle of control, and establishes control as the basis for consolidation
ii. how to apply the principle of control to identify whether an entity controls another entity and
therefore must consolidate that entity
iii. the accounting requirements for the preparation of consolidated financial statements
iv. defining an investment entity and sets out an exception to consolidating particular controlled entities
of an investment entity.
a. ii, iii and iv b. i, iii and iv

2. IPSAS 35
a. applies to public sector combinations and their effect on consolidation including goodwill arising on a
public sector combination
b. applies to public sector combinations and their effect on consolidation but does apply to goodwill
arising on a public sector combination
b. does not apply to public sector combinations and their effect on consolidation including goodwill
arising on a public sector combination does not apply to
c. does not apply to public sector combinations and their effect on consolidation but applies to goodwill
arising on a public sector combination does not apply to
3. Exemption from presenting consolidated statement by controlling unit
i. The controlling entity is itself a wholly-owned controlled entity or a partially-owned controlled entity
of another entity and its other owners
ii. The controlling entity’s debt or equity instruments are traded in a public market.
iii. The controlling entity did not file, nor is it in the process of filing, its financial statements with a
securities commission or other regulatory organization for the purpose of issuing any class of
instruments in a public market.
iv. This controlling entity’s ultimate or any intermediate controlling entity produces consolidated
financial statements available for public use that comply with IPSASs.
a. i, iii and iv b. ii, iii and iv

A controlling entity that is an investment entity SHALL present consolidated financial statements if it is
required under this Standard, to measure all of its controlled entities at fair value through surplus or deficit.
a. True b. False
5. The financial statements of an economic entity in which the assets, liabilities, net assets/equity, revenue,
expenses and cash flows of the controlling entity and its controlled entities are presented as those of a single
economic entity is called
a. Separate Financial Statement b. Comprehensive Financial Statement
c. Consolidated Financial Statement d. Inclusive Financial Statement
6. An economic entity means
a. a controlling entity
b. controlled entities
c. a controlling entity and its controlled entities
d. a controlling entity, its controlled entities and legal entities to which it reports
7. An investment entity is an entity that except
80
a. Obtains funds from one or more investors for the purpose of providing those investor(s) with
investment management services
b. Has the purpose of investing funds solely for returns from capital appreciation, investment revenue,
or both
c. Measures and evaluates the performance of substantially all of its investments on a fair value basis.
8. The net assets/equity in a controlled entity not attributable, directly or indirectly, to a controlling entity
is called
a. Residual interest b. non-controlling interest
c. Lingering interest d. Indirect interest
9. Protective rights means
a. Rights designed to protect the interest of the party holding those rights without giving that party
power over the entity to which those rights relate.
b. Rights designed to protect the interest of the party holding those rights with giving that party power
over the entity to which those rights relate.
c. Rights designed to protect the interest of the party holding those rights with or without giving that
party power over the entity to which those rights relate.
d. Giving the party power over the entity to which those rights relate without designing any right to
protect the interest of the party holding those right.
10. An entity controls another entity if and only if except
a. Power over the other entity
b. Exposure, or rights, to variable benefits from its involvement with the other entity and
c. The ability to use its power over the other entity to affect the nature or amount of the benefits from
its involvement with the other entity
Two or more entities collectively control another entity when they must act together to direct the
relevant activities. In such cases, because no single entity can direct the activities without the co-operation of
the others, no single entity controls the other entity
a. True b. False
12. Pick the in correct regarding Consolidation Procedures
a. Combine like items of assets, liabilities, net assets/equity, revenue, expenses and cash flows of the
controlling entity with those of its controlled entities.
b. Offset (eliminate) the carrying amount of the controlling entity’s investment in each controlled entity
and the controlling entity’s portion of net assets/equity of each controlled entity
c. combine in full intra-economic entity assets, liabilities, net assets/ equity, revenue, expenses and cash
flows relating to transactions between entities of the economic entity.
d. Nine of the given
13. In terms of IPSAS 35 intra- economic entity losses indicating an impairment that
a. requires recognition in the separate financial statements
b. requires recognition in the consolidated financial statements
c. requires recognition in both the separate and consolidated financial statements
d. does not requires recognition either in the separate and consolidated financial statements
14. In terms of IPSAS 35 the financial statements of the controlling entity and its controlled entities used in
the preparation of the consolidated financial statements
a. shall be prepared as at the same reporting date
b. shall not be prepared at the same reporting date
c. shall be prepared as at the different reporting dates but the gap between these dates shall not be
more than six months
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d. shall be prepared as at the different reporting dates but the gap between these dates shall not be
more than one account year.
15. Where reporting date of the controlling unit and controlled units differs
a. Obtains, for consolidation purposes, additional financial information as of the same date as the
financial statements of the controlling entity
b. Uses the most recent financial statements of the controlled entity adjusted for the effects of
significant transactions or events that occur between the date of those financial statements and the
date of the consolidated financial statements.
c. Both A&B
16. International Financial Reporting Standard (IFRS) 10 limits the difference in reporting dates of the
controlling and controlled units to three months, IPSAS 35 in this regards
a. limits the difference in dates to three months
b. limits the difference in dates to six months
c. limits the difference in dates to one account year
d. does not prescribe any limit.
17. A controlling entity
a. shall not present non-controlling interests in the consolidated statement of financial position
b. shall present non-controlling interests in the consolidated statement of financial position within net
assets/equity, separately from the net assets/equity of the owners of the controlling entity.
c. shall present non-controlling interests in the consolidated statement of financial performance through
surplus or deficit.
d. shall present non-controlling interests in the consolidated statement of financial performance and
statement of financial position
18. Pick the correct one regarding non-controlling interest’s accounting treatment
a. The entity shall also attribute the total amount recognized in the statement of changes in net assets/
equity to the owners of the controlling entity and to the non-controlling interests even if this results in
the non-controlling interests having a deficit balance.
b. If a controlled entity has outstanding cumulative preference shares that are classified as equity
instruments and are held by non-controlling interests, the entity shall compute its share of surplus or
deficit after adjusting for the dividends on such shares, whether or not such dividends have been
declared.
c. When the proportion of the net assets/equity held by non-controlling interests changes, an entity
shall adjust the carrying amounts of the controlling and non-controlling interests to reflect the changes
in their relative interests in the controlled entity by recognizing the difference directly in net
assets/equity
d. All of the above
19. In the event of loss of control except, the controlling unit that lost the control shall EXCEPT
a. Derecognize the assets and liabilities of the former controlled entity from the consolidated statement
of financial position
b. Recognize any investment retained in the former controlled entity duly re-measured and
subsequently accounts for it and for any amounts owed by or to the former controlled entity in
accordance with relevant IPSASs.
c. Recognize the gain or loss associated with the loss of control attributable to the former controlling
interest directly in net assets/equity
20. The controlling entity should account for the multiple arrangements as a single transaction when
i. They are entered into at the same time or in contemplation of each other.
ii. They form a single transaction designed to achieve an overall commercial effect.
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iii. The occurrence of one arrangement is dependent on the occurrence of at least one other
arrangement.
iv. One arrangement considered on its own is not economically justified, but it is economically justified
when considered together with other arrangements.

21. Partial disposal of an investment in a controlled entity while control is retained is accounted for as
a. a net assets/equity transaction with owners
b. gain or loss is recognized in surplus or deficit
c. Both A&B
22. Acquisition of a further ownership interest in a controlled entity after obtaining control is accounted for
a. as a net assets/equity transaction
b. no gain or loss is recognized.
c. Both A&B
23. Partial disposal of an investment in a controlled entity that results in loss of control
a. residual holdings to be re-measurement to fair value.
b. Any difference between fair value and carrying amount is a gain or loss on the disposal, recognized in
surplus or deficit.
c. Thereafter, IPSAS 36 or IPSAS 41 is applied, as appropriate, to the residual holding.
d. All of the above
24. A controlling entity, that is not itself an investment entity,
a. IPSAS 35 requires that such entity shall consolidate all controlled entities held by a controlled
investment entity.
b. Such a controlling entity shall present consolidated financial statements in which it measures the
investments of the controlled investment entity at fair value through surplus or deficit in accordance
with IPSAS 41
c. Such a controlling entity shall consolidates the other assets and liabilities and revenue and expenses
of the controlled investment entity in accordance with IPSAS 35.
d. All of the above
IPSAS-35
1 2 3 4 5 6 7 8 9 10 11 12
D B A B C C D B A D A C
13 14 15 16 17 18 19 20 21 22 23 24
B A C D B D C D A C D A
3. The controlling entity’s debt or equity instruments ARE NOT TRADED IN A PUBLIC MARKET
4. A controlling entity that is an investment entity SHALL NOT present consolidated financial statements if
it is required under this Standard, to measure all of its controlled entities at fair value through surplus or deficit.
12. ELIMINATE IN FULL intra-economic entity assets, liabilities, net assets/ equity, revenue, expenses and
cash flows relating to transactions between entities of the economic entity.
19. Recognizes the gain or loss associated with the loss of control attributable to the former controlling
interest in SURPLUS OR DEFICIT
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Investments in Associates and Joint Ventures (IPSAS-36)
1. The objective of the IPSAS 36 is
a. to prescribe the accounting for investments in associates and joint ventures and to set out the
requirements for the application of the equity method when accounting for investments in associates
and joint ventures.
b. to prescribe the accounting for investments in associates and joint ventures and to set out the
requirements for the application of the fair value method when accounting for investments in associates
and joint ventures.
c. to prescribe the accounting for investments in associates and joint ventures and to set out the
requirements for the application of the cost method when accounting for investments in associates and
joint ventures.
d. All of the above
2. IPSAS 36 applies to all entities that are investors with significant influence over, or joint control of, an
investee where
a. the investment leads to the holding of a non-quantifiable ownership interest.
b. the investment leads to the holding of a quantifiable ownership interest.
c. the investment leads to the holding of either a quantifiable or non-quantifiable ownership interest.
d. the investment leads to the holding of a neither a quantifiable nor non-quantifiable ownership
interest
a. venture capital organization, mutual fund, unit trust or a similar entity that elects to measure such
investments in accordance with equity method in accordance with IPSAS 35.
b. venture capital organization, mutual fund, unit trust or a similar entity that elects to measure such
investments at fair value through surplus or deficit in accordance with IPSAS 37.
c. venture capital organization, mutual fund, unit trust or a similar entity that elects to measure such
investments at fair value through surplus or deficit in accordance with IPSAS 41.
d. venture capital organization, mutual fund, unit trust or a similar entity whether that elects to measure
such investments at fair value through surplus or deficit or in accordance with equity method.
a. A substantial or majority ownership by another investor does not necessarily preclude an investor
from having significant influence.
b. If a public-sector investor holds, directly or indirectly 20% or more of the voting power of the investee
does have significant influence, unless it can be clearly demonstrated that this is not the case.
c. If the investor holds less than 20% of the voting rights, directly or indirectly (e.g., through a subsidiary),
it is presumed that the investor does not have significant influence unless such influence can be clearly
demonstrated.
d. All of the above
5. Investments in associates are generally accounted for in the consolidated financial statements using the
a. fair value method b. equity method.
c. either fair value or equity method d. both fair value and equity method
6. An investment in an associate or a joint venture accounted for using the equity method shall be classified
as a
a. Non-current asset b. current asset
c. contingent asset d. intangible asset
7. A method of accounting whereby the investment is initially recognised at cost and adjusted thereafter
for the post-acquisition change in the investor’s share of the investee’s net assets is known as
a. Fair value method b. revaluation method
c. equity method d. cost plus method
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8. Pick the correct one with regard to accounting under equity method
a. The investor’s surplus or deficit includes its share of the investee’s surplus or deficit
b. Distributions received from an investee reduce the carrying amount of the investment.
c. Adjustments to the carrying amount may also be necessary for changes in the investor’s proportionate
interest in the investee arising from changes in the investee’s equity that have not been recognized in
the investee’s surplus or deficit.
In contrast to the adjustments to the carrying amount for changes in the investor’s proportionate
interest, the investor’s share of those changes is recognized directly in the investor’s surplus or deficit.
a. True b. False
10. Exemption from applying equity method is permissible
i. The entity itself is a controlled entity and the information needs of users are met by its controlling
entity’s consolidated financial statements
ii. The entity itself is a partially owned entity, all its other owners, including those not otherwise entitled
to vote, have been informed about, and do not object to, the entity not applying the equity method.
iii. The entity’s debt or equity instruments are not traded in a public market
iv. The entity did not file, nor is it in the process of filing, its financial statements with a securities
commission or other regulatory organization, for the purpose of issuing any class of instruments in a
public market.
v. The ultimate or any intermediate controlling entity of the entity produces financial statements
available for public use that comply with IPSASs, in which controlled entities are consolidated or are
measured at fair value in accordance with IPSAS 35.

11. If the investment becomes a controlled entity, the entity shall account for its investment in accordance
with the
a. IPSAS 40 and IPSAS 35 b. IPSAS 29 and IPSAS 30
c. IPSAS 9 and IPSAS 23 d. IPSAS 19 and IPSAS 41
a. If the retained interest in the former associate or joint venture is a financial asset, the entity shall
measure the retained interest at fair value and shall recognize in surplus or deficit any difference arising
out
b. When an entity discontinues the use of the equity method, the entity shall account for all amounts
previously recognized directly in the entity’s net assets/equity in relation to that investment on the same
basis as would have been required if the investee had directly disposed of the related assets or liabilities.
c. If an investment in an associate becomes an investment in a joint venture or an investment in a joint
venture becomes an investment in an associate, the entity shall not continue to apply the equity method
and require to re-measure the retained interest.
13. Whenever application of IPSAS 29/41 (Financial Instruments) indicates that the investment in an
associate or a joint venture may be impaired, an entity applies
a. IPSAS 9 or IPSAS 23 as the case may be b. IPSAS 26 or IPSAS 21 as the case may be
c. IPSAS 29/41 d. IPSAS 35 or IPSAS 36 as the case may be
a. Where an entity is precluded by IPSAS 29 from measuring the retained interest in a former associate
or joint venture at fair value, IPSAS 36 permits an entity to use carrying amount as the cost on initial
recognition of the financial asset.
85
b. International Accounting Standard (IAS) 28 requires that the retained interest be measured at fair
value.
c. Both A&B
An entity with an interest in an associate or a joint venture that is an investment entity, shall, when
applying the equity method, retain the fair value measurement applied by that investment entity associate or
joint venture to its interest in controlled entities.
a. True b. False
IPSAS-36
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
A B C D B A C D B D A C B C A
9. In contrast to the adjustments to the carrying amount for changes in the investor’s proportionate
interest, the investor’s share of those changes is recognized directly in THE INVESTOR’S EQUITY/NET ASSETS.
12. If an investment in an associate becomes an investment in a joint venture or an investment in a joint
venture becomes an investment in an associate, the entity CONTINUES TO APPLY THE EQUITY METHOD AND
DOES NOT RE-MEASURE THE RETAINED INTEREST.
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Joint Arrangement (IPSAS-37)
1. Pick the incorrect one in terms of IPSAS 37
a. Joint Arrangement is an arrangement of which two or more parties have joint control.
b. Joint control is the agreed sharing of control of an arrangement by way of a binding arrangement,
which exists only when decisions about the relevant activities require the unanimous consent of the
parties sharing control.
c. A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.
An entity will need to apply judgment when assessing whether all the parties, or a group of the parties,
have joint control of an arrangement. An entity shall make this assessment by considering all facts and
circumstances
a. True b. False
3. A joint operator shall account for the assets, liabilities, revenues and expenses relating to its interest in
a joint operation in accordance with the
a. IPSAS 37
b. IPSAS 19
c. IPSAS 36
d. IPSASs applicable to the particular assets, liabilities, revenues and expenses.
a. A party that participates in, but does not have joint control of, a joint operation shall also account for
its interest in the arrangement in similar way if that party has rights to the assets, and obligations for
the liabilities, relating to the joint operation.
b. If a party that participates in, but does not have joint control of, a joint operation does not have rights
to the assets, and obligations for the liabilities, relating to that joint operation, it shall account for its
interest in the joint operation in accordance with the IPSASs applicable to that interest.
c. Both A&B
5. A joint Venturer shall recognize its interest in a joint venture as an investment and shall account for that
investment using the
a. Equity method in accordance with IPSAS 36 unless the entity is exempted from applying the equity
method as specified in that Standard.
b. Fair value method in accordance with IPSAS 36, Investments in Associates and Joint Ventures, unless
the entity is exempted from applying the fair value method as specified in that Standard.
c. Cost method value method in accordance with IPSAS 16, Investments Property unless the entity is
exempted from applying the cost method as specified in that Standard.
d. Revaluation method value method in accordance with IPSAS 16, Investments Property unless the
entity is exempted from applying the revaluation method as specified in that Standard.
6. A joint arrangement has the characteristic
a. The parties are bound by either a contractual arrangement or mutual arrangement
b. Such arrangement gives two or more of those parties joint control of the arrangement
c. Both A&B
7. A joint control is
a. a joint operation b. a joint venture
c. both a joint control and a joint venture d. either a joint control or a joint venture
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Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control.
a. True b. False
9. The classification of a joint arrangement as a joint operation or a joint venture depends upon the
a. number of parties involved in the joint arrangement
b. rights and obligations of the parties to the arrangement.
c. nature and activities of the joint arrangement
d. All of the above
10. The type of joint arrangement in which the parties to the arrangement have rights to the assets
and obligations for the liabilities related to the arrangement is called
a. Joint venture b. Joint Operation
c. Association d. Body
11. The parties of a joint operation are called
a. joint operators b. promoter
c. investor d. Representative
12. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have
a. Both right to the net assets and obligations for the net liabilities of the arrangement
b. neither rights to the net assets nor obligation for the net liabilities of the arrangement
c. obligations for the liabilities of the arrangement
d. rights to the net assets of the arrangement
13. Whether a joint arrangement is a joint operation or a joint venture is assessed
a. in the light of instructions given in the IPSAS 37
b. in the light of instructions given in the other Ind Ass
c. by applying judgement by the entity
d. All of the above
a. joint operations and joint ventures can never coexist.
b. joint operations and joint ventures can coexist when the parties undertake different activities that
form part of the same framework agreement.
c. joint operations and joint ventures can coexist when the law and regulation provides so.
d. Both B&C
15. Joint operator shall recognise in relation to its interest in a joint operation i.
i. its assets, including its share of any assets held jointly
ii. its liabilities, including its share of any liabilities incurred jointly
iii. its revenue from the sale of its share of the output arising from the joint operation
iv. its share of the revenue from the sale of the output by the joint operation
v. its expenses, including its share of any expenses incurred jointly.
a. i and ii b. iii, iv and v

a. A joint arrangement not structured through a separate vehicle is a JOINT VENTURE.
b. A joint arrangement structured through a separate vehicle may be either a JOINT OPERATION
OR A JOINT VENTURE
c. Classification depends on the legal form of the vehicle, contractual arrangement and an
assessment of ‘other facts and circumstances
17. A joint operator recognises its assets, liabilities and transactions - including its share in those arising
jointly
a. in its separate financial statements
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b. in its separate financial statements
c. in both its consolidated and separate financial statements.
d. either in its consolidated and separate financial statements at the discretion of the entity
18. A joint operator accounts for the assets, liabilities and transactions related to a joint operation in
accordance with the
a. IPSAS 37 b. Relevant IPSASs
19. A Joint Venturer accounts for its interest in a joint venture in the same way as an investment in an
associate i.e.
a. fair value method b. equity method.
c. either fair value or equity method d. both fair value and equity method
a. A party to a joint venture that does not have joint control accounts for its interest as a financial
instrument, or under the equity method if significant influence exists.
b. A party to a joint operation that does not have joint control recognises its assets, liabilities and
transactions - including its share in those arising jointly - if it has rights to the assets and obligations
for the liabilities of the joint operation.
c. A party that participates in a joint operation, but does not have joint control, and subsequently
obtains joint control over the joint operation would be required to re-measure its previously held
interests in the joint operation
21. A separate vehicle is
a. a separately identifiable financial structure, including separate legal entities or entities recognized
by statute, regardless of whether those entities have a legal personality
b. a separately identifiable financial structure, excluding separate legal entities or entities recognized
by statute, regardless of whether those entities have a legal personality
c. a separately identifiable financial structure, including separate legal entities or entities recognized
by statute, provided those entities does not have a legal personality
b. a separately identifiable financial structure, excluding separate legal entities or entities recognized
by statute, provided those entities have a legal personality
IPSAS-37
1 2 3 4 5 6 7 8 9 10 11
D A D C A B D A B B A
12 13 14 15 16 17 18 19 20 21 XX
D C B D A C B B C A XX
16. A joint arrangement not structured through a separate vehicle is a JOINT OPERATION
A joint arrangement structured through a separate vehicle may be either a JOINT OPERATION OR
A JOINT VENTURE. Classification depends on the legal form of the vehicle, contractual
arrangement and an assessment of ‘other facts and circumstances’
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Disclosure of Interests in Other Entities (IPSAS-38)
i. Controlled entities;
ii. Joint arrangements (i.e., joint operations or joint ventures);
iii. Associates
iv. Structured entities that are not consolidated.

i. Post-employment benefit plans or other long-term employee benefit plans to which IPSAS 25,
Employee Benefits applies.
ii. An entity’s separate financial statements to which IPSAS 34, Separate Financial Statements, applies.
iii. An interest held by an entity that participates in, but does not have joint control of, a joint
arrangement unless that interest results in significant influence over the arrangement or is an interest
in a structured entity.
iv. An interest in another entity that is accounted for in accordance with IPSAS 29, Financial Instruments:
Recognition and Measurement.

3. IPSAS 38 applies even when accounted for under IPSAS 29/41
a. When that interest is an interest in an associate or a joint venture that, in accordance with IPSAS 36,
Investments in Associates and Joint Ventures, is measured at fair value through surplus or deficit
b. When that interest is an interest in a structured entity that is consolidated.
c. Both A&B
4. Structured entity means
a. In the case of entities where administrative arrangements or legislation are normally the dominant
factors in deciding who has control of an entity, an entity that has been designed so that administrative
arrangements or legislation are not the dominant factors in deciding who controls the entity, such as
when binding arrangements are significant to determining control of the entity and relevant activities
are directed by means of binding arrangements
b. In the case of entities where voting or similar rights are normally the dominant factor in deciding who
has control of an entity, an entity that has been designed so that voting or similar rights are not the
dominant factor in deciding who controls the entity, such as when any voting rights relate to
administrative tasks only and the relevant activities are directed by means of binding arrangements.
c. Both A&B
5. Disclosure requirement in terms of IPSAS 37 are
a. The significant judgments and assumptions it has made in determining nature and types of interest
b. Information about its interests such as controlling and non-controlling interest in controlled
entities/joint arrangement/associates/ Structured entities that are not consolidated
c. Both A&B
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An investment entity shall disclose information regarding its interest in a controlled entity when, at the
point at which control arose, the entity had the intention of disposing of that interest and, at the reporting date,
it has an active intention to dispose of that interest.
a. True b. False
7. The disclosures required from an entity, OTHER THAN AN INVESTMENT ENTITY, shall be provided at each
reporting date until
a. the entity disposes of the controlling interest
b. ceases to have the intention to dispose of that interest.
c. Both A&B
IPSAS-38
1 2 3 4 5 6 7
D D A C C B C
3. Structured entities that are NOT CONSOLIDATED.

6. An entity, OTHER THAN AN INVESTMENT ENTITY, shall disclose information regarding its interest in a
controlled entity when, at the point at which control arose, the entity had the intention of disposing of that
interest and, at the reporting date, it has an active intention to dispose of that interest.
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Employees Benefits (IPSAS-39)
1. IPSAS 39 requires an entity to recognise
a. an expense when an employee has provided service in exchange for employee benefits to be paid in
the future
b. a liability when the entity consumes the economic benefit arising from service provided by an
employee in exchange for employee benefits.
c. Both A&B
2. The cost of providing employee benefits is recognized in the period
a. in which the entity receives services from the employee
b. when the benefits are paid or payable.
c. Earlier of A and B
d. Later of A and B
3. The IPSAS 39 shall be applied by an employer in accounting for all employee benefits, except
a. those to which Share-based Payment applies
b. Composite Social Security programme
c. Both A&B
4. Employee benefits include
i. Short term benefit ii. Post-employment benefits
iii. Composite Social Security Scheme iv. Other long-term benefits
iv. Termination benefit
a. i, ii, iii and iv b. i, ii, iv and v

c. ii, iii, iv and v d. All of the above
5. Employee benefits are said to be Short term employee benefits if expected to be settled
a. wholly before twelve (12) months after the end of the annual reporting period in which the employees
render the related services
b. wholly or partially before twelve (12) months after the end of the annual reporting period in which
the employees render the related services
c. wholly before three (03) months after the end of the annual reporting period in which the employees
render the related services
b. wholly or partially before three (03) months after the end of the annual reporting period in which the
employees render the related services
6. Post-employment benefits include
i. retirement benefits (pensions and lump sum payments on retirement)
ii. Post-employment life insurance and post-employment medical care
iii. Defined contribution/Benefit plans
iv. Long-term disability benefits

7. Terminal Benefits are employee benefits provided in exchange for the termination of an employee’s
employment as a result of
a. an entity’s decision to terminate an employee’s employment before the normal retirement date
b. an employee’s decision to accept an offer of benefits in exchange for the termination of employment.
c. either A or B
d. neither A nor B
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8. Post-employment benefit plans under which an entity pays fixed contributions into a separate entity/
fund and will have no legal or constructive obligation to pay further contributions if the fund does not hold
sufficient assets to pay all employee benefits relating to employee service in the current and prior periods is
known as
a. Defined Benefits Plans b. Defined Contribution Plans
c. Multi-employer Plans d. Constructive Obligation Plans
9. Multi-employer Plans are Defined contribution plans (other than state plans) or defined benefit plans
(other than state plans) that
a. pool the assets contributed by various entities that are under common control
b. use those assets to provide benefits to employees of more than one entity, on the basis that
contribution and benefit levels are determined without regard to the identity of the entity that employs
the employees.
c. Both A&B
10. The present value of any economic benefits available in the form of refunds from the plan or reductions
in future contributions to the plan is called
a. Asset Ceiling b. Asset Block
c. Asset Impairment d. Asset Monetization
11. Present value of defined contribution means
a. The present value, with deduction any plan assets, of expected future payments required to settle
the obligation resulting from employee service in the current and prior periods.
b. The present value, without deducting any plan assets, of expected future payments required to settle
the obligation resulting from employee service in the current and prior periods.
c. The present value, with or without deducting any plan assets, of expected future payments required
to settle the obligation resulting from employee service in the current and prior periods.
12. Plan assets comprise
a. assets held by a long-term employee benefit fund
b. qualifying insurance policies.
c. Both A&B
13. Assets held by a long-term employee benefit fund are assets (other than non-transferable financial
instruments issued by the reporting entity) that:
a. are held by an entity/a fund that is legally separate from the reporting entity and exists solely to pay
or fund employee benefits
b. are not available to the reporting entity’s own creditors (even in bankruptcy) except in certain cases
c. Both A&B
14. Assets held by a long-term employee benefit fund can be returned to the reporting entity except
a. The reporting entity withdraws its membership to that fund
b. The remaining assets of the fund are sufficient to meet all the related employee benefit obligations
of the plan or the reporting entity
c. The assets are returned to the reporting entity to reimburse it for employee benefits already paid.
15. Qualifying Insurance Policy is an insurance policy issued by an insurer that is not a related party of the
reporting entity, if the proceeds of the policy
a. can be used only to pay or fund employee benefits under a defined benefit plan
b. are not available to the reporting entity’s own creditors (even in bankruptcy), and cannot be returned
to the reporting entity in exceptional cases.
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c. can be returned to reporting entity when the remaining assets of the fund are sufficient to meet all
the related employee benefit obligations of the plan or the reporting entity or the assets are returned
to the reporting entity to reimburse it for employee benefits already paid.
d. All of the above
16. An entity shall recognise the expected cost of short-term employee benefits in the form of paid absences
a. in the case of accumulating paid absences, when the employees render service that increases their
entitlement to future paid absences.
b. in the case of non-accumulating paid absences, when the absences occur.
c. An entity shall measure the expected cost of accumulating paid absences as the additional amount
that the entity expects to pay as a result of the unused entitlement that has accumulated at the end of
the reporting period.
d. All of the above
17. An entity shall recognise the expected cost of profit-sharing and bonus payments when, and only when
a. the entity has a present legal or constructive obligation to make such payments as a result of future
event
b. a reliable estimate of the obligation can be made.
c. Both A&B
18. When an entity has no realistic alternative but to make the payments, the entity is said to have
a. Present obligations b. Past Obligations
c. Future Obligations d. Contingent Obligations
a. An entity shall classify a multi-employer plan as a defined contribution plan or a defined benefit plan
under the terms of the plan including any constructive obligation that goes beyond the formal terms
b. When sufficient information is not available to use defined benefit accounting for a multi-employer
defined benefit plan, an entity shall account for the plan if it were a defined contribution plan and
disclose the information
c. In determining when to recognise, and how to measure, a liability relating to the wind-up of a
multiemployer defined benefit plan, or the entity’s withdrawal from a multi-employer defined benefit
plan, an entity shall apply IPSAS 19, Provisions, Contingent Liabilities and Contingent Assets.
20. State true or false
An entity shall account for a state plan in the same way as for a multi-employer plan
a. True b. False
21. Where an entity pays insurance premiums to fund a post-employment benefit plan, the entity shall
a. treat such a plan as a defined contribution plan
b. treat such a plan as a defined benefit plan
c. treat such a plan as a defined contribution plan unless the entity will have either directly, or indirectly
through the plan a legal or constructive obligation
d. treat such a plan as a defined benefit plan unless the entity will have either directly, or indirectly
through the plan a legal or constructive obligation
22. When contributions to a defined contribution plan are not expected to be settled wholly before twelve
months after the end of the annual reporting period in which the employees render the related service, they
shall be
a. compounded using an interest rate b. discounted using the discount rate
c. linked to inflation using inflation index d. any of the above.
23. An entity shall recognise
a. the gross defined benefit liability and asset separately in the balance sheet
b. the gross defined benefit liability and asset combined in the balance sheet
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c. the net defined benefit liability the balance sheet.
d. the net defined benefit liability/asset the balance sheet.
24. When an entity has a surplus in a defined benefit plan, it shall measure the net defined benefit asset at
a. the surplus in the defined benefit plan
b. the asset ceiling, determined using the discount rate
c. lower of A and B
d. higher of A and B
25. The ultimate cost of a defined benefit plan may be influenced by many variables, such as final salaries,
employee turnover and mortality, employee contributions and medical cost trends. In order to measure the
present value of the post-employment benefit obligations and the related current service cost, it is necessary
a. to apply an actuarial valuation method b. to attribute benefit to periods of service
c. to make actuarial assumption d. All of the above
26. The rate used to discount post-employment benefit obligations (both funded and unfunded) shall be
determined by reference to
a. market yields at the end of the reporting period on government bonds.
b. market yields at the end of the reporting period on high quality corporate bonds.
c. higher of A and B
d. lower of A and B
27. Subsidiaries, associates, joint ventures and branches domiciled outside India shall discount
postemployment benefit obligations arising on account of post-employment benefit plans using the rate
determined by reference to
a. market yields at the end of the reporting period on government bonds.
b. market yields at the end of the reporting period on high quality corporate bonds.
c. higher of A and B
d. lower of A and B
In case, such subsidiaries, associates, joint ventures and branches are domiciled in countries where there
is no deep market in such bonds, the market yields at the end of the reporting period on high quality corporate
bonds of neighbouring countries shall be used.
a. True b. False
29. Pick the incorrect one regarding the termination benefits
a. Termination benefits include employee benefits resulting from termination of employment at the
request of the employee even without an entity’s offer.
b. Some entities provide a lower level of benefit for termination of employment at the request of the
employee (in substance, a post-employment benefit) than for termination of employment at the request
of the entity.
c. The difference between the benefit provided for termination of employment at the request of the
employee and a higher benefit provided at the request of the entity is a termination benefit.
30. Termination benefits are typically lump sum payments, but sometimes also include
a. enhancement of post-employment benefits, either indirectly through an employee benefit plan or
directly.
b. salary until the end of a specified notice period if the employee renders no further service that
provides economic benefits to the entity.
c. Both A&B
31. An entity shall recognise a liability and expense for termination benefits
a. When the entity can no longer withdraw the offer of those benefits
95
b. When the entity recognises costs for a restructuring that is within the scope of IPSAS 19 and involves
the payment of termination benefits.
c. Later of A & B
d. Earlier of A &B
The entity shall apply the requirements for short-term or long-term employee benefits respectively if
the termination benefits are expected to be settled wholly before twelve years after the end of the annual
reporting period in which the termination benefit is recognised or not expected to be settled wholly before
twelve years.
a. True b. False
IPSAS-39
1 2 3 4 5 6 7 8 9 10 11
D A C B A B C B B A B
12 13 14 15 16 17 18 19 20 21 22
C C A D D B A D A C B
23 24 25 26 27 28 29 30 31 32 XX
D C D A B B A C D B XX
1. The Standard requires an entity to recognise

(a) a liability when an employee has provided service in exchange for employee benefits to be paid in
the future and
(b) an expense when the entity consumes the economic benefit arising from service provided by an
employee in exchange for employee benefits.
4. Employees benefits includes (i) Short term (ii) Post-employment benefits (iii) Other long-term benefits
and (iv) Termination benefit
9. Pool the assets contributed by various entities that ARE NOT UNDER COMMON CONTROL
14. Plan Assets/Fund cannot be returned to the reporting entity, unless either:
(i) The remaining assets of the fund are sufficient to meet all the related
employee benefit obligations of the plan or the reporting entity; or
(ii) The assets are returned to the reporting entity to reimburse it for
employee benefits already paid.
17. The entity has a present legal or constructive obligation to make such payments as a result of PAST
EVENT
28. In case, such subsidiaries, associates, joint ventures and branches are domiciled in countries where there
is no deep market in such bonds, the market yields (at the end of the reporting period) ON GOVERNMENT BONDS
OF THAT COUNTRY SHALL BE USED.
29. Termination benefits result from either an entity’s decision to terminate the employment or an
employee’s decision to accept an entity’s offer of benefits in exchange for termination of employment
Termination benefits do not include employee benefits resulting from termination of employment at
the request of the employee without an entity’s offer, or as a result of mandatory retirement requirements,
because those benefits are post-employment benefits.
32. The entity shall apply the requirements for short-term or long-term employee benefits respectively if
the termination benefits are expected to be settled wholly before TWELVE MONTHS after the end of the annual
reporting period in which the termination benefit is recognised or not expected to be settled wholly before
TWELVE MONTHS
96
Public Sector Combination (IPSAS-40)
1. Scope of the IPSAS 40 extends to
i. Nationalizations
ii. Restructurings of central government ministries
iii. Reorganizations of local or regional governments, for example by rearranging territorial boundaries
or by combining entities
iv. Transfers of operations from one government (or governmental unit) to another.
a. ii, iii and iv b. Ii, ii and iii

a. The acquisition or receipt of an asset or a group of assets (along with any related liabilities) that does
not constitute an operation
b. The assumption of a liability or a group of liabilities that does not constitute an operation.
c. The accounting for the formation of a joint arrangement in the financial statements of the joint
arrangement itself.
d. All of the above
3. An entity, other than an investor-owned entity, that provides dividends, lower costs or other economic
benefits directly to its owners, members or participants. For example, a mutual insurance company, a credit
union and a co-operative entity are all mutual entities is called
a. Mutual Entity b. Related Entity
c. Special Purpose Entity d. Coating Entity
4. An amalgamation gives rise to a resulting entity that being
a. A public sector combination in which no party to the combination gains control of one or more
operations
b. A public sector combination in which one party to the combination gains control of one or more
operations, and in which there is evidence that the combination has the economic substance of an
amalgamation.
c. Either of A or B
d. Neither A nor B
5. A public sector combination in which one party to the combination gains control of one or more
operations, and there is evidence that the combination is not an amalgamation is called
a. Encroachment b. Acquisition
c. Associating d. Conveyance
6. Usually an obligation of the acquirer to transfer additional assets or equity interests to the former
owners of an acquired operation as part of the exchange for control of the acquired operation if specified future
events occur or conditions are met is known as
a. Contingent Consideration b. Provisional Consideration
c. Reserve Consideration d. Performance Consideration
7. An asset representing the future economic benefits arising from other assets acquired in an acquisition
that are not individually identified and separately recognized is
a. Patent b. Copyright
c. Goodwill d. All of the above
8. Evidence indicating amalgamation relating to consideration
a. Consideration is paid for reasons other than to compensate those with an entitlement to the net
assets of a transferred operation for giving up that entitlement
b. Consideration is not paid to those with an entitlement to the net assets of a transferred operation
97
c. Consideration is not paid because there is no-one (whether an individual or an entity) with an
entitlement to the net assets of a transferred entity.
d. All of the above
9. Evidence indicating amalgamation relating to decision-making
a. A public sector combination is imposed by a third party without any party to the combination being
involved in the decision-making process
b. A public sector combination is subject to approval by each party’s citizens through referenda
c. A public sector combination under common control occurs
d. All of the above
10. Where the indicators relating to consideration and the decision-making process do not provide sufficient
evidence to determine whether the combination is an amalgamation
a. the entity will classify the combination as an amalgamation
b. the entity will classify the combination as an acquisition
c. the entity will consider which classification and resulting accounting treatment would provide
information that best meets the objectives of financial reporting
d. the entity will consider economic outcome of each classification and classify in accordance with the
classification being more beneficial to the entity.
11. A resulting entity shall account for each amalgamation by applying the accounting method
a. Equity method b. modified pooling of interests method
c. modified distribution of interest method d. acquisition method
12. The modified pooling of interests method of accounting is a variation of the pooling of interests method
of accounting sometimes referred to as “merger accounting” in which the amalgamation is recognized on the
first day of upcoming reporting year.
a. True b. False
a. The resulting entity shall measure the identifiable assets and liabilities of the combining operations at
their carrying amounts in the financial statements of the combining operations as of the amalgamation
date
b. The carrying amounts are adjusted to conform to the resulting entity’s accounting policies and in
other limited circumstances.
c. The modified pooling of interests method of accounting recognizes the amalgamation on the date it
takes place. As a consequence, no comparative information is required.
d. All of the above
14. An amalgamation
a. does not give rise to goodwill and consequently a resulting entity does not recognize goodwill arising
from an amalgamation.
b. gives rise to goodwill and consequently a resulting entity recognizes goodwill arising from an
amalgamation.
c. does not give rise to goodwill but a resulting entity shall recognize nominal goodwill arising from an
amalgamation.
d. gives rise to goodwill but a resulting entity shall not recognize goodwill arising from an amalgamation.
a. The resulting entity recognizes the difference between the assets and liabilities assumed in an
amalgamation as one or more components of net assets/equity combining operations’ assets,
combining operations’ liabilities and combining operations’ non-controlling interests.
b. IPSAS 40 does not specify which components of net assets/equity should be used; this is a matter for
the professional judgment of the reporting entity.
c. IPSAS 40 requires a reporting entity to present prior period information
98
16. The acquirer accounts for each acquisition by applying the accounting method of
a. Equity method b. modified pooling of interests method
c. modified distribution of interest method d. acquisition method
a. The acquirer recognizes, separately from any goodwill recognized, the identifiable assets acquired,
the liabilities assumed and any non-controlling interest in the acquired operation.
b. This may include items not previously recognized by the acquired operation.
c. The acquirer measures the identifiable assets acquired and the liabilities assumed at their acquisition-
date carrying amount with limited exception.
d. All of the above
Goodwill is usually recognized only where consideration is transferred or there is an exchange of equity
instruments, which is very common in the public sector.
a. True b. False
a. Goodwill is only recognized to the extent that the acquisition will result in the generation of cash
inflows or a reduction in the net cash outflows of the acquirer. Any additional excess is recognized as a
loss.
b. In a bargain purchase, the net of the amounts of the identifiable assets acquired and the liabilities
assumed may exceed any consideration paid. The acquirer recognizes the resulting gain in surplus or
deficit.
c. Both A&B
20. In a bargain purchase, the net of the amounts of the identifiable assets acquired and the liabilities
assumed may exceed any consideration paid. The acquirer recognizes the resulting gain
a. surplus or deficit b. Retained Earning
c. Balance Sheet d. Statement of net asset/equity
21. In terms of IPSAS 40 goodwill is measured as
a. Total of the amounts of the identifiable assets acquired and liabilities assumed as on date of
acquisition
b. Excess of the amounts of the identifiable assets acquired over liabilities assumed as on date of
acquisition
c. Excess of the aggregate of (i) the consideration transferred (ii) The amount of any non-controlling
interest in the acquired operation and (iii) In an acquisition achieved in stages, the fair value of the
acquirer’s previously held equity interest OVER net of the acquisition-date amounts of the identifiable
assets acquired and liabilities assumed
d. The aggregate of (i) the consideration transferred (ii) The amount of any non-controlling interest in
the acquired operation and (iii) In an acquisition achieved in stages, the fair value of the acquirer’s
previously held equity interest AND net of the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed
IPSAS-40
1 2 3 4 5 6 7 8 9 10 11
D D A C B A C D D C B
12 13 14 15 16 17 18 19 20 21 XX
B D A C D C B C A C XX
99
12. The modified pooling of interests method of accounting is a variation of the pooling of interests method
of accounting (sometimes referred to as “merger accounting”) in which the amalgamation is recognized on the
date it takes place
15. IPSAS 40 permits, but DOES NOT REQUIRE, a reporting entity to present prior period information
17. The acquirer measures the identifiable assets acquired and the liabilities assumed AT THEIR
ACQUISITION-DATE FAIR VALUES WITH LIMITED EXCEPTION.
18. Goodwill is usually recognized only where consideration is transferred (or there is an exchange of
equity instruments, which IS NOT COMMON IN THE PUBLIC SECTOR.
100
Financial Instruments (IPSAS-41)
1. IPSAS 41 intending to replaces IPSAS 29 for the annual period beginning on or after
a. January 1, 2022 b. January 1, 2023
c. April 1, 2022 d. April 1, 2023
2. IPSAS 41 provides users of FS with more useful information than IPSAS 29, by
a. Applying a single classification and measurement model for financial assets that considers the
characteristics of the asset’s cash flows and the objective for which the asset is held
b. Applying a single forward-looking expected credit loss model that is applicable to all financial
instruments subject to impairment testing and
c. Applying an improved hedge accounting model that broadens the hedging arrangements in scope of
the guidance and develops a strong link between an entity’s risk management strategies and the
accounting treatment for instruments held as part of the risk management strategy.
d. All of the above
3. Contracts that give rise to both a financial asset in one entity and a financial liability or an equity
instrument in another is called
a. Provision Instruments b. Financial Instruments
c. Negotiable Instruments d. Lease Instruments
4. Types of Financial Instruments include
a. Financial Assets b. Financial Liabilities
c. Equity Instruments d. All of the above
5. A strategy used to reduce volatility associated with an identified risk is known as
a. Swapping b. Option
c. Hedging d. Bridging
6. Pick the correct about derivatives
i. A derivative is a contract that is settled in cash in the future, where the future cash flows change based
on another variable such as an interest rate, commodity price or foreign exchange rate.
ii. Common derivatives include Foreign exchanges forwards/futures contracts, Interest rate swaps and
Options.
iii. Sometimes a derivative is embedded in a contract where the cash flows of the combined instrument
vary in a way similar to a standalone derivative.
iv. These are common in contracts for the purchase or sale of items denominated in a foreign currency.
While the purchase or sales contracts is not a derivative, a derivative to purchase or sell a foreign
currency is embedded.

a. IPSAS 41 prescribes two criteria that are used to determine how financial assets should be classified
and measured
a. These are the entity’s management model for managing the financial assets and the contractual cash
flow characteristics of the financial asset.
c. Except for certain short-term receivables and payables, all financial instruments are initially measured
at cost
8. Except for certain short-term receivables and payables, all financial instruments are initially measured
a. at cost b. at fair value
c. lower of cost or fair value d. higher of cost or fair value
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9. Where in the case of a financial asset or financial liability not at fair value through surplus or deficit is
not ascertainable, the financial instruments are recognised at
a. transaction costs that are directly attributable to the acquisition or issue of the financial asset or
financial liability.
b. transaction costs that are indirectly attributable to the acquisition or issue of the financial asset or
financial liability.
c. transaction costs that are directly and indirectly attributable to the acquisition or issue of the financial
asset or financial liability.
d. lower of transaction costs that are directly and indirectly attributable to the acquisition or issue of
the financial asset or financial liability or market value of that financial asset or financial liability.
10. Short-term receivables and payables shall be measured at the original invoice amount at initial
recognition, if the effect of
a. compounding is material b. compounding is immaterial
c. discounting is immaterial d. discounting is material
11. IPSAS 41 classifies financial assets into two classifications
a. those measured at equity cost and those measured at revaluation.
b. those measured at amortized cost and those measured at fair value.
c. those measured at historical cost and those measured at nominal value
d. those measured at statistical cost and those measured at average value.
12. A debt instrument that (1) is held within a business model whose objective is to hold the financial asset
to collect the contractual cash flows and (2) has contractual terms that give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding must be measured at
a. amortized cost
b. fair value
c. fair value through net assets/equity, unless the asset is designated at fair value through surplus or
deficit under the fair value option.
d. amortized cost unless the asset is designated at fair value through surplus or deficit under the fair
value option.
13. A debt instrument that (1) is held within a business model whose objective is achieved both by collecting
contractual cash flows and selling financial assets and (2) has contractual terms that give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding, must be
measured at
a. fair value through net assets/equity, unless the asset is designated at fair value through surplus or
deficit under the fair value option.
b. amortized cost unless the asset is designated at fair value through surplus or deficit under the fair
value option
c. amortized cost
d. fair value
a. Generally debt instruments are to be measured at cost.
b. Financial liabilities held for trading are measured at fair value through surplus or deficit, and all other
financial liabilities are measured at amortized cost unless the fair value option is applied.
c. Both A&B
15. Changes in fair value attributable to changes in credit risk of the liability are presented in
a. surplus of deficit b. carrying amount
c. net assets/equity d. general reserves
16. All derivatives in the scope of IPSAS 41, including those linked to unquoted equity investments, are
measured
102
a. at fair value b. cost
c. lower of fair value or cost d. higher of fair value or cost
a. Changes in the value of derivatives are recognized in surplus or deficit unless the entity has elected
to apply hedge accounting by designating the derivative as a hedging instrument in an eligible hedging
relationship.
b. Embedded derivatives that under IPSAS 29 would have been separately accounted for at fair value
through surplus or deficit because they were not closely related to the host financial asset will no longer
be separated.
c. Instead, the contractual cash flows of the financial asset are assessed in their entirety, and the asset
as a whole is measured at fair value through surplus or deficit if the contractual cash flow characteristics
test is not passed.
d. All of the above
18. Embedded derivatives not closely related to financial liabilities will be accounted for separately at fair
value in the case of financial liabilities not designated at fair value through surplus or deficit as in IPSAS 29.
a. True b. False
19. The hedge accounting requirements in IPSAS 41 are
a. mandatory
b. optional
c. mandatory for cash basis of accounting of hedging
d. optional for accrual basis of accounting of hedging
a. If the eligibility and qualification criteria are met, hedge accounting allows an entity to reflect risk
management activities in the financial statements.
b. It is accounted for by matching gains or losses on financial hedging instruments with losses or gains
on the risk exposures they hedge.
c. Both A&B
21. There are three types of hedging relationships, pick the incorrect one out
a. fair value hedge
b. cash flow hedge
c hedge of a net investment in a foreign operation
d. market value hedge
22. (i) the hedging relationship consists only of eligible hedging instruments and eligible hedged items
(ii) at the inception of the hedging relationship there is formal designation and documentation of the
hedging relationship and the entity’s risk management objective and strategy for undertaking the hedge
(iii) the hedging relationship meets all of the hedge effectiveness requirements.
A hedging relationship qualifies for hedge accounting

a. only if all of the above criteria are met
b. if any of the above criteria is met
c. only if two of the three above criteria are met
d. only if none of the above criteria are met
23. In order to qualify for hedge accounting, the hedge relationship must meet the effectiveness criteria
a. there is an economic relationship between the hedged item and the hedging instrument
b. the effect of credit risk does not dominate the value changes that result from that economic
relationship
c. the hedge ratio of the hedging relationship is the same as that actually used in the economic hedge.
d. All of the above
103
24. The forward-looking model requires an entity to recognize expected credit losses
a. a trigger event to occur prior to recognising credit loss
b. at all times
c. just prior to disposal of the financial instruments
d. at close of every account year.
25. IPSAS 41
a. prohibits a single forward-looking model that eliminates the threshold for impairment recognition.
b. It is now necessary for a trigger event to occur prior to recognizing a credit loss.
c. Both A&B
26. The single forward looking model of IPSAS 41
a. uses a dual measurement approach
b. under dual measurement approach expected credit losses are measured as either 12-month expected
credit losses or lifetime expected credit losses
c. Both A&B
27. Stages of Impairment of financial instruments in accordance with the IPSAS 41 except
a. Expected credit losses with the exception of purchased or original credit-impaired financial assets are
required to be measured through a loss allowance
b. loss allowance should be at an amount equal to the 12-month expected credit losses or full lifetime
expected credit losses.
c. The latter applies if credit risk has decreased significantly since initial recognition of the financial
instrument.
28. Interest revenue for credit-impaired financial asset is calculated by applying the effective interest rate
a. to the amortized cost which is the gross carrying amount minus loss allowance
b. to the amortized cost which is the gross carrying amount plus loss allowance
c. the gross carrying amount.
d. higher of the above
29. Interest revenue for financial assets other than credit-impaired financial assets is calculated by applying
the effective interest rate
a. the gross carrying amount.
b. to the amortized cost which is the gross carrying amount minus loss allowance
c. to the amortized cost which is the gross carrying amount plus loss allowance
d. higher of the above
If, at the reporting date, the credit risk on a financial instrument has increased significantly since initial
recognition, an entity shall measure the loss allowance for that financial instrument at an amount equal to 12-
month expected credit losses
a. True b. False
a. A financial asset that is said to be credit-impaired when one or more events that have a detrimental
impact on the estimated future cash flows of that financial asset have occurred.
b. The difference between all contractual cash flows that are due to an entity in accordance with the
contract and all the cash flows that the entity expects to receive is called the credit risk
c. The rate that exactly discounts the estimated future cash payments or receipts through the expected
life of the financial asset to the amortized cost of a financial asset that is a purchased or originated
credit-impaired financial asset is known as Credit adjusted effective interest rate
d. All of the above
104
32. The relationship between the quantity of the hedging instrument and the quantity of the hedged item
in terms of their relative weighting is known as
a. solvency ratio b. Hedge ratio
c. Activity ratio d. Absolute Liquid ratio
IPSAS-41
1 2 3 4 5 6 7 8 9 10 11
A D B D C D C B A C B
12 13 14 15 16 17 18 19 20 21 22
D A B C A D A B C D A
23 24 25 26 27 28 29 30 31 32 XX
D B D C C A A A D B XX
7. Except for certain short-term receivables and payables, all financial instruments are initially measured
at fair value plus or minus, in the case of a financial asset or financial liability not at fair value through surplus or
deficit, transaction costs that are directly attributable to the acquisition or issue of the financial asset or
financial liability
14. Generally debt instruments must be measured at fair value through surplus or deficit.
105
Social Benefits (IPSAS-42)
1. Objective of the IPSAS 42 is
a. To help users of the financial statements and general purpose financial reports to assess the nature
of social benefits provided by the entity, the features of the operation of social benefit schemes
b. the impact of social benefits on the entity’s financial performance, financial position and cash flows.
c. Both A&B
2. The IPSAS 42 establishes principles and requirements for
i. Recognizing expenses and liabilities for social benefits;
ii. Measuring expenses and liabilities for social benefits;
iii. Presenting information about social benefits in the financial statements
iv. Determining what information to disclose to enable users of the financial statements to evaluate the
nature and financial effects of the social benefits provided by the reporting entity.

3. Social Benefits are
a. CASH TRANSFER provided to Specific individuals and/or households who meet eligibility criteria in
order to mitigate the effect of social risks and address the needs of society as a whole.
b. NON-CASH TRANSFER provided to Specific individuals and/or households who meet eligibility
criteria in order to mitigate the effect of social risks and address the needs of society as a whole.
c. CASH OR NON-CASH TRANSFER provided to Specific individuals and/or households who meet
eligibility criteria in order to mitigate the effect of social risks and address the needs of society as a
whole.
d. GOODS and SERVICES provided to Specific individuals and/or households who meet eligibility
criteria in order to mitigate the effect of social risks and address the needs of society as a whole
4. Accounting approaches for social benefits are
a. The Traditional approach and the Modern Approaches
b. The General/Obligating event approach and the insurance approach
c. The Close-ended approach and Open-ended approach
d. The Straight-line approach and Diminishing approach
5. Under General Approach an entity shall recognize a liability for a social benefit scheme when
a. The entity has a present obligation for an outflow of resources that results from a past event
b. The present obligation can be measured in a way that achieves the qualitative characteristics and
takes account of constraints on information in general purpose financial reports as set out in the
Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities.
c. Both A&B
6. Pick the correct one regarding accounting of social benefits under General Approach
i. An entity shall recognize an expense for a social benefit scheme at the same point that it recognizes a
liability.
ii. An entity shall measure the liability for a social benefit scheme at the best estimate of the costs i.e.,
the social benefit payments that the entity will incur in fulfilling the present obligations represented by
the liability.
iii. The liability for a social benefit scheme shall be reduced as social benefit payments are made.
iv. Any difference between the cost of making the social benefit payments and the carrying amount of
the liability in respect of the social benefit scheme is recognized in surplus or deficit in the period in
which the liability is settled.
106
a. ii, iii and iv b. i, ii and iv
7. Under General Approach where a liability is discounted
a. the liability is decreased and interest expense recognized in each reporting period until the liability is
settled, to reflect the unwinding of the discount.
b. the liability is increased and interest expense recognized in each reporting period until the liability is
c. the asset is increased and interest income recognized in each reporting period until the liability is
d. the asset is decreased and interest income recognized in each reporting period until the liability is
Where a liability has yet to be settled, the liability shall be reviewed at each reporting date, and adjusted
to reflect the current best estimate of the costs (i.e., the social benefit payments) that the entity will incur in
fulfilling the present obligations represented by the liability.
a. True b. False
9. Pick the correct one with regard to General Approach of accounting social benefits
a. An entity shall initially measure the expense for a social benefit scheme at an amount equivalent to
the amount of the liability measured.
b. Where the entity makes a social benefit payment prior to all eligibility criteria for the next payment
being satisfied, it shall measure the payment in advance or expense recognized.
c. Both A&B
10. Insurance Approach is applied by the entity where
a. The social benefit scheme is not intended to be fully funded from contributions
b. There is evidence that the entity manages the scheme in the same way as an issuer of insurance
contracts, including assessing the financial performance and financial position of the scheme on a
regular basis.
c. Both A&B
11. An entity is permitted, but not required, to recognize and measure the assets, liabilities, revenue and
expenses associated with that social benefit scheme by applying
c. IPSAS 19 d. IPSAS-17
12. Disclosure requirement for General Approach under IPSAS 42
a. Explains the characteristics of its social benefit schemes
b. Explains the demographic, economic and other external factors that may affect its social benefit
schemes.
c. Both A&B
13. Disclosure requirement for Insurance Approach under IPSAS 42
a. The basis for determining that the insurance approach is appropriate
b. The information required by the relevant international or national accounting standard dealing with
insurance contracts and
c. Any additional information required by this Standard.
d. All of the above
107
IPSAS-42
1 2 3 4 5 6 7 8 9 10 11 12 13
C D A B C D B A C B D C D
10. Insurance Approach is applied by the entity where

a. The social benefit scheme is intended to be fully funded from contributions and
b. There is evidence that the entity manages the scheme in the same way as an issuer of insurance
contracts, including assessing the financial performance and financial position of the scheme on a regular
108
109

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The International Public Sector Accounting Standards (IPSAS)

a. i, ii, iii and iv b. ii, iii, iv and v

1. Objectives of IPSAS are

a. i, ii, iii and v b. i, ii, iii and iv

a. i, iii, iv and v b. i, ii, iv and v

a. i, ii, iv and v b. i, iii, iv and v

1. Cash flow information allows users

a. ii, iii, iv and v b. i, ii, iii and iv

a. i, ii and iii b. ii, iii and iv

a. i, ii, iii and iv b. ii, iii, iv and v

1. In terms of IPSAS 05 Borrowing costs that are

a. i, ii, iii and iv b. ii, iii, iv and v

1. In terms of IPSAS 09 Revenue is recognized when

a. ii, iii and iv b. i, ii and iii

a. i, ii, iii and iv b. i, iii, iv and v

1. When the entity’s functional currency is hyperinflationary,

a. i, ii and iii b. ii, iii and iv

1. Objectives of IPSAS 12 include except

a. i, ii, iii and iv b. ii, iii, iv and v

a. i, ii and iii b. i, iii and iv

1. The objective of the IPSAS 13 is to

a. i, ii and iii b. ii, iii and iv

a. ii, iii, iv and v b. i, ii, iii and iv

1. Objectives of IPSAS 14 are

a. ii, iii, iv and v b. i, ii, iii and iv

1. A property is said to be investment property if

a. i, ii and iii b. i, iii and iv

a. i, ii and iii b. i, iii and iv

1. Objectives of IPSAS 19 are

a. i, ii, iii and iv b. ii, iii, iv and v

a. ii, iii and iv b. i, ii and iv

1. Objectives of IPSAS-21 are

a. i, ii, iii and iv b. ii, iii, iv and v

1. Under statistical bases of financial reporting the public sector comprises

a. i, ii, iii and iv b. ii, iii, iv and v

a. i, ii, iii and iv b. ii, iii, iv and v

1. IPSAS 26 does not apply to

a. i, ii, iii and iv b. ii, iii, iv and v

a. i, ii, iii and iv b. ii, iii, iv and v

4. Adjusted for FUTURE PERIOD.

a. i, ii and iii b. ii, iii and iv

a. ii, iii and iv b. i, ii and iii

a. ii, iii, iv and v b. i, ii, iii and iv

a. i, ii, iii and iv b. ii, iii, iv and v

a. i, ii and iii b. ii, iii and iv

a. ii, iii, iv and v b. i, ii, iii and iv

a. ii, iii, iv and v b. i, ii, iii and iv

a. ii, iii, iv and v b. i, ii, iii and iv

a. i, ii, iii and iv b. ii, iii, iv and v

a. ii, iii and iv b. i, ii and iii

1. Objectives of IPSAS 33 are to

a. ii, iii and iv b. i, ii and iii

a. i, ii, iii and iv b. ii, iii, iv and v

1. Objectives of the IPSAS 34 are

a. i, ii and iii b. ii, iii and iv

a. ii, iii and iv b. i, iii and iv

a. i, iii and iv b. ii, iii and iv

a. ii, iii and iv b. i, ii and iii