WorldatWork Certified Compensation Professional (CCP) T7 Questions & Answers

• Question 41:

  Level 3 of the conceptual framework for financial reporting includes five basic assumptions. Which of the following describes the basic assumption of economic entity?

  A. The company lasts long enough to fulfill objectives and commitments

  B. The company keeps its activity separate from its owners and other business units

  C. The company can divide its economic activities into time periods

  D. Transactions are recorded in the periods in which the events occur

  Correct Answer: B

• Question 42:

  Defined benefit pension commitments often represent a company's largest single financial liability. IAS 19 was amended as of January, 2014. What does this amendment require?

  A. That surplus or deficit of a pension fund be detailed in the financial statement

  B. That any existing deficit of a pension fund be detailed in the financial statement

  C. That any projected deficit of a pension fund be detailed in the financial statement

  D. That companies state whether they have a defined benefit or defined contribution plan in the financial statement

  Correct Answer: A

• Question 43:

  Level 2 of the conceptual framework of International Accounting Standards Board (IASB) identifies qualitative characteristics of accounting information. These characteristics distinguish more useful information from less useful information.

  To what end is this distinction useful?

  A. For reporting purposes

  B. For business strategy

  C. For decision-making purposes

  D. For organizational vision

  Correct Answer: C

• Question 44:

  To estimate how much the employees have earned for their work in the current and prior periods in order to attribute the benefit to the periods of service and to incorporate estimates about demographics and financial variables into calculations, a company must utilize what method?

  A. Re-measurement method

  B. Fair value method

  C. Net present value method

  D. Projected unit credit method

  Correct Answer: D

• Question 45:

  IAS 19 classifies employee benefits into four main categories. Which of the following best represent those categories?

  A. Wages, short-term benefits, long-term benefits, termination benefits

  B. Wages, profit-sharing, bonuses, non-monetary bonuses

  C. Short-term benefits, post-employment benefits, long-term benefits, termination benefits

  D. Wages, short-term benefits, bonuses, termination benefits

  Correct Answer: C

• Question 46:

  What is the term that describes the outflows of assets or incurring of liabilities during a period as a result of delivering or producing goods and/or rendering services?

  A. Period costs

  B. Production costs

  C. Cost of materials

  D. Expenses

  Correct Answer: D

• Question 47:

  Which of the following is a disadvantage of reporting assets at historical cost?

  A. Historical cost is not objective

  B. Historical cost is not particularly relevant to most readers

  C. Historical cost is subject interpretation, and therefore to bias

  D. Historical cost is not verifiable

  Correct Answer: B

• Question 48:

  Which body has the sole responsibility for setting standards?

  A. Standards Advisory Council (SAC)

  B. International Accounting Standards Board (IASB)

  C. International Financial Reporting Interpretations Committee (IFRIC)

  D. Accounting Principles Board (APB)

  Correct Answer: B

• Question 49:

  Company XYZ outsourced its printing services to a specialist printing firm. The specialist firm took

  responsibility for the staff, though the team remains on Company XYZ's premises.

  Which of the following is true?

  A. Because they remain on your premises, they are considered staff costs

  B. Due to the outsourcing of the staff, they are now considered service-supplier costs rather than staff costs

  Correct Answer: B

• Question 50:

  Which characteristic requires a high degree of consensus among individuals on a given measurement?

  A. Faithful representation

  B. Verifiability

  C. Comparability

  D. Neutral

  Correct Answer: B