1. If gross profit rate is based on sales then

A. Cost is less than 100%.

B. Cost is more than 100%.

C. Net sales is more than 100%.

D. Net sales is less than 100%.

2. According to PAS 16 Property, plant and equipment, which of the following is not an acceptable method of depreciation?

A. Depreciation based on usage.

B. Depreciation based on revenue.

C. Accelerated depreciation.

D. Depreciation based on time.

3. The grant in recognition of specific expenses shall be

A. Recognized as income shorter than the period of the related expenses.

B. Not be recognized as income.

C. Recognized as income over the period of the related expenses.

D. Recognized as income in excess of the period of the related expenses.

4.Foreign bank deposits that are subject to foreign exchange restrictions should

A. Form part of cash.

B. Be written off as a loss.

C. Be classified as non-current asset with adequate disclosure.

D. Be classified as current asset with adequate disclosure.

5. Which of the following is not specifically excluded from the purview of PAS 20?

A. Forgivable loan from the government.

B. Government grant covered by PAS 41 Agriculture.

C. Government participation in ownership of the entity.

D. Government assistance provided in the form of tax benefits.

6. Does PFRS 6 require an entity to recognize exploration and evaluation expenditure as asset?

A. Yes, but only to the extent such expenditure is recoverable in future periods.

B. Yes, but only to the extent technical feasibility and commercial viability.

C. Yes, but only to the extent required by the entity's accounting policy for recognizing exploration and evaluation assets.

D. No, such expenditure is always expensed in profit or loss as incurred.

7. What should happen when the financial statements of an associate are not prepared to the same date as the investor's accounts?

A. As long as the gap is not greater than three months, there is no problem.

B. Any major transactions between the date of the financial statements of the investor and that of the associate should be accounted for.

C. The financial statements of the associate prepared up to a different accounting period will be used as normal.

D. The associate should prepare financial statements for the use of the investor at the same date as those of the investor.

8. Which of the following statements is correct in accounting for the birth of a calf?

A. When a calf is born, a gain arising from change in fair value less cost to sell due to price change is recognized in profit or loss.

B. When a calf is born, a gain arising from change in fair value less cost to sell due to physical change is recognized in profit or loss.

C. When a calf is born, a gain arising from change in fair value less cost to sell due to physical change is recognized in other comprehensive income.

D. When a calf is born, a gain arising from change in fair value less cost to sell due to price change is recognized in other comprehensive income.

9. ABC Company factored accounts receivable without recourse to a bank. ABC Company received cash as a result of this transaction which is best described as

A. Bank loan collateralized by ABC Company's account receivable.

B. Bank loan to be repaid by the proceeds from ABC Company's accounts receivable.

C. Sale of ABC Company's accounts receivable to the bank with the risk of uncollectible accounts transferred to the bank.

D. Sale of ABC Company's accounts receivable to the bank with the risk of uncollectible accounts retained by the company.