WorldatWork Certified Compensation Professional (CCP) T7 Questions & Answers

• Question 21:

  What is the present value of any economic benefits available in the form of refunds from or reductions in the future contributions to the defined benefits plan called?

  A. Net defined benefit liability (asset)

  B. Asset ceiling

  C. Fair value

  D. Net present value

  Correct Answer: B

• Question 22:

  Why is accounting for defined benefits plans one of the most complex issues in International Financial Reporting Standards?

  A. Because it involves incorporating actuarial assumptions into measurement of the obligation and the expenses

  B. Because defined benefits plan obligations are not measured on a discounted basis

  C. Because defined benefits plans must be settled within ten years after the employee renders the related service

  D. Because the employer is not allowed to incorporate actuarial assumptions into measurement of the obligation and the expenses

  Correct Answer: A

• Question 23:

  What are the expenses related to a company's financing and investing activities called?

  A. Noncurrent expenses

  B. Current liabilities

  C. Non operating expenses

  D. Operating expenses

  Correct Answer: C

• Question 24:

  Company XYZ has a group of six employees who will be retiring in four years -- on the 31st of December. Each retiree will receive $125,000. Company XYZ's accountants must make provisions in their accounts for this. Calculate the present value of future payments based on a discount rate of 10%.

  A. $512,250

  B. $551,250

  C. $515,500

  D. $521,500

  Correct Answer: A

• Question 25:

  Who appoints International Accounting Standards Board (IASB) members?

  A. Standards Advisory Council (SAC)

  B. International Accounting Standards Committee (IASC) Foundation

  C. International Financial Reporting Interpretations Committee (IFRIC)

  D. International Accounting Standards Board (IASB) staff

  Correct Answer: B

• Question 26:

  Which of the following is one of the four main financial statements?

  A. Statement of full disclosure

  B. Statement of assets

  C. Statement of changes in shareholders' equity

  D. Statement of accrual accounting

  Correct Answer: C

• Question 27:

  Predictive value is an ingredient of which of the following fundamental characteristics of information?

  A. Complete

  B. Comparability

  C. Relevance

  D. Neutral

  Correct Answer: C

• Question 28:

  Which of the following best defines the term "asset"?

  A. The residual interest in the assets of the entity after deducting all its liabilities.

  B. A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

  C. 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

  D. Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants

  Correct Answer: B

• Question 29:

  Which fundamental qualitative characteristics make accounting information useful for decision-making?

  A. Relevance and faithful representation

  B. Cost and materiality

  C. Assets and liability

  D. Income and expenses

  Correct Answer: A

• Question 30:

  Which statement below most accurately describes a primary purpose of the International Accounting Standards Committee (IASC) Foundation?

  A. Approves principles-based standards and informs International Accounting Standards Board (IASB) of implications of proposed standards

  B. Oversees standards set for the public sector

  C. Monitors International Accounting Standards Board (IASB)'s effectiveness, raise funds, approve budget, responsible for constitution

  D. Provides advice to International Accounting Standards Board (IASB) on priorities

  Correct Answer: C