1. Which statement is correct regarding the conceptual framework for financial reporting?

a. is not a PFRS and hence does not define standards for any particular measurement or disclosure issue

b. serves as guide in developing PFRS

c. service is a guide in resolving accounting issues that are not addressed directly in existing PFRSs

d. prevails in cases where there is conflict with PRFSs

2. Which statement is incorrect concerning tax assets and liabilities?

a. Deferred tax assets and liabilities should be distinguished from current tax assets and liabilities

b. deferred tax assets and liabilities should not be discounted

c. when an entity makes a distinction between current and non current assets and liabilities it should classify deferred tax assets and liabilities as current

d. tax assets and liabilities should be represented separately from other assets and liabilities

3. an entity need not apply equity method to its investment in associate under which of the following

a. the entity is a parent that is exempted from preparing consolidated financial statements

b. when the investment meets the criteria to be classified as held for sale

c. when the investment is held by or is held indirectly through an entity that is a venture capital organization or a mutual fund unit trust and similar entities including investment linked insurance funds

d. in any of the choices

4. which of the following best describes past service cost under the defined benefit plan?

a. It is part of the service cost of a defined benefit plan of an entity

b. it is the increase in the present value of the defined benefit obligation arising from employee service in the current and prior period.

c. It is debited to an equity account to represent an expense arising from plan amendment

d. it is not present if the defined benefit plan of an entity has a surplus

5. a formula is used in a defined contribution plan to

a. compute the periodic contribution of the entity to the plan

b. define the precise amount of benefits the employee will receive in the future

c. required entity to shoulder the reinvestment risk of the plan

d. ensure that the plan is active and fully funded by the contributing entity

6. PRFS 2 applies to all share based payment transactions, whether or not the entity can identify specifically some or all of the goods or services received including

a. choice between equity settled and cash settled

b. equity settled share based payment transaction

c. all of the choices

d. equity settled share based payment transaction

7. an entity shall classify a non current asset or disposable as held for sale when

a. the carrying amount of the asset or disposable is recovered through continuing use

b. the noncurrent asset or disposable group is idle or retired from active use

c. the noncurrent asset or disposable group is abandoned

d. the carrying amount of the asset or disposable group is recovered through a sale transaction

8. a change in accounting policy show be made when

I. required by standard or an interpretation of the standard

II. the change will result in more relevant or reliable information about financial position, performance and cash flows

a. Both I and II

b. I only

c. II only

d. Neither I or II

9. It is an equity that is subordinate to all other classes of equity instruments 100% by residual interest Internet assets of an enterprise

a. ordinary shares

b. debt instruments

c. equity instrument

d. preference shares

10. non adjusting events after reporting period Are accounted for by

a. Not adjusting the amounts into financial statements without disclosure

b. disclosing in the notes if significant to the evaluation of the user

c. adjusting the amounts recognized in the financial statements

d. recognizing the events directly in equity

11. the basic and diluted earnings per share shall be presented in which part of the financial statements?

a. Together with the share capital line item of the balance sheet

b. in the statement that shows the income and expenses of an entity

c. in the operating activities part of this statement of cash flows

d. in the statement of changes in equity

12. an investment property measured under fair value model is the recognized under all of the following cases except

a. when it is sold to a third party

b. when no future economic benefits are expected from its disposal

c. when it is permanently withdrawn from use

d. when there is a significant drop in the fair value of the investment property

13. which of the following is correct in regards to PAS 34

a. only the income statement and the balance sheet is the required interim report

b. interim reports are prepared monthly as mandated by the standard

c. the entity are required to have a quarterly interim report

d. interim reports are not required

14. this means, "applying a new accounting policy to transactions other events and conditions as if that policy had always been applied."

a. prospective restatement

b. retrospective application

c. retrospective restatement

d. prospective application

15. The noncurrent asset held for sale shall be presented as

a. included in the line item of property plant and equipment

b. long term investments

c. noncurrent asset in the statement of comprehensive income

d. current asset in the balance sheet

16. which of the following is the usual classification of cash flow advances and loans made by banks

a. financing activity since it warrants our recognition of liability in the financial statement of the bank client

b. investing activities since banks are disbursing money for customers and they expect a return

c. financing activities since bank clients treat such cash as a financing need

d. operating activities since granting cash advances and loans are part of banks operations

17. which of the following is true regarding to an operating lease?

a. Lease liability account is credited in the books of the lessee

b. is depreciation of the underlying asset is debited in the books of the lessee

c. the lessor may classify the lease contract as a sale type lease and record a corresponding sales revenue

d. the lessor shall recognize a depreciation expense in relation to the underlying asset