1) The Conceptual Framework A. Is an accounting standard that defines standards for a particular measurement or disclosure issue. B. Is concerned with special purpose reports, for example, prospectuses and computations prepared for taxation purposes C. Applies to the financial statements of all commercial, industrial and business reporting enterprises, whether in the public or private sector. D. All of the above. 2) The occurrence that most likely would have no effect on net income is the A. Sale in the current year of an office building contributed by a shareholder in prior year. B. Collection in the current year of a dividend from an investment C. Correction of an error in the financial statements of prior period discovered subsequent to their issuance. D. Shares purchased deemed worthless in the current year. 3) All of the following components of other comprehensive income are reclassified subsequently to profit or loss, except A Unrealized gain on investment in bonds securities measured at fair value through OCI B. Gain from translating financial statements of a foreign operation C. Actuarial gain on projected benefit obligation D. Unrealized gain on futures contract designated of cash flow hedge 4) Which of the following items will affect the profit or loss for the period? A Dividends paid on redeemable preference share C. Remeasurement loss on defined benefit obligation B. Cash dividend received on investment in associate D. Cumulative effect on change in accounting policy 5) Which of the following is a non-current liability on December 31, 2021 statement of financial position? A. Bonds payable maturing on March 2022 which were refinanced in 2022 before issuance of the 2021 financial statements. B. Mortgage note payable due March 15, 2022, which was rolled over in 2022 after the issuance of the 2021 financial statements. C. Mortgage note payable due March 15, 2022, which was converted into shares of the company's ordinary share capital in 2022 before the issuance of 2021 financial statements. D. Mortgage note payable due March 15, 2022, in which the entity has the intention and discretion to roll over for a period of at least 24 months from the original maturity date. 6) If a dividend is declared after the balance sheet date but before the financial statement are authorized for issue the dividend is: A. Recognized as a liability at the balance sheet date. B. Not recognized as a liability at the balance sheet date. C. Recorded as a direct reduction of equity at the balance sheet date. D. Recorded as a reduction against the asset "cash" at the balance sheet date. 7) In accordance with the requirement of PAS 1 Presentation of Financial Statements, which one of the following statements is correct? A. The share of profit or loss of associate determined using the equity method must be included in other comprehensive income. B. Every item that appears in other comprehensive income will require a reclassification adjustment in future reporting periods when the item involved is derecognized. C. Reclassification adjustments relating to components of other comprehensive income must be disclosed. D. Retrospective adjustments arising from a change in accounting policy in accordance with PAS 8 Accounting Policies, Changes in Accounting Estimates and Errors must be included in other comprehensive income 8) The primary purpose of preparing a trial balance is to determine that A The ledger contains an equal peso amount of debit and credit entries. B. The ledger contains an equal number of debit and credit entries. C. The number of ledger accounts with debit balances is equal to the number of accounts with credit balances D. Each transaction was recorded with equal amounts of debits and credits. 9) Which of the following is correct regarding the classification of certain items in the statement of cash flows by a non-financial institution? Option 1 Option 2 1. Interest received Operating activities Investment activities II. Interest paid Operating activities Financial activities III. Dividends received Operating activities Investing activities IV. Dividends paid Financing activities Operating activities Al only B. I, II and III C. II, III, and IV D. All of these
