1. Unrealized gains and losses on Fair Value Through Profit or Loss are*

a. Disregarded

b. Included in the determination of income

c. Included in equity

d. Included in income for unrealized losses and included in equity for unrealized gains.

2. Which one of the following that is merely drawn and recorded but not given to the payee before the end of reporting period.*

a. Postdated check

b. Compensating balance

c. Undelivered check

d. Deposit in transit

3. An investor uses the equity method to account for investment in associate. The purchase price implies a fair value of the investee's depreciable assets in excess of the investee's net assets carrying values. The amortization of the excess

a. decreases the investment account

b. decreases the goodwill account

c. increases the investment income account

d. does not affect the carrying amount of the investment

4. Financial liabilities include all of the following, except*

a. Trade accounts payable

b. Notes payable

c. Bonds payable

d. Deferred revenue

5. Which of the following is true with regard to the accounting policies related to interim financial statements?

A. The frequency of reporting (annually, semi-annually, or quarterly) should not affect the measurement of the annual results.

B. Accounting policy changes cannot be made if they are to be reflected in the next annual accounts.

C. Both A and B

D. None of the above

6. In accordance with generally accepted accounting principles, which of the following methods of amortization is normally recommended for intangible assets?*

a. Sum-of-the-years'-digits

b. Straight-line

c. Group composite

d. Double-declining-balance

7. Statement 1 - If preference shares are cumulative and no dividends are declared, the company subtracts the current year preference dividend in computing earnings per share. Statement 2 - When share dividends or share splits occur, companies must restate the shares outstanding after the share dividend or split, in order to compute the weighted-average number of shares.

a. Both statements are true.

b. Both statements are false.

c. The 1st statement is true, the 2nd statement is false.

d. The 1st statement is false, the 2nd statement is true.

8. An asset shall be classified as current when it satisfies any of the following criteria, except*

a. It is expected to be realized, or intended for sale or consumption in the normal course of the entity's normal operating cycle.

b. It is expected to be realized within twelve months form the balance sheet date.

c. It is cash or cash equivalent asset, which is restricted for the purchase of an asset with in 12 months from the balance sheet date.

d. It is held primarily for the purpose of being traded

9. For an entity that has only ordinary shares outstanding, total shareholders' equity divided by the number of shares outstanding represents the*

a. Return on equity

b. Book value per share

c. Stated value per share

d. Price-earnings ratio

10. Which statement is incorrect concerning the elements directly related to the measurement of performance?*

a. Gains represent other items that meet the definition of income and do not arise in the course of ordinary regular activities.

b. Losses represent other items that meet the definition of expenses and do not arise in the course of ordinary regular activities.

c. The definition of expenses encompasses losses as well as those expenses that arise in the course of ordinary regular activities.

d. The definition of revenue encompasses both income and gains.

11. Which one of the following is a practice of opening the books of accounts beyond the close of the reporting period for the purpose of showing a better financial position and performance?*

a. Compensating balance

b. Window dressing

c. Bank overdraft

d. None of these

12. Which statement is true concerning the Conceptual Framework for Financial Reporting?*

a. The Conceptual Framework is a reporting standard and defines standard for any particular measurement or disclosure issue.

b. The Conceptual Framework is concerned with general purpose financial statements including consolidated financial statements.

c. In case of conflict, the requirements of the Conceptual Framework prevail over those of the relevant PFRS.

d. All of these statements are true.

13. Which valuation allowance is not a proper deduction from trade accounts receivable in arriving at estimated realizable value?*

a. Allowance for doubtful accounts

b. Allowance for sales returns and allowances

c. Allowance for unrealized losses

d. Allowance for freight charge

14. What is the authoritative status of the framework?*

a. The framework has the highest level of authority.

b. In the absence of a standard or an interpretation that specifically applies to a transaction, the framework should be followed.

c. In the absence of a standard or an interpretation that specifically applies to a transaction, management should consider the applicability of the framework in developing and applying an accounting policy that results in information that is relevant and reliable.

d. The framework applies only when the FRSC develops a new or revised standard.

15. Which of the following is not a method of disclosing pertinent information?*

a. Supporting schedule

b. Parenthetical explanation

c. Cross reference and contra item

d. All of these are methods of disclosing pertinent information

16. If the fair value less cost to sell is lower than the carrying amount of a noncurrent asset classified as held for sale, the difference is*

a. Not accounted for

b. Charged to depreciation

c. Accounted for as an impairment loss.

d. Debited to retained earnings

17. The cross-reference between each line item in the financial statements and any related information disclosed in the notes to the financial statements.*

a. Is voluntary

b. Is mandatory

c. Depends on the industry

d. Is either voluntary or mandatory

18. Biological transformation comprises the processes of growth, degeneration, production, and procreation that cause qualitative or quantitative changes in a biological asset. It may result in different type of outcomes except which of the following?

A. Production of agricultural produce such as sugar, wine and tea.

B. Increase in quantity or improvement in quality of an animal or plant.

C. Decrease in the quantity or deterioration in quality of an animal or plant.

D. Creation of additional living animals or plants.

19. Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principle of PFRS 8, Operating Segments - the segments have similar economic characteristics, and the segments are similar in each of the following respects: I. the nature of the products and services II. the nature of the production processes III. the type or class of customer for their products and services IV. the methods used to distribute their products or provide their services V. composition of board of directors

A. I and II only

B. I, II and III only

C. I, II, III and IV only

D. All of the above.

20. If David determines that 40% of Florial employees have accumulating annual leave, what must David determine to account for the unused leave?

A. He must determine if the leave has been taxed as income for the employee.

B. He must list the leave as a cost on the balance sheet.

C. He must determine if the leave is vesting or non-vesting.

D. He must determine how much of the leave will be used in the current year