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1. The following statements are false relating to the conceptual framework,except:I. The conceptual framework is not a reporting standard and therefor

does not de ne standard for any particular measurement or disclosureissue.

II. The conceptual framework is concerned with general purpose nancialstatements including consolidated nancial statements.

III. In case of con ict, the requirements of the conceptual frameworkpre ail o er those of the rele ant !"#$.

a. I and II only%. I and III onlyc. II and III onlyd. I, II and III

&. 'hich of the following statements %est descri%es the date of transition to!"#$ for $()s*

a. The %eginning of the latest period presented in the entity+s mostrecent annual nancial statements under pre ious accountingframework.

%. The end of the latest period presented in the entity+s most recentannual nancial statements under pre ious accounting framework.

c. The beginning of the earliest period for which an entitypresents full comparative information under PFRS for SMEs inits rst nancial statements that conforms with PFRS forSMEs.

d. The end of the earliest for which an entity presents full comparati einformation under !"#$ for $()s in its rst nancial statements thatconform with !"#$ for $()s.

. In cost accounting, the term rele ant range refers to the range o er whichthe

a. #ele ant cost are incurredb. !ost relationships are validc. -ost may uctuated. !roduction may ary

. -ompared to its cash %asis net income for the current year, an entity+saccrual %asis net income increased when it

a. /eclared di idend in the prior year that it paid in the current year.b. "ad lower accrued e#pense on $ecember %& of the current

year than on 'anuary &.c. $old used equipment for cash at a gain in the current year.d. 'rote o0 more accounts recei a%le than it reported as uncollecti%le

accounts expense in the current year.. 'hat is the classi cation of exploration and e aluation asset in the statement

of nancial position*a. Tangi%le asset only%. Intangi%le asset onlyc. Either tangible or intangible assetd. 2either tangi%le or intangi%le asset

3. These are transactions in which the entity acquires goods or ser ices %yincurring lia%ilities to the supplier of those goods or ser ices for amounts thatare %ased on the price of the entity+s shares and other equity instruments.

a. )quity transactions%. -ash payment transactionsc. )quity4settled share4%ased payment transactionsd. !ash(settled share(based payment transactions

5. 'hich of the following cash ows does not appear in a statement of cashows using indirect method*

a. 2et cash ow from operating acti itiesb. !ash received from customersc. -ash in ow from sale of equipmentd. -ash out ow from di idend payment

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6. 7n entity uses a periodic in entory system. If the company+s %eginningin entory in the current year is o erstated, and that is the only error in thecurrent year, then the company+s income for the year will %e

a. )nderstated and assets correctly stated.%. 8nderstated and assets o erstated.c. 9 erstated and assets o erstated.d. 8nderstated and assets understated.

. 'hich of following are required disclosures in relation to %orrowing costI. 7mount of %orrowing cost capitali;ed during the period.II. 7ggregation of assets that are qualifying assets with other assets in

the statement of nancial position with disclosure in the notes tonancial statements.

III. -apitali;ation rate used to determine the amount of %orrowing costeligi%le for capitali;ation.

a. I and II onlyb. I and III onlyc. II and III onlyd. I, II, and III

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d. II and III only1 .'hich type of expenditure is=are included in the term @exploration and

e aluationA of mineral resources*I. The extraction and processing of mineral for transport to market.II. The commercial re iew of possi%le areas for mineral extraction %efore

%idding for legal rights to explore a speci c area.a. I only%. II onlyc. )ither I or IId. ,either I nor II

13.The following are %asic purposes of the conceptual framework, except:a. To assist "#$- in de eloping accounting standards that represents

B77! in the !hilippines.%. To assist "#$- in re iewing and adopting existing international

accounting standards.c. To promulgate rules and regulations a-ecting the practice of

the accountancy profession.d. To assist auditors in forming an opinion as to whether nancial

statements conform with accounting standards.15.16.'hat depreciation method is most appropriate for the signi cant part of an

aircraft*a. $traight line method for all parts of the aircraft.b. Production method based on air miles own for the /et engine0

and straight line method for all other parts of the aircraft.c. !roduction method %ased on air miles own for all parts of the aircraft.d. /iminishing %alance method for all parts of the aircraft.

1 .7n out ow of resources em%odying future economic %ene ts is regarded aspro%a%le when

a. The event is more li1ely than not to occur.%. The pro%a%ility that the e ent will not occur is greater than the

pro%a%ility that the e ent will occur.c. The pro%a%ility that the e ent will occur is the same as the pro%a%ility

that the e ent will not occur.d. The pro%a%ility that the e ent will occur is

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d. ,either I nor II& .The following are o%Decti es of 2B7$, except

a. To simplify go ernment accounting towards e entual computeri;ation.%. To conform with I"#$.c. To provide error free nancial statements.d. To ser e as tool for manages and executi es in e0ecti e and eEcient

monitoring of go ernment agency performance.& .7 direct la%or o ertime premium should %e charged to a speci c Do% when the

o ertime is caused %ya. Increased o erall le el of acti ity.b. !ustomer2s re+uirement for early completion of /ob.c. (anagement+s failure to include the Do% in the production schedule.d. (anagement+s requirement that the Do% %e completed %efore the

annual factory acation closure.& .It is an e ent that creates a legal or constructi e o%ligation %ecause that

entity has no longer realistic alternati e %ut to settle the o%ligationa. 7dDusting e entb. 3bligating eventc. -ontingent e entd. 2onadDusting e ent

&3.The /ecem%er 1, &

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1.'hich of the following is not an underlying assumption of nancialstatements*

a. *ccrual%. Boing concernc. Time periodd. 7ccounting entity

&.The following are not the function of >ureau of Treasury, excepta. #esponsi%le for design, preparation and appro al of accounting

systems of go ernment agencies.%. #esponsi%le for the formulation and implementation of 2ational

>udget.c. #esponsi%le for monitoring the control appropriation and allotments.d. Responsible for maintaining accounts of nancial transactions

of all government agencies..'hich of the following is true in relation to rele ance*I. #ele ant nancial information is capa%le of making di0erence in the

decision of the users.II. "inancial information is capa%le of making decisions if it has predicti e

alue.a. I only%. II onlyc. 5oth I and IId. 2either I nor II

.7n $() must recogni;e a go ernment grant that imposes speci ed futureperformance conditions

a. In income when the grant proceeds are recei a%le.%. In income o er the period necessary to match it with the related cost

for which it is intended.c. In income only when all performance conditions are met.d. 2one of the choices.

.2ote recei a%les discounted with recourse should %ea. Included in total recei a%les with disclosure of contingent lia%ility%. Included in total recei a%les without disclosure of contingent lia%ilityc. E#cluded from total receivables with disclosure of contingent

liabilityd. )xcluded from total recei a%les without disclosure of contingent

lia%ility3.'hat are the ingredients of a perfect faithful representation*

a. -ompleteness and neutrality%. -ompleteness, free from error and su%stance o er formc. !ompleteness0 free from error and neutralityd. -ompleteness, neutrality, free from error and prudence

5.7n entity adDusted its historical cost income statement %y applying speci cprice index to its depreciation and cost of goods sold. The entity+s adDustedincome statement is prepared according to

a. "air alue accounting%. !urchasing power accountingc. !urrent cost accountingd. 2ominal peso accounting

6.7 nonpu%licly accounta%le entity must make an explicit and unreser edstatements of compliance with the !"#$ for $()s

a. If the entity complies with all the re+uirements of PFRS forSMEs.

%. If the entity complies with the ast maDority of the requirements of the!"#$ for $()s.

c. If the entity complies the national B77! %ased on !"#$ for $()s withsome speci c di0erences.

d. If the entity complies with full !"#$..7morti;ation of intangi%le assets with a nite life shall commence when

a. It is rst recogni;ed as asset.b. It is ready for use.

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c. It is pro%a%le that it will generate future economic %ene ts.d. The cost can %e measured relia%ly.

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a. *vailable for and remeasured at fair value and the di-erencebetween fair value and carrying amount shall be accounted foras component of other comprehensive income.

%. 7 aila%le for and remeasured at fair alue and the di0erence %etweenfair alue and carrying amount shall %e accounted for as component ofpro t and loss.

c. Trading securities and remeasured at fair alue and the di0erence%etween fair alue and carrying amount shall %e included in pro t andloss.

d. 2onmarketa%le in estments and its carrying amount is the initial cost.6.It is the date on which the lessee is entitles to exercise its right to use the

leased asset.a. Inception of the leaseb. !ommencement of the leasec. /ate of lease agreementd. /ate of commitment to the pro ision of the lease

.The following are registries for allotments recei ed and o%ligations incurred,except

a. #egistry of allotments and o%ligation H personal ser ices%. #egistry of allotments and o%ligation H maintenance and other

operating expensec. Registry of allotments and obligation 6 capital e#pendituresd. #egistry of allotments and o%ligation H nancial expenses

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c. The measurement basis used in preparing nancial statementsand the accounting policies used that are relevant to anunderstanding of the nancial statements.

d. 7ll of the measurements %ases and the accounting policy choicesa aila%le to the entity speci ed in !"#$ irrespecti e of whether theywere used %y the entity in preparing the nancial statements.

.7dDusting e ents are e ents thata. Provide evidence of condition that e#isted at the end of the

reporting period.%. 7re indicati e of conditions that arose after the end of the reporting

period.c. 7re fa ora%le or unfa ora%le and indicati e of conditions that arose

after the end of the reporting period.d. !ro ide for conditions that existed after the date that nancial

statements were authori;ed for issue.3.7n in estment is normally classi ed as cash equi alent when its maturity is

a. Three months or less from the date of ac+uisition.%. Three months or less from the date of reporting period.c. $ix months from the date of acquisition.d. $ix months from the date of reporting period.

5.)m%edded deri ati es are %ifurcated whenI. 9n a stand4alone %asis, the em%edded feature meets the de nition of a

deri ati e.II. The com%ined contract is measured at fair alue through other

comprehensi e income.III. The economic characteristics and risks of the em%edded deri ati e and

the host contract are closely related.a. I and II only%. I and III onlyc. II and III onlyd. I, II, and III

6.The following are required disclosures for go ernment grants, excepta. The accounting policy adopted for go ernment grant.b. The name of the government agency that gave the grant.c. 8nful lled conditions and other contingencies attaching to go ernment

assistance.d. The nature and extent of go ernment grant recogni;ed in the nancial

statements.. 'hen a property held under operating lease and classi ed as in estmentproperty, the entity should

a. 7ccount for the in estment under the cost model onlyb. *ccount for the investment under the fair value model onlyc. 7ccount for the in estment either under the cost model or fair alue

model.d. /isclose only the fair alue model and can use the cost model.

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c. "ormulation and design of the possi%le product or process alternati e.d. $earch for product or process alternati e.

3 .7 change in measurement %asis isa. 7n accounting change in estimateb. *n accounting change in policyc. 7 correction of errord. 2one of the choices

3 .7ll of the following statements pertains to nance lease, excepta. The leased asset is of a speciali;ed nature such that only the lessee

can use it without maDor modi cation.%. If the lessee cancels the lease, the lessor+s losses associated with the

cancelation are %orne %y the lessee.c. Bains and losses from the uctuation in the fair alue of the residual

fall to the lessee.d. The lessee has the ability to continue the lease for a secondary

period at a rent which is substantially the same as the mar1etrent.

3 .'hich of the following statements are true concerning equity method, excepta. The in estment in associate is initially recorded at cost.%. The in estment in associate is increases or decreased %y the in estor+s

share in pro t or loss of the in estee after the date of acquisition.c. The in estor+s share in pro t and loss of the in estee is recogni;ed in

the in estor+s pro t or loss.d. $istributions received from the investee are not recogni7ed.

33.7 noncurrent asset or disposal group shall %e classi ed as held for sale when,exceptI. The sale is highly pro%a%leII. The asset is a aila%le for sale in its present condition su%Dect only to

terms that are usual and customary for sales of such asset or disposalgroup.

a. I onlyb. II onlyc. >oth I and IId. 2either I nor II

35.7 discontinued operation is a component of an entity that either has %eendisposed of or is classi ed as held for sale andI. #epresents a separate maDor line of %usiness or geographical area of

operations.II. Is part of a single coordinated plan to dispose of a separate maDor line

of %usiness and geographical area of operations.III. Is a su%sidiary exclusi ely with a iew of resale.

a. I only%. I and II onlyc. I and III onlyd. I, II and III

36."inancial statements that are expressed in a sta%le monetary unit area. -onstant peso nancial statementsb. ,ominal peso nancial statementsc. -urrent cost nancial statementsd. "air alue nancial statements

3 .'hat is the function of the chief operating decision maker*a. To allocate resources to the operating segments.%. To assess the performance of the operating segments.c. To pro ide information to nancial statement users a%out operating

segments.d. To allocate resources to the operating segments and To assess

the performance of the operating segments.5

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%. "air aluec. Galue in used. /iscounted alue

51.)ntity wide disclosures includes all of the following, excepta. Information a%out products and ser ices.%. Information a%out geographical areas.c. Information a%out maDor customersd. Information about intersegments sales and transfers.

5&.It is an arrangement where%y a pu%lic sector entity grants a pri ateconcession operator pro ide ser ices that gi e the pu%lic access to maDorinfrastructure, such as expressway and telecommunication network

a. Service concession%. Bo ernment concessionc. Bo ernment grantd. Bo ernment assistance

5 .-ash owsI. 7re in ows and out ows of cash and cash equi alentsII. )xclude mo ements %etween items that constitute cash or cash

equi alents %ecause these components are part of cash managementof an entity.

a. I only%. II onlyc. 5oth I and IId. 2either I nor II

5 .Transition loss on rst adopting !7$ 1 shall %e recogni;eda. Immediatelyb. Immediately or over a ma#imum period of 8 years revocablyc. Immediately or o er a maximum period of year irre oca%lyd. In other comprehensi e income

5 .8nder !"#$ for $()s, which of the following statements is=are true*I. !ast ser ice cost are expense when incurred.II. 7ctuarial gain and losses are recogni;ed in full either in pro t or as

component of other comprehensi e income when incurred.a. I only%. II onlyc. >oth I and IId. ,either I nor II

53.7 go ernment oEcial cannot dis%urse go ernment funds %eyond theappro ed %udget in accordance with the constitutional pro ision that nomoney shall %e paid out of the 2ational Treasury except in pursuance of anappropriation law. 9therwise, the go ernment oEcial may %e charged with

a. Technical malversation%. Theftc. Braft and corruptiond. 7n administrati e case

55.'hich of the following statements is incorrect concerning share capitaltransaction*

a. $u%scriptions recei a%le and other recei a%les from sale of sharecapital which are not currently collecti%le shall %e re ected asdeduction from the related su%scri%ed share capital.

%. 'hen the total shareholders+ equity is smaller than the amount ofcontri%uted capital, this is called de cit.

c. $eposits on subscription to a proposed increase in sharecapital shall be classi ed as noncurrent liability.

d. /iscount on share capital shall %e shown as deduction from totalshareholders+ equity.

56.The following statements are not true relating to depreciation, excepta. 7n asset must %e depreciated from the date of its purchase to the date

of sale.b. If the carrying amount of an asset is less than the residual

value0 depreciation is not charged.

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c. 7nnual depreciation should %e charged constantly o er the life of theasset.

d. The total cost of an asset must e entually %e depreciated.5 .'hich of the following classi cation is required for reporting of expenses %y

all nonpro t organi;ation*a. 2atural classi cation in the statement of acti ities or notes to nancial

statements.b. Functional classi cation in the statement of activities or notes

to nancial statements.c. "unctional classi cation in the statement of acti ities and natural

classi cation in a matrix format on a separate statement.d. 2atural classi cation in the statement of acti ities and functional

classi cation in the notes to nancial statements.6

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%. "air alue of the asset recei edc. !arrying amount of the asset given upd. -arrying amount of the asset recei ed

63.7 go ernment grant is de ned as:I. 7ssistance from the go ernment in the form of a transfer of resources

to an entity in return for past or future compliance with speci edconditions relating to the operating acti ities of the entity.

II. 8nconditional assistance from the go ernment in the form of a transferof resources to an entity.

III. 7ny type of assistance from the go ernment to the entity from whichthe entity has %ene ted directly.

a. I only%. I and II onlyc. I and III onlyd. I, II and III

65.The capitali;ation of %orrowing costsa. $hall %e suspended during temporary period of delay.%. $hall ne er %e suspended.c. Shall be suspended only during e#tended period of delay in

which active development is delayed.d. (ay %e suspended only during extended period of delay in which

acti e de elopment is delayed.66.The following are not true in relation to an acti e market, except

I. The items traded within the market are heterogeneous.II. 'illing %uyers and sellers are usually foundIII. !rices are a aila%le to the pu%lic.

a. I and II only%. I and III onlyc. II and III onlyd. I, II, and III

6 .7n entity shall initially measure equity instruments issued to a creditor toextinguish all or part of nancial lia%ility at the

a. Fair value of the e+uity instruments issued%. "air alue of the lia%ility extinguishedc. !ar alue of the equity instruments issuedd. -arrying amount of the lia%ility extinguished

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d. /emand deposits and cash equi alents.'hen preparing a statement of cash ows using the direct method,amorti;ation of goodwill is

a. $hown as an increase in cash ows from operating acti ities.%. $hown as a reduction in cash ows from operating acti ities.c. Included with supplemental disclosures of noncash transactions.d. ,ot reported in the statement of cash ows or related

disclosure..7n entity has pu%lic accounta%ility if I. 7n entity whose shares are traded in a pu%lic market.II. 7n entity whose de%t instruments %ut not its shares are traded in a

pu%lic market.III. 7n entity whose shares and de%t instruments are traded in an o er4the4

counter market.IG. 7n entity that is in the process of issuing its shares and de%ts.

a. I and III only%. I and IIc. I0 II and IIIId. I, II, III and IG

3.'ith respect to payments of annuity fund and life income fund*a. *nnuity fund payments are #ed in amount and life income

payments vary in amount.%. 7nnuity fund payments ary in amount and life income payments are

xed in amount.c. >oth annuity fund and life income fund are xed in amount.d. >oth annuity fund and life income fund ary in amount.

5.The 2ew Bo ernment 7ccounting $ystem is prescri%ed %ya. /epartment of >udget and (anagementb. !ommission on *uditc. /epartment of "inanced. >ureau of Treasury

6.The sale of scrap from a manufacturing process usually would %ea. $ecrease in factory overhead control%. Increase in factory o erhead controlc. /ecrease in nished goods controld. Increase in nished goods control

.8nder applied factory o erhead results whena. 7 plant is operated at less than its normal capacity.b. Factory overhead costs incurred are greater than the cost

charged to production.c. "actory o erhead costs incurred are less than the cost charged to

production.d. "actory o erhead costs incurred are unreasona%ly large in relation to

the num%er of units produced.1