1.) The imputed rate of interest is

a. the prevailing rate for a similar instrument of an issuer with a similar credit rating.

b. a rate if interest that discounts the face (nominal) amount of the receivable to the current cash sales price of goods or services.

c. the more clearly determinable of either a or b

d. none of these

2.) Total interest income recognized over the life of a noninterest-bearing note is

a. zero

b. greater than the total interest received on the note.

c.less than the total interest received on the not

d. equal to the unearned interest income on initial recognition

3.) The present value of debt instrument is computed by

a. multiplying the future cash flows from the note by an appropriate present value factor

b. adding the future cash flows

c. adding the future cash flows from the principal to the sum of the periodic interests receivable

d. dividing the future cash flows from the note by appropriate present value of factor

4.)The none concept of time value of money

a. is irrelevant in financial reporting

b. states that money loses its value over time because of inflation

c.provides that contractual agreements to receive cash or to pay cash in the future will earn or incur interests due to passage of times regardless of whether interests have been agreed upon or not

d. is a pervasive concept which affects only financial reporting but not managerial accounting.

5.) How are direct loan origination costs and origination fees accounted for in relation to the carrying amount of a loan receivable?

Direct origination costs origination fees

a. deducted added

b. added deducted

c. added no effect

d. deducted no effect

6.) A receivable is credit-impaired if

a. a loss event has occurred that is detrimental to the entity's ability to collect the contractual cash flows from the receivable

b. its recoverable amount exceeds its carrying amount.

c. there is delay in the periodic payments on the receivable

d. its fair value is less than its carrying amount.

7.) Before impairment, the carrying amount of a credit-impaired loan or note receivables under 'stage 3' of the general approach to impairment

a. is equal to the unpaid principal

b. is equal to the unpaid principal plus any recorded accrued interest payable.

c. excludes any accrued interest receivable

d. less than the present value of the notes receivable.

8.)Impairment loss on a credit- impaired receivable (but not purchased or originated credit-impaired) may be computed as

a.the excess of the present value of the remaining future cash flows from the receivable over its carrying amount.

b. the excess of its carrying amount over the present value of the remaining future cash flows from the receivables.

c. the deficiency of the carrying amount computed to the present value of the remaining future cash flows from the receivable

d. the difference between the remaining future cash flows and the carrying amount of the receivable.

9.) After 'Stage 3' impairment, interest income is

a. computed by multiplying the original effective interest rate by the present value of the impaired receivable

b. computed by multiplying the current interest rate by the present value of the impaired receivable

c. computed by multiplying the more clearly determinable between the original effective interest rate and the current interest rate by the present value of the impaired receivable.

d. not computed anymore

9.) Under the expected credit loss model, impairment gain is

a. recognized in profit or loss

b. computed as the difference between the present value of the remaining future cash flows discounted at the current rate and the current carrying amount of the receivable

c. computed as the difference between the carrying amount of the receivable had there been no previous impairment and the current carrying amount of the receivable

d. is recognized in profit or loss.

10.)According to PFRS 9, impairment gain

a. should result to carrying amount of financial asset in excess of its carrying amount assuming no impairment loss had been recognized previously

b. should result to carrying amount of financial asset in excess of its new recoverable amount.

c. is amortized over the remaining term of the receivable

d. is recognized in profit or loss

11.) Financial assets are derecognized when

a. the entity becomes party to the contractual provisions of the instruments

b. the contractual rights cash flows from the financial asset expire

c. the financial assets are transferred and the transfer qualifies for derecognition.

d. b or c

12.) This transfer of financial asset does not result to dereocognition.

a. The transferred asset has been isolated from the transferor (put beyond reach of the transferor and its creditors).

b. The transferee has obtained the right to pledge or exchange either the transferred asset or beneficial interest in the transferred asset.

c. The transferor is obliged to repurchase the transferred financial asset.

d. The transferor does not maintain effective control over the transferred assets through an agreement to repurchase or redeem them before their maturity.

13.)Transfers of receivable may either be treated as sale or secured borrowing, which of the following transfers of receivables if treated as a secured borrowing?

a. A receivables is factored under a "non-recourse" basis.

b. A receivable is discounted with a bank under a "non-recourse" basis.

c. A receivable is discounted with a bank and the "note receivable-discounted" account was credited.

d. A receivable is discounted with a bank and the "loan payable" account was credited.

14.) Offestting of financial asset and financial liabilities is permitted only when

a. the entity has legal right offset

b. the entity has an intention to settle the financial instruments on a net basis.

c. a and b

d. a or b

15.) Pledge transactions

a. are disclosed only.

b. are accounted for by segregating the pledged receivables from the other receivables through a journal entry.

c. need not be disclosed if the relate loan does not requires any collateral security

d. a and b

16.) Assignments of receivables

a. are disclosed only

b. are recognized by debiting "Accounts receivable assigned" and crediting "Accounts receivable."

c. give rise to receivables from factor.

d. b and d

17.) Factoring made on a without recourse basis

a. is prohibited

b. is an outright sale.

c. results to recognition of a recourse obligation.

d. requires an equity disclosure.

18.)When an entity discounts a note receivable received from a customer, the net proceeds from the note discounting is computed

a. by multiplying the maturity value by the discount rate and discount period.

b. as the difference between the sum of accrued interest income and face amount of the note discounted and the cash received

c. multiplying the face amount of the note by the interest rate and the expired term of the note.

d. as the difference between the maturity value of the note and the discount.

19.) Which of the following statements is true?

a. Method of estimating bad debts based on the collectability of accounts receivable emphasize the income statement rather than the statement of financial position.

b. the sole justification for recognizing doubtful accounts is matching.

c. Trade accounts receivable are the only assets on which bad debt expense can be incurred

d. The "loss allowance" account is similar to accounts such as "Allowance for bad debts". "allowance for probable losses" Allowance for impairment losses," and the like.

20.) if Accounts receivable are said to have been hypothecated, this means that the accounts receivable were

a.pledged

b.assigned

c.factored

d.discounted

21.) When specific accounts receivables are used as collateral security for borrowings, the accounts receivables are

a.pledged

b.assigned

c.factored

d.discounted

22.) This involves the outright sale of receivables to a financing institution known as a factor.

a. pledging

b. assignment

c . factoring

d. selling