Question: (L3) 2 QUESTION 1: TRUE/FALSE QUESTIONS (20 MARKS) 1.1 Indicate whether the following statements are True or False. 1.1.1 The residual interest in the assets after deducting all liabilities is called capital. 1.1.2 Cash basis means recognising elements when the definition and recognition criteria are met. 1.1.3 Offsetting means subtracting an expense from the income and showing the net effect in the books. 1.1.4 Intangible assets are expected to be realised within 12 months after the reporting date. 1.1.5 Section 24 of the Companies Act stipulates that, annual financial statements must be kept for a period of seven years after the date of issue. 1.1.6 An issue of preference shares is always recognised as equity. 1.1.7 Income tax, VAT and Employees' tax balances may be set off against each other when presenting tax payable in the financial statements. 1.1.8 The dividend declared is reflected net of dividends tax withheld in the books the company declaring it. 1.1.9 A retrospective adjustment relating to a change in the accounting policy or a correction of error is effected in the financial statements on the opening balance of the previous year. 1.1.10 When the company has made a tax loss there is still a current income tax expense for that year. QUESTION 2 CHOOSE THE MOST CORRECT ANSWER(20 MARKS) 2.1 The Conceptual Framework is technically___________. A. an IFRS B. an IAS C. a SIC D. an IFRSIC E. none of the above