1.

The conceptual framework includes all of the following except:

A.Objective of financial reporting

B.Qualitative characteristics of accounting information

C.Elements of financial statements

D.Supplementary information

2.

Which statement relates to verifiabilityjQuery22408611582799451896_1614833546311

A.Enables users to identify and understand similarities in, and difference among, items.

B.Information is available to decision-makers in time to be capable of influencing their decisions.

C.Different knowledgeable and independent observers could reach consensus, although not necessarily complete the agreement, that a particular depiction is a faithful representation.

D.Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyze the information with diligence.

3.

Accounting has been given various definition, which of the following is not one of those definitions?

A.Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

B.Accounting is an art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part of at least, of a financial character and interpreting the result thereof.

C.Accounting is a systematic process of objectively obtaining and evaluating events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.

D.Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of information

4.

Which is not a specific purpose of the conceptual framework?

A.To assist preparers of financial statement in applying the accounting standards.

B.To assist FRSC in the development of future Philippine Financial Reporting Standards (PFRSs) and in its review of existing PFRSs.

C.To assist users of financial statements in interpreting the information contained in financial statements.

D.To assist the Board of Accountancy in promulgating rules and regulations affecting the practice of accountancy in the Philippines.

5.

Which statements is false concerning users and their information needs?

A.Lenders are interest in information that enables them to determine whether their loans and the interest on these loans will be paid when due.

B.The providers of risk capital and their advisers are concerned with the risk of inherent in return provided by their investment.

C.Government and its agencies have an interest in information about the continuance of an enterprise especially when they have long-term involvement or are dependent on the enterprise.

D.Employees and their representative groups are interest in information about the stability and profitability of the entity.

6.

Which of the following items is not presented under the equity section of the statement of financial position?

A.Share dividend payable/distributable.

B.Share appreciation rights payable.

C.Share options outstanding.

D.Share warrants outstanding.

7.

Under PAS 1, an entity shall present a complete set of financial statements?

A.Including comparative information at least annually.

B.At least annually, with or without comparative information.

C.On as-needed basis, with or without comparative information.

D.At least every three years when there are limited users

8.

The presentation of comparative financial statements is

A.Encouraged by PFRS.

B.Required by PFRS.

C.Not required by PFRS but permitted due to industry standards.

D.A violation of PFRS.

9.

Financial statements are a structured representation of the financial position and financial performance of an entity. The objective of general-purpose financial statements is to provide information about an entity's (choose the incorrect statement)

A.Financial Position

B.Cash flows

C.Valuation

D.Financial Performance

10.

One element of the objective of financial reporting is to provide.

A.Information about the investors in the business entity

B.Information about the liquidation value of the resources held by the entity.

C.Information that is useful in assessing cash flow prospects

D.Information that will attract new investors

11.

Which of the following adjusting entries may not require reversing entry?

A.Accrued income.

B.Accrued expense.

C.Prepaid expense using the expense method.

D.Deferred income using the liability method

12.

An accrued expense can best be described as an amount.

A.Paid and currently matched with earnings.

B.Paid and not currently matched with earnings.

C.Not paid and not currently matched with earnings.

D.Not paid and currently matched with earnings

13.

An unearned income can best be described as an amount.

A.Collected and currently matched with expenses.

B.Not collected and currently matched with expenses.

C.Not collected and not currently matched with expenses.

D.Collected and not currently matched with expenses.

14.

The normal balance of an account is on the

A.Debit side of the account.

B.Credit side of the account.

C.Side represented by the increase in the account balance.

D.Side represented by the decrease in the account balance.

15.

The trial balance will be out of balance if?

A.P1,000 cash drawing by the owner is debited to Owner's Drawing for P10,000 and credited to Cash for P1,000.

B.The purchase of supplies on account is debited to Supplies and credited to Cash.

C.A P4,500 payment on account is debited to Accounts Payable for P450 and credited to Cash for P450.

D.A correct journal entry is posted twice.

16.

The cash flow statement does NOT include.

A.Cash inflows from the collection of receivables.

B.Cash outflows paid toward raw material purchases.

C.All sales revenues.

D.Interest paid and received

17.

Which of the following refers to those activities whereby cash is obtained or repaid to owners and creditors?

A.Investing

B.Operating

C.Financing

D.Borrowing

18.

A statement of cash flows is intended to help users of financial statements.

A.Evaluate a firm's liquidity, solvency, and financial flexibility.

B.Evaluate a firm's economic resources and obligations.

C.Determine a firm's components of income from operations.

D.Determine whether insiders have sold or purchased the firm's stock

19.

The primary purpose of the statement of cash flows is to

A.Distinguish between debits and credits to the cash account.

B.Provide information about the cash available at a particular time.

C.Provide information about the cash receipts and cash payments of an entity during a period.

D.Provide an analysis of the different cash accounts.

20.

Which is not added to net income under the indirect method of preparing the statement of cash flows?

A.Increase in an accrued liability.

B.Amortization of discount on bond payable.

C.Loss on sale of patent.

D.Increase in deferred tax asset.