Reference no: EM132785679

Problem 1: All of the following are true with regard to impairment testing of long-lived assets except:

Option 1: If either the fair value less cost to sell or the value-in-use is higher than the carrying amount, no impairment loss will be recorded.

Option 2: The impairment test compares the asset's carrying value with the lower of its fair value less cost to sell and its value-in-use.

Option 3: If the recoverable amount is lower than the carrying value, an impairment loss will be reported on the period's income statement.

Option 4: If impairment indicators are present, the company must conduct an impairment test.

Problem 2: A liability shall be classified as a current liability when it satisfies any of the following criteria, except

Option 1: The entity has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

Option 2: It is expected to be settled in the entity's normal operating cycle.

Option 3: It is due to be settled within twelve months after the end of the reporting period.

Option 4: It is primarily held for the purpose of being traded.