DIRECTIONS: KINDLY ANSWER THE FF AND PROVIDE EXPLANATIONS SHOWING PROOF THAT YOU ANSWERED CORRECTLY. THANK YOU!

1.As per PAS 24 disclosure is required in financial statements of a company if there is possibility that entity's profit or loss or statement of financial position may have been affected by

2 points

The existence of related parties only

B. Transactions and outstanding balances with related parties only

C. Both the existence of related parties and transactions and outstanding balances with related parties only

2. An adjustment, to the carrying amount of a non-current asset that ceases to be classified as 'held for sale', is recorded in

2 points

A. Income from discontinued operations

B. Equity

C. Income from continuing operations

3.During the year, a customer had sued ABC for damages that he claims to have suffered as a direct result of the faulty goods supplied to him by ABC. At the year end, the litigation was in process and the Court had not reached a verdict. The Company's legal advisors suggested that the chance of an adverse opinion against ABC was very low as the contract with the customer explicitly states that the company shall not be liable to such claims. Consequently, no liability was recognized in the financial statements and neither was the contingency disclosed. On 28 August 2019, the court issued a verdict against ABC and ordered the payment of damages amounting P5 million to the claimant within 30 days. The CFO is of the view that the financial statements need not be adjusted because the obligation to pay damages to the customer arose after the year end upon the decision of the court. How should the liability for payment of damages be accounted for in the financial statements for the year ended 30 June 2019?

2 points

A. Adjust

B. Disclose

C. Ignore

D. Hindi ko talaga alam

4. For an asset to be held for sale,: 1. It must be available for immediate sale in its present condition 2. Its sale must be highly probable 3. The management must be committed to a plan to sell the asset 4. The management must have an active program to locate a buyer 5. The asset must be actively marketed for sale 6. The sale should be expected to be completed within one year from the date of classification 7. The asset should be fully depreciated

2 points

A. 1 to 6 only

B. 1 to 4 only

C. 1 to 5 only

D. 1 to 7 all

5. Which of the following is not an objective of PAS 10?

2 points

A. To prescribe when an entity should adjust its financial statements for events after the reporting period

B. To prescribe how an entity should distinguish favorable events from unfavorable

C. To prescribe the disclosures that an entity should give about the date when the financial statements were authorized for issue and about events after the reporting period

D. To require an entity should not prepare its financial statement on a going concern basis if events after the reporting period indicate the going concern assumption is not appropriate

6. Which of the following can likely be exempted from the existence of related party relationship?

2 points

A. Trade unions

B. Public utilities

C. Government departments and agencies

D. Two ventures that simply share joint control over a joint venture

E. Providers of finance (such as a lending bank or a bondholder)

F. Customers, suppliers, franchisors, distributors or other agents with whom the entity transacts a significant volume of business.

G. All of the above.

7. You announce plans to reorganize your group, between the year end, and the date when the financial statements are approved for issue. The plans include the disposal of a major division. You need to:

2 points

A. Ignore

B. Leave it, but note the details

C. Adjust the FS

D. No no no