1.When does the cost of land affect an entity's profit or loss?

A.As the asset is used through periodic changes for cost allocation

B.When the asset is impaired or when it is sold above or below its carrying amount.

C.When the asset is revalued upwards

D.When the related revaluation is recognized on a piecemeal basis as the asset is used

2.Statement 1: An entity acquires debt instruments to be held under a "hold to collect and sell" business model. The entity shall classify the debt instrument either a fair value through other comprehensive income or fair value through profit or loss.

Statement 2: A financial asset held under a "hold to collect and sell" business model is classified under the amortized cost measurement category.

Select the correct response:

A.FALSE; TRUE

B.TRUE; FALSE

C.FALSE; FALSE

D.TRUE; TRUE

3.Statement I: Investment in ordinary shares can be classified as financial assets measured at amortized cost.

Statement II: ABC Co. changes its business model for managing financial assets during the period. Any reclassification entry is also made on the date the business model was changed.

A.FALSE, TRUE

B.TRUE, FALSE

C.FALSE, FALSE

D.TRUE, TRUE

4.Statement 1: Fold Co. receives a 2-year, noninterest-bearing note of P1,200,000 in exchange for the sale of an inventory item. If the customer had paid in cash at the sale date, the purchase price would have been P800,000. At initial recognition, Fold Co. records unearned interest of P400,000

Statement 2: Gather Co. receives a P1,000,000 note during the year. The note does not bear interest and is due in three years' time (lumpsum). The carrying amount of the note on initial recognition is equal to the present value of P1,000,000 discounted at an effective interest rate using PV of 1 and an 'n' of 3.

Select the correct response:

A.FALSE; TRUE

B.TRUE; FALSE

C.FALSE; FALSE

D.TRUE; TRUE

5.Bank reconciliations are normally prepared on a monthly basis to identify adjustments needed in the depositor's records and to identify bank errors. Adjustments should be recorded for

a. Outstanding checks and deposits in transit

b. All items, except bank errors, outstanding checks, and deposit in transit

c. Bank errors, outstanding checks, and deposit in transit

d. Book errors, bank errors, deposit in transit and outstanding checks

6.On December 1, 2017, ABC Company assigned P400,000 of accounts receivable to DEF Company as a security for a loan of P335,000. ABC Company charged a 2% commission on the amount of the loan; the interest rate on the note was 10%. During December, ABC collected P110,000 on assigned accounts after deducting P380 of discounts. ABC accepted returns worth P1,350 and wrote off assigned accounts totaling P2,980.

How much cash did ABC receive from DEF at the time of transfer?

A.Answer not given

B.P328,300

C.P301,500

D.P327,000

E.P335,000

7.On January 1, 2018, ABC Company has investment in equity designated as at FVOCI with a fair value of P600,000. These securities were acquired a year ago at a cost of P625,000. On March 31, 2018, ABC exchanged these securities for a piece of land from Mars Company. The carrying amount of the land in books of Mars Company was P480,000 and has a zonal value of P800,000. At the time of exchange, the shares, which was publicly listed, has a fair value of P650,000.

The necessary journal entry on March 31, will include a

A.Debit to financial asset at FVOCI, P600,000

B.Credit gain on exchange, P25,000

C.Answer not given

D.Debit to land, P650,000

E.Debit to loss on exchange, P25,000

8..

19. Statement I: Dividends received from investments in equity securities that were irrevocable elated on initial recognition to be subsequently measured at FVOCI are recognized in profit or loss

Statement II: When the financial asset measured at amortized costs are reclassified to the FVPL measurement category, the initial carrying amount of the Financial assets under the new classification is the reclassification date fair value on the financial assets.

Select the response:

A.TRUE, FALSE

B.TRUE,TRUE

C.FALSE, FALSE

D. FALSE, TRUE

9.ABC received from a customer a one-year, 375,000 note bearing annual interest of 8%. After holding the note for six months. ABC discounted the note at Super Bank at an effective interest rate of 10%.

If the discounting is treated as a borrowing, what amount of loss from discounting should ABC recognize?

A.Answer not given

B.20, 250

C.5,250

D.9,750

E.0

10.In which of the following instances is the capitalization borrowing costs under PAS 23 would most likely be suspended:

A.The construction of a building is discontinued because it is condemned by the government and the resumption of development is uncertain

B.Construction is temporarily stopped for the curing of concrete

C.Active development is stopped to give time for the engineers to reevaluate a design flaw

D.The construction of a bridge is disrupted by troubled waters