1. Grants are normally recognized at

a. Current value

b. Market value

c. Fair value

d. Net realizable value

2. Which of the following transactions results to the recognition open asset?

a. An entity forecasts approaches of inventory in the coming month. The purchase is highly probable.

b. an entity enters into firm commitment to purchase inventory in the coming month. The entity cannot cancel the commitment without paying a penalty. The contract is not or any news onerous.

c. during the period, one of the buildings of an entity was destroyed by a calamity.

d. An entity receives a non-monetary grant from the government.

3. The issuance of financial reporting standards in the Philippines is the responsibility of the

a. PICPA

b. FRSC

c. AASC

d. CPE Council

e.

4. Which of the following is an acceptable method of reporting other comprehensive income and its components?

a. in a statement of profit or loss and other comprehensive income

b. in a statement of changes in equity

c. in the notes only

d. all of these

5. According to PAS 27, investment in subsidiaries, associates or joint ventures or accounted for in the separate financial statements

a. at cost

b. at fair value in accordance with PFRS 9

c. using the equity method under PAS 28

d. any of these as a matter of accounting policy choice

6. This method a presenting cash flows from (used in) operating activities shows each major class of gross cash receipts on gross cash payments.

a. Direct method

b. inverse method

c. indirect method

d. straight method

7. The PFRS do not apply to

a. sole proprietorships

b. partnerships

c. cooperatives

d. the PFRS apply to all of these entities.

8. During the lifetime open entity, accountants produce financial statements at arbitrary points in time in accordance with which basic accounting concepts?

a. Cost/benefit constraint

b. periodicity assumption

c. conservatism constraint

d. matching principle

9. Which of the following properties falls under the definition of investment property?

I. Land held for long term capital appreciation.

II. property occupied by an employee paying rent at market rate.

III. property being constructed on behalf of third parties.

IV. a building owned by an entity and leased out under an operating lease.

a. I and II

b. I and IV

c. II and IV

d. II, III and IV

10. If a cash generating unit (CGU) is impaired, the impairment loss is allocated first to

a. the goodwill in that CGU

b. the noncurrent asset in that CGU

c. the current assets in that CGU

d. A&B

11. Which of the following is classified as an equity instrument rather than a financial liability?

a. Preference shares that are mandatorily redeemable

b. a contract that is settled by the delivery of a variable number of the entity's own equity instruments in exchange for a fixed amount of cash or another financial asset.

c. A contract that is settled by the delivery of a fixed number of the entity's own equity instruments in exchange for a variable amount of cash or another financial asset.

d. shares issued but were subsequently reacquired.

12. "Aanhin mo pa ang damo kung patay na ang kabayo."

a. Materiality

b. relevance

c. timeliness

d. biological asset - horse

13. Which of the following is correct regarding asset recognition?

a. Items that do not meet all the requirements for recognition are always ignored.

b. before an entity recognizes an item as an asset, the item must be owned by the entity.

c. Physical form is necessary for an item to be recognized as an asset.

d. Costs are recognized as assets if they meet the definition of an asset as well as the recognition criteria of "probable future economic benefits" and "reliable measurement of cost or other value."

14. Which of the following is accounted for under PAS 41?

a. bearer plants

b. bearer animals

c. government grants related to biological assets measured at cost.

d. plants used in landscaping.

15. It is the accounting process of assigning numbers, commonly in monetary terms, to the economic transactions and events.

a. analyzing

b. measuring

c. classifying

d. interpreting

16. Choose the correct statement

a. financial accounting is a social science and cannot be influenced by changes in legal, political,business and social environments.

b. Financial accounting is an information system designed to provide information primarily to internal users.

c. General purpose financial statements must be prepared by a certified public accountant.

d. The preparation of general-purpose financial statements is usually based on the assumption that the primary users of the information are external decision makers.

17. Which of the following assets may not be depreciated?

a. Building that is measured under their evaluation model.

b. Equipment that becomes idle or is retired from active use.

c. Land

d. landfill site

18. Comprehensive income excludes which of the following

a. gains and losses arising from translation of foreign operation.

b. gains and losses from investments measured at fair value through other comprehensive income.

c. correction of prior period error

d. Share in the profit or loss of an associate that is accounted for using the equity method.

19. The manner in which the accounting records are organized and employed within a business is referred to as

a. accounting system

b. voucher system

c. business document

d. special journals

20. Interest expense that is paid in cash is presented in the statement of cash flows under

a. operating activities

b. investing activities

c. financing activities

d. A or C

21. Entity A acquires a legal right to search for mineral resources in a specific area. What PFRS should Entity A apply in accounting for the costs it incurs on its exploration and evaluation activities?

a. PAS 26

b. PFRS 4

c. PFRS 5

d. PFRS 6

22. According to the conceptual framework, the correct classifications of relevance and reliability, respectively, are

a. fundamental, enhancing

b. fundamental, fundamental

c. enhancing, fundamental

d. fundamental, none

23. In accounting parlance, depreciation means

a. the amount derived by dividing the cost of an asset over its useful life

b. the amount derived by multiplying the cost of an asset by its useful life

c. the systematic allocation of the depreciable amount of an asset over its useful life

d. the decline in the value of an asset during the period

24. Which of the following cost formulas is not allowed under PAS 2?

a. FIFO

b. weighted average

c. specific identification

d. LIFO

25. Entity A pay salaries on a bi-monthly basis. entity a has 10 employees, each earning 20,000 pesos per month. During the month of April 20X1, none of the employees were absent, late or have rendered overtime service. Which of the following is the correct regarding the timing of recognition and the amount of salaries expense recognized on the 1st payday in the month of April 20X1?

Timing of recognition Amount recognized

a. April 1 20,000

b. April 15 20, 000

c. April 1 100,000

d. April 15 100,000

26. The qualitative characteristics that enhance the usefulness of financial information includes all of the following except

a. comparability

b. verifiability

c. timeliness

d. materiality

27. the amount at which an asset is recorded in the books of accounts minus any accumulated depreciation and accumulated impairment losses is referred to as

a. Fair value

b. cost

c. carrying amount

d. amortized cost

28. complete set of financial statements does not include a

a. statement of financial position

b. statement of comprehensive income

c. statement of retained earnings

d. notes

29. all of the following are events considered non reciprocal transfers, except

a. declaration of cash dividends

b. declaration of stock dividends

c. payment of accounts payable

d. imposition of fines

30. The government extends a repayable loan to entity a. The loan pays interest at market rate. Entity A should account for the government loan using which of the following standards?

a. PAS 20

b. PAS 41

c. PFRS 9

d. PFRS 16

31. A company is issuing its comparative financial statements for the year 20X1and 20X2. If the company is required to issue an additional statement of financial position, such statement should be dated

a. as of January 1, 20X1

b. as of January 1, 20X2

c. as of December 31 20X2

d. as of December 31 20X1

32. according to PAS 23, borrowing costs are capitalized when

a. they relate directly to the acquisition, construction or production of a qualifying asset.

b. The entity chooses to capitalize them.

c. They are material and are expected to be incurred over more than one reporting period.

d. all of these

33. a concept that states that all the components about complete set of financial statement are interrelated

a. entity

b. concept of articulation

c. accounting process

d. principal fair presentation

34. general purpose financial statements are

a. those statements that cater to the common and specific needs of a wide range of external users.

b. Those statements that cater to the common needs of a wide range of external users and internal users

c. those statements that cater to the common needs of a limited range of external users

d. those statements that cater to the common needs of a wide range of external users

35. which of the following is considered a bearer plants

a. palm oil

b. corn oil

c. baby oil

d. oil palm

36. after recognition, exploration and evaluation assets are accounted for under the

a. cost model

b. fair value model

c. revaluation model

d. A or C

37. According to PFR S5, assets held for sale are measured at

a. Fair value

b. fair value less costs to sell

c. carrying amount

d. lower of B&C

38. which of the following statements is true?

a. In current practice, accounting provides only quantitative information that is useful in making economic decisions

b. external users are those who do not have the authority to demand financial reports tailored to their specific needs.

c. under the stable monetary unit assumption, the owners of the business and the business are viewed as a single reporting entity. Therefore, the personal transactions of the owners are recorded in the books of accounts .

d. The practice of accountancy in the Philippines is regulated under RA 9892

39. Which of the following are not related parties under PAS 24?

a. A parent and its subsidiaries

b. an investor and its associate

c. family member of a chief executive officer and the entity

d. a shareholder who holds 2% interest in the voting rights of the entity

40. according to PFRS 10, which of the following is not an element of control?

a. power

b. exposure or rights to variable returns

c. major Holdings

d. ability to affect return

41. entity a exchange its equipment for the equipment owned by entity b. if the exchange has commercial substance Entity a should measure the equipment received from entity b on initial recognition at

a. The fair value of the equipment received.

b. The fair value of the equipment given up.

c. The carrying amount of the equipment received.

d. The carrying amount of the equipment given up.

42. This refers to financial statements that are intended to meet the needs of users who are not in a position to require an entity to prepare reports tailored to their particular information needs.

a. All purpose financial statements

b. general purpose financial statements

c. managerial reports

d. unisex financial statements

43. Andrix Domingo's Sari-sari store has a sign that reads your credit is good but I need cash. What type of risk is Mr. Andrix trying to avoid by putting up that sign?

a. Credit risk

b. market risk

c. liquidity risk

d. store risk

44. which of the following is added to the cost of inventories?

a. cost of wasted material due to production inefficiencies.

b. Import duties on shipping of inventory in wards

c. storage costs of finished goods

d. trade discounts received under purchase of inventory

45. information has this quality when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their past evaluations.

a. predictive value

b. reliability

c. relevance

d. understandability