1)Which is the accounting standard setting body in the Philippines at the present time?

A.

Accounting Standard Council

C.

Philippine Accounting Standards Board

B.

Auditing and Assurance Standard Council

D.

Financial Reporting Standards Council

2)Which of the following terms best describes the removal of an asset from an entity's statement of financial position?

A.

Derecognition

B.

Impairment

C.

Write-off

D.

Depreciation

3)Which of the following is not within the scope of the Conceptual Framework?

A.the objective of financial reporting

B.the quantitative characteristics of useful financial information

C.the definition, recognition and measurement of the elements from which financial statements are constructed

D.concepts of capital and capital maintenance.

4)Which of the following statements is not true?

A.Accounting assumptions are the basic notions or fundamental premises on which the accounting process is based.

B.Accrual used to be an underlying assumption in the old framework

C.Going concern is the sole underlying assumption in the new framework.

D.The use of historical cost is not supported by going concern assumption.

5)The following statements are true except,

A.General purpose financial statements are based on estimates and judgments rather than exact depictions.

B.General purpose financial reports are not designed to show the value of an entity.

C.The target users of general purpose financial reports are investors, creditors and lenders.

D.General purpose financial reports all the information needed by existing and potential investors, lenders and other creditors needed.

6)Historical cost

A.The amount of cash or cash equivalent paid or the consideration to acquire an asset.

B.The amount of cash or cash equivalent that would have to be paid of the same or an equivalent asset is acquired currently.

C.The amount of cash and cash equivalent that could currently be obtained by selling the asset in an orderly disposal.

D.The discounted value of the future net cash inflow that an asset is expected to generate I the normal course of business.

7)Under this concept, capital is regarded as the net assets or equity of the enterprise

A.

Financial concept

C.

All-financial resources concept

B.

Physical concept

D.

All-inclusive concept

8)"Recognition" is defined in the Conceptual Framework as

A.The grouping, into broad classes, of the financial effects of transactions and other events according to economic characteristics.

B.The process of determining the monetary amounts at which the elements of the financial statements are to be recognized and carried in the balance sheet and income statement.

C.The removal of a previously recognized asset or liability from an entity's statement of financial position.

D.The process of incorporation in the balance sheet or income statement an item that meets the definition of an elements and satisfies the criteria for recognition.

9)Which statements is false concerning users and their information needs?

A.Lenders are interest in information that enables them to determine whether their loans and the interest on these loans will be paid when due.

B.The providers of risk capital and their advisers are concerned with the risk of inherent in return provided by their investment,

C.Government and its agencies have an interest in information about the continuance of an enterprise especially when they have long-term involvement or are dependent on the enterprise.

D.Employees and their representative groups are interest in information about the stability and profitability of the entity.

10)Which of the following statement(s) regarding the conceptual framework is (are) incorrect?

A.The framework applies to financial statements of business reporting enterprises both in the private sector and in the public sector.

B.In cases where there is conflict between the framework and PFRS, the requirement of the framework will prevail.

C.Both A and B

D.Neither A nor B

11)Which is not a specific purpose of the conceptual framework?

A.To assist preparers of financial statement in applying the accounting standards.

B.To assist FRSC in the development of future Philippine Financial Reporting Standards (PFRSs) and in its review of existing PFRSs.

C.To assist users of financial statements in interpreting the information contained in financial statements.

D.To assist the Board of Accountancy in promulgating rules and regulations affecting the practice of accountancy in the Philippines.

12)What is the basic purpose of accounting?

A.To provide quantitative financial information about economic activities.

B.To provide all information that users need in making economic decisions.

C.To provide qualitative financial information about economic activities intended to be useful in making economic decisions.

D.To provide quantitative financial information about economic activities intended to be useful in making economic decisions.

13)To meet the probability criterion, in relation to recognition of assets and liabilities, the expectation that future economic benefits will flow to or from an entity must be

A.

Certain

B.

Virtually certain

C.

Sufficiently certain

D.

Not certain

14)General purpose financial statements are

A.Those statements that cater to the common and specific needs of an wide range of external users.

B.Those statements that cater to the common needs of a wide range of external users and internal users.

C.Those statements that cater to the common needs of a limited range of external users.

D.Those statements that cater to the common needs of a wide range of external users.

15)Accounting has been given various definition, which of the following is not one of those definitions?

A.Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

B.Accounting is an art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part of at least, of a financial character and interpreting the result thereof

C.Accounting is a systematic process of objectively obtaining and evaluating events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.

D.Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of information.

16)The users of financial statements who are interest in information that enables them to determine whether the amounts owing to them will be paid when due

A.

Lenders

C.

Investors

B.

Customers

D.

Suppliers and other trade creditors

17)The Conceptual Framework includes all of the following except:

A.

Objective of financial reporting

C.

Elements of financial statements

B.

Qualitative characteristics of accounting information

D.

Supplementary information

18)Which statement is incorrect regarding the Conceptual Framework?

A.The objective of general-purpose financial reporting is the foundation of the Conceptual Framework?

B.The conceptual Framework is useful to auditors by assisting them in forming an opinion as to whether financial statements conform to PFRSs.

C.The Conceptual Framework may override a specific PFRS.

D.The conceptual framework includes a cost-benefit constraint, which means that the benefits of the information must be greater than the costs of providing it.

19)Which statement relates to verifiability?

A.Enables users to identify and understand similarities in, and difference among, items.

B.Information is available to decision-makers in time to be capable of influencing their decisions.

C.Different knowledgeable and independent observers could reach consensus, although not necessarily completeagreement, that a particular depiction is a faithful representation.

D.Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyze the information with diligence.

20)It is the accounting process of assigning numbers, commonly in monetary terms, to the economic transactions and events.

A.

Analyzing

B.

Measuring

C.

Classifying

D.

interpreting

21)When should an item that meets the definition of an element be recognized, according to the Framework?

A.When it is probable that any future economic benefit associated with the item will flow to or from the entity.

B.When the element has a cost or value that can be measured with reliability.

C.When the entity obtains control of the right or obligations associated with the item.

D.When it is probable that any future economic benefits associated with the item will flow to or from the entity and the item has ac sot or value that can be measured with reliability.

22)What is the only underlying assumption mentioned in the new Conceptual Framework for Financial Reporting?

A.

Going concern

B.

Time period

C.

Accounting entity

D.

Monetary unit

23)Which statement relates to comparability?

A.Information is available to decision-makers in time to be capable of influencing their decisions.

B.Different knowledgeable and independent observers could reach consensus, although not necessarily completeagreement, that a particular depiction is a faith representation.

C.Financial reports are prepared for users who have a reasonable knowledge of business and economic activities and who review and analyze the information with diligence.

D.Enable users to identify and understand similarities in, and differences amount items.

24)The enhancing qualitative characteristics of financial information are

A.Comparability and understandability

B.Verifiability and timeliness

C.Comparability, understandability and verifiability

D.Comparability, understandability, verifiability and timeliness

25)Accounting information is considered to be relevant when it

A.Can be depended on to represent the economic conditions and events that it is intended to represent.

B.Is capable of making a difference in a decision.

C.In understandable by reasonably informed users of accounting information,

D.Is verifiable and neutral.

26)The "Primary users" of financial information include

I

Existing and potential investors

II

Existing and potential lenders and other creditors

III

User group such as employees, customers, government and their agencies, and public

A.

I only

B.

I and II only

C.

I and III only

D.

I, II and III

27)The ingredients of faithful representation are

A.

Completeness and neutrality

C.

Completeness, neutrality and free from errors

B.

Completeness and free from errors

D.

Completeness, neutrality, free from error and conservatism

28)Which is not a financial asset?

A.

Cash

B.

Equity investment

C.

Inventory

D.

Receivables

29)Physical concept of capital required the use of

A.

Historical cost

B.

Realizable value

C.

Current cost

D.

Present value

30)Which of the following does not interact with both relevance and faithful representation to contribute to the usefulness of information?

A.

Neutrality

B.

Timeliness

C.

Understandability

D.

Comparability