Question

Question 2 A company borrowed $14,000,000 on the 1 July 2013. The term of the loan is 7 years, with interest to be paid each year on 30 June each year In addition, $2,000,000 of the principal is to be paid on 30 June each year. Which of the following statements is correct? In the statement of financial position at 30 June 2017 A. This will be included as a current liability B. This will be included as a non-current liability C. This will be included partly as a current liability and partly as non-current D. None of the other answers are correct Question3 Provisions which fail the recognition criterla and where the possibility of an outflow is remote are required to A be recognised as a contingent liability B. be disclosed as a contingent liabillity C. not be disclosed or recognised in the financial statement (or notes) at all D. None of the other answers are correct Question 4 Summer Limited is a manufacturer of swimming pools and provides its customers with warranties at the time of that there will be some daims under the warranties and the expected cost of meeting these clalms has been tion. The warranty applied for three years from the date of sale/completion. Past experience shows estimated. The approprlate treatment of this Item under lAS 37/AAS8 137 Provisions, Contingent Liabilities amd Contingent Assets, Is to A recognise a provision based on estimated cost these clalms create a reserve for the estimated costs of the warranty clalms c recognibe the epenses in future perkeds in which the economic outflows occur (f.e. when warranty clalms are met) None of the other answers are correct D.

Answer 1

Question 2 ---C. This will be included partly as a current liability and partly as non current

Question 3 --B. be disclosed as contingent liability

Question 4 ---A. Recognise a provision based on estimated cost of claims