WorldatWork Certified Compensation Professional (CCP) T7 Questions & Answers

• Question 71:

  The economic activities of US-based Company XYZ is divided into 12-month periods for the purpose of issuing annual reports. Which basic assumption of accounting does this practice represent?

  A. Going concern

  B. Monetary unit

  C. Periodicity

  D. Economic entity

  Correct Answer: C

• Question 72:

  Employee benefits that are not short-term, post-employment or termination benefits are considered what kind of benefits?

  A. Short-term benefits

  B. Post-employment benefits

  C. Termination benefits

  D. Long-term benefits

  Correct Answer: D

• Question 73:

  Which of the following is a benefit of moving toward a single set of standards?

  A. Create equity across the economies of different countries

  B. Reduce the number of cross-border capital flows

  C. Greater comparability between companies equals lower cost to investors

  D. Less competition among exchanges

  Correct Answer: C

• Question 74:

  What is the purpose of an income statement?

  A. To show liability and equity and the manner in which those funds are employed

  B. To account for changes in cash during the accounting period

  C. To show details of the nature of a company's operating activities

  D. To reconcile the beginning and ending balances of stockholders' equity

  Correct Answer: C

• Question 75:

  An offer of redundancy is an example of which kind of employee benefits?

  A. Short-term benefits

  B. Post-employment benefits

  C. Termination benefits

  D. Long-term benefits

  Correct Answer: C

• Question 76:

  In defined contribution plans when the contributions are not expected to be settled wholly before twelve months after the end of the reporting period, what must occur?

  A. The employer must assume risk for the plan

  B. Contributions must be discounted

  C. Contributions must not be discounted

  D. The employer must pay a specified amount to the employee

  Correct Answer: B

• Question 77:

  The International Accounting Standards Board (IASB) has given companies the option to use fair value as the basis for measurement of financial assets and liabilities. Which of the following best defines fair value?

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

  B. Faithful representation of the amount paid for a given item

  C. Amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm's length transaction

  D. Quality of information that confirms users' earlier expectations

  Correct Answer: C

• Question 78:

  What is the timing of revenue recognition?

  A. When it is probable that future economic benefits will flow to the company and reliable measurement of the amount of revenue is possible

  B. When the company reports current and non-current classifications in its statement of financial position

  C. When economic benefits are received by the company and reliable measurement of the amount of revenue is possible

  D. When users have sufficient reasonable knowledge of business and financial accounting matters to understand the information

  Correct Answer: A

• Question 79:

  Employee benefits that are expected to be settled wholly before twelve months after the end of the annual reporting people in which the employee rendered the related service are considered what kind of benefits?

  A. Short-term benefits

  B. Post-employment benefits

  C. Termination benefits

  D. Long-term benefits

  Correct Answer: A

• Question 80:

  Employee benefits provided in exchange for the end of an employee's employment are considered what kind of benefits?

  A. Short-term benefits

  B. Post-employment benefits

  C. Termination benefits

  D. Long-term benefits

  Correct Answer: C