1. The following items required consideration in preparing the financial statements:

On Jan. 1, 2019, the corporation made a loan of P120,000 to an emploiee, payable on Apr. 30, 2020 with an interest of 2% per annum. On due date, she's expected to pay the loan and the total interest.

The corporation paid P90,000 for insurance in 2019 covering the year ending Aug. 31, 2020.

On Jan. 2, 2020, the corporation received rent from a tenant P40,000 covering the six months to Dec. 31, 2019.

What is the total amount to be included in the statement of financial position as at Dec. 31, 2019?

Receivables Payables

and and

Prepayments Accruals

a. P220,000 P 2,400

b. P222,400 zero

c. P102,400 zero

d. P162,400 P60,000

2. Which of the following statements about financial statements are correct?

I. In preparing a statement of cash flows, either the direct or the indirect method may be used. Both lead to the same figure for net cash from operating activities.

II. Loan notes can be classified as current or non-current liabilities.

III. Financial statements must disclose a corporation's total expense for depreciation, if material.

IV. A corporation must disclose by a note the details of all adjusting events effected in the financial statements.

a. I, II and III

b. II and IV

c. III and IV

d. All

3. Which of the following may appeal as separate in changes in equity?

I. Dividends on equity shale, paid during the period

II. Loss on sale of investments

III. Proceeds of an issue of ordinary shares

IV. Dividends proposed after the year end

a. I, III and IV only

b. I, II, and IV only

c. I and III only

d. All tour items

4. Which of the following items could appear in a statement of cashflows?

I. Proceeds of issue of shares

II. Proposed dividends

III. Irrecoverable debts written off

IV. Dividends received

a. I, II and III only

b. All

c. I and IV only

d. II and III only

5. In preparing the cash flows from operating activities section of a statement of cash flows (using the indirect method), which of the following statements are correct?

I. Loss on sale of operating non-current assets should be deducted from profit before tax.

II. Increase in inventory should be deducted from operating profits.

III. Increase in payables should be added to operating profits.

IV. Depreciation expense should be added to profit before tax.

a. I, II and III

b. I, II and IV

c. I, III and IV

d. II, III and IV