1.If the investor ceases to have significant influence over an associate, how should the related investment be treated?Single choice.

(1 Point)

a. Investment should be treated at cost

b. It should still be treated using equity method.

c. It should be treated at fair value

d. Investment should be frozen at the date at which the investor ceases to have significant influence.

2.If an associate has outstanding cumulative preference shares held by outside interests, the investor computes a share in profit or loss:Single choice.

(1 Point)

a. Ignore the preference share dividends.

b. After adjusting for preference dividends which were actually paid to them during the year.

c. After adjusting for preference dividends only when they are declared.

d. After adjusting for preference dividends, regardless whether they are declared or not.

3Changes in the market value of equity investments at FVPL shall be:Single choice.

(1 Point)

a. Included in the determination of profit of the period in which they occur

b. Ignored

c. Shown as a prior period adjustment

d. Shown as deduction from or addition to shareholder's equity

4.The accounting method applied to investment in associates, known as the equity method, is also known as the:Single choice.

(1 Point)

a. Entity method of consolidation

b. Multiple line consolidation method

c. Proprietary method of consolidation

d. One-line consolidation method

5.On January 1, 2021, Adore Company bought equity investments irrevocably designated at fair value through other comprehensive income. By December 31, 2021, the cost and the market values of the securities are as follows:

Security X o Cost: 2,000,000 o Market Value: 2,400,000

Security Y o Cost: 3,000,000 o Market Value: 3,500,000

Security Z o Cost: 5,000,000 o Market Value: 4,900,000 By July 1, 2022, the entity sold Security X for P2,500,000. What amount should be recognized directly in retained earnings as a result of the sale in 2022?Single choice.

(1.5 Points)

a. 500,000

b. 400,000

c. 100,000

d. Zero

6.It is an entity over which the investor has significant influence.Single choice.

(1 Point)

a. Subsidiary

b. Venture capital organization

c. Associate

d. Mutual fund

7.Under PFRS 9, the classification of debt investments shall be made on the basis of:Single choice.

(1 Point)

a. Business model for managing the financial assets

b. Contractual cash flow characteristics of the financial asset

c. Management's intention of holding the debt instruments

d. Both the business model and the contractual cash flow characteristics of the financial asset

8.The following investments are provided to you: Asset 1: Equity investment measured at FVOCI through irrevocable designation Asset 2: Debt investment measured at FVOCI Asset 3: Debt investment measured at amortized cost Asset 4: Equity investment measured at FVPL Asset 5: Debt investment measured at FVPL Which of the following investments will be subject to impairment testing (loss allowance for expected credit losses)?Single choice.

(1 Point)

a. Assets 1, 2, and 3

b. Assets 2 and 3

c. Assets 1, 4, and 5

d. All of the assets can be subject to impairment.

9.Which of the following cannot be considered a financial asset?Single choice.

(1 Point)

a. Cash

b. An equity instrument issued by the entity

c. A contractual right to receive cash or another financial asset

d. A contractual right to exchange financial instruments with another entity under conditions which are potentially favorable

10.Under the equity method for investments in associates, the investor recognizes its share of the earnings in the period in which:Single choice.

(1 Point)

a. Investee declares a dividend

b. Investor sells the investment

c. Earnings are reported by the investee

d. Investee pays a dividend