Reading 40- LOS a ～ Q1－2 style, black, methods, following, accounting

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1.Which of the following methods is NOT a valid method of accounting for goodwill?

A)   Subject to a monthly impairment test.

B)   Not amortized.

C)   Amortized over a specified period of time.

D)   Fully deducted against equity immediately.

2.Which of the following items is least likely to have major differences between national accounting standards and International Accounting Standards (IAS)?

A)   Consolidation.

B)   Impairment losses.

C)   Employee benefits.

D)   Revenue.

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1.Which of the following methods is NOT a valid method of accounting for goodwill?

A)   Subject to a monthly impairment test.

B)   Not amortized.

C)   Amortized over a specified period of time.

D)   Fully deducted against equity immediately.

The correct answer was A)

The impairment test is annual, not monthly. The other three methods are possible, including not amortizing goodwill if it can be reasonably shown that goodwill has not lost its value (i.e. revenue-generating ability).

2.Which of the following items is least likely to have major differences between national accounting standards and International Accounting Standards (IAS)?

A)   Consolidation.

B)   Impairment losses.

C)   Employee benefits.

D)   Revenue.

The correct answer was D)

Consolidations, impairment losses and employee benefits are more subject to accounting manipulation and have considerably different treatments amongst different countries.