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 define standard for any particular measurement or disclosure issue.

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

III. In case of conflict, the requirements of the conceptual framework prevail over those of the relevant PFRS.

1. I and II only2. I and III only3. II and III only4. I, II and III

2. In general, the IFRS requires an entity to comply with each IFRS effective at the end of its first IFRS reporting period. In particular, the IFRS requires an entity to do the following in the opening IFRS statement of financial position that it prepares as a starting point for its accounting under IFRSs, except:

1. recognize all assets and liabilities whose recognition is required by IFRSs

2. not recognize items as assets or liabilities if IFRSs do not permit such recognition

3. reclassify items that it recognized under previous GAAP as one type of asset, liability or component of equity, but are a similar type of asset, liability or component of equity under IFRSs

4. apply IFRSs in measuring all recognized assets and liabilities3. Compared to its cash basis net income for the current year, an entity’s

accrual basis net income increased when it1. Declared dividend in the prior year that it paid in the current year.2. Had lower accrued expense on December 31 of the current

year than on January 1. 3. Sold used equipment for cash at a gain in the current year.4. Wrote off more accounts receivable than it reported as uncollectible

accounts expense in the current year.4. An entity has a subsidiary that operates in a hyperinflationary economy. The

subsidiary’s financial statements are measured in terms of the local currency, which is the peso. The subsidiary’s financial statements have been restated in accordance with IAS 29. The parent is located in the United States and prepares the consolidated financial statements in U.S. dollars. Which of the following accounting procedures is correct in terms of the consolidation of the subsidiary’s financial statements?

1. The subsidiary’s financial statements should be remeasured in U.S. dollars, then according to IAS 29 and consolidated.

2. The subsidiary’s financial statements should be prepared using peso, then restated according to IAS 29 and then translated into U.S. dollars at closing rate.

3. The subsidiary’s financial statements should be deconsolidated and not included in the consolidated financial statements.

4. The subsidiary’s financial statements should be prepared using peso and then translated into U.S. dollars.

5. An entity uses a periodic inventory system. If the company’s beginning inventory in the current year is overstated, and that is the only error in the current year, then the company’s income for the year will be

1. Understated and assets correctly stated.2. Understated and assets overstated.3. Overstated and assets overstated.4. Understated and assets understated.

6. Which of the following statements is/are false concerning dilution, exceptI. A reduction in earnings per share is an example of dilution.II. A reduction in loss per share is an example of dilution.

1. I only2. II only3. Both I and II4. Neither I nor II

7. On January 21 of the current year, an entity sold one of its used equipments for cash with an amount equal to its carrying amount for both book and tax purposes. On February 23, the entity replaced the equipment by paying cash and signing a note payable for the new equipment. How should these equipment transactions be reported in the entity’s cash flow statement?

1. Cash outflow equal to the cash paid and note payable less the cash received

2. Cash outflow equal to the cash paid less the cash received3. Cash inflow equal to the cash received and a cash flow equal to

the cash paid4. Cash inflow equal to the cash received and cash outflow equal to the

cash paid and note payable8. What depreciation method is most appropriate for the significant part of an

aircraft?1. Straight line method for all parts of the aircraft.2. Production method based on air miles flown for the jet engine,

and straight line method for all other parts of the aircraft.3. Production method based on air miles flown for all parts of the aircraft.4. Diminishing balance method for all parts of the aircraft.

9. Share warrants outstanding should be reported as __________.1. liabilities2. reduction of capital contributed in excess of par value3. share capital4. share premium

10.An outflow of resources embodying future economic benefits is regarded as probable when

1. The event is more likely than not to occur.2. The probability that the event will not occur is greater than the

probability that the event will occur.3. The probability that the event will occur is the same as the probability

that the event will not occur.4. The probability that the event will occur is 90% likely.

11.For cash flow hedges, an entity shall disclose:1. a description of any forecast transaction for which hedge accounting

had previously been used, but which is no longer expected to occur

2. the amount that was recognized in other comprehensive income during the period

3. the amount that was removed from equity during the period and included in the initial cost or other carrying amount of a non-financial asset or non-financial liability whose acquisition or incurrence was a hedged highly probable forecast transaction

4. None of the above12.Agricultural activity is defined as

1. The aggregation of similar living animals or plants.2. The detachment of agricultural produce from a biological asset.3. The process of growth, degeneration, production and procreation of a

biological asset.4. The management by an entity of the biological transformation

and harvest of biological asset for or for conversion into agricultural produce.

13.A written put option is __________.1. a contract that requires an entity to repurchase its own

ordinary shares2. a contract that gives the holder the right to sell ordinary shares at a

specified price for a given period3. a financial instrument that gives the holder the right to purchase

ordinary shares4. an agreement to issue ordinary shares that is dependent on the

satisfaction of specified conditions14.All of the following are characteristics of financial assets classified as held to

maturity investments, excepta. They have fixed or determinable payments and a fixed maturity.b. The holder can recover substantially all of the investments

unless there has been credit deterioration.c. They are quoted in an active market.d. The holder has a demonstrated positive intention and ability to hold

them to maturity.15.The situations that would normally lead to a lease being classified as a

finance lease include all the following, except:1. The lease transfers ownership of the asset to the lessee by the end of

the lease term.2. The lessee has the option to purchase the asset at a price,

which is expected to be sufficiently higher than the fair value at the date the option becomes exercisable.

3. The lease term is for the major part of the economic life of the asset even if title is not transferred.

4. The present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset at the inception of the lease.

16.The following are objectives of NGAS, except1. To simplify government accounting towards eventual computerization.2. To conform with IFRS.3. To provide error free financial statements.4. To serve as tool for manages and executives in effective and efficient

monitoring of government agency performance.

17.It is an event that creates a legal or constructive obligation because that entity has no longer realistic alternative but to settle the obligation

1. Adjusting event2. Obligating event3. Contingent event4. Nonadjusting event

18.For a fixed amount a month, an entity visits its customers’ premises and performs insect control services. If customers experience problems between regularly scheduled visits, the entity makes service calls at no additional charge. Instead of paying monthly, customers may pay a certain annual fee in advance. For a customer who pays the annual fee in advance, the entity should recognize the related revenue __________.

1. when the cash is collected2. at the end of the fiscal year3. at the end of the contract year after all of the services have been

performed4. evenly over the contract year as the services are performed

19.PFRS 8/IFRS 8 superseded which accounting standard?1. PAS 112. PAS 123. PAS 134. PAS 14

20.Directly attributable costs include all of the following, except __________.1. cost of site preparation, initial delivery, handling and installation2. professional fees such as for architects and engineers3. estimated cost of dismantling and removing the asset, and restoring

the site for which the entity has a present obligation4. cost incurred while an item capable of operating for its

intended use has yet to be brought into use or is operated at less than capacity

21.The December 31, 2013, physical inventory of an entity appropriately included merchandise purchased on account that was not recorded in purchases until January 2013. What effect will this error have on December 31, 2013, assets, liabilities, retained earnings, and earnings for the year then ended, respectively?

1. Understated, no effect, overstate, overstate2. No effect, overstate, understate, understate3. No effect, understate, overstate, overstate4. No effect, understate, understate, overstate

22.What will happen when the financial statements of an associate are not prepared as of the same date as the financial statement of the investor?

1. The associate shall prepare financial statements for the use of the investor at the same date as that of the investor.

2. The financial statements of the associate prepared up to a different date shall be used as normal.

3. Any major transactions between the date of the financial statements of the investor and that of the associate shall be accounted for.

4. As long as the gap is not greater than three months, there should be no problem.

23.A preference share that provides for mandatory redemption on a specific date or at the option of the holder is __________.

1. a financial asset2. a financial liability3. an equity instrument4. neither a financial liability nor an equity instrument

24.It is a contract in which the unavoidable cost of meeting the obligations under the contract exceeded the economic benefits to be received under the contract.

1. Onerous contract2. Executory contract3. Sale contract4. Executed contract

25.Which of the following is not normally the objective of financial reporting?1. To provide information about an entity’s assets, claims against those

assets and changes in them.2. To provide information that is useful in assessing an entity’s sources

and uses of cash.3. To provide information that is useful in lending and investing decisions.4. To provide information about liquidation value of the company.

26.If material, deposits in foreign bank that are subject to foreign exchange restriction should be classified _________.

1. separately as current asset, with appropriate disclosure2. separately as noncurrent asset, with appropriate disclosure3. be written off as an extraordinary loss4. as part of cash and cash equivalents

27.Which of the following is correct regarding earnings per share?1. If preference share is outstanding, dividend declared on the

preference share is always deducted from net income in calculating EPS.

2. EPS can never be negative.3. If income from continuing operations is less than zero, potentially

dilutive securities are anti-dilutive.4. All issues convertible to ordinary shares must be included in the

calculation of diluted EPS.28.All of the following statements relates to finance lease, except

1. The lease transfers ownership of the asset to the lessee at the end of the lease term.

2. The lessee has the option to purchase the asset at a price that is expected to be approximately equal to the fair value at exercise date.

3. The lease term is for a major part of the economic life of the asset even if the title is not transferred.

4. The present value of the minimum lease payments amounts to at least substantially all of the fair value of the asset at the inception of the lease.

29.It is the present value of cash flows an entity expects to arise from the continuing use of an asset and from its disposal at the end of its useful life or expects to incur when settling a liability.

1. Entity-specific value

2. Fair value3. Value in use4. Discounted value

30.Which of the following statement is false?1. A certified check is a liability of the bank certifying it2. A certified check will be accepted by many persons who would not

otherwise accept a personal check3. A certified check is one drawn by a bank upon itself4. A certified check should not be included in the outstanding checks

31.Under applied factory overhead results whena. A plant is operated at less than its normal capacity.b. Factory overhead costs incurred are greater than the cost

charged to production.c. Factory overhead costs incurred are less than the cost charged to

production.d. Factory overhead costs incurred are unreasonably large in relation to

the number of units produced.32.An entity has public accountability if

I. An entity whose shares are traded in a public market.II. An entity whose debt instruments but not its shares are traded in a

public market.III. An entity whose shares and debt instruments are traded in an over-

the-counter market.IV. An entity that is in the process of issuing its shares and debts.

a. I and III onlyb. I and IIc. I, II and IIIId. I, II, III and IV

33.It is the difference that will result in future taxable amounts in determining taxable profit of future periods when the carrying amount of the asset or liability is recovered or settled.

a. Temporary differenceb. Taxable temporary differencec. Deductible temporary differenced. Permanent difference

34.A government grant is defined as:I. Assistance from the government in the form of a transfer of resources

to an entity in return for past or future compliance with specified conditions relating to the operating activities of the entity.

II. Unconditional assistance from the government in the form of a transfer of resources to an entity.

III. Any type of assistance from the government to the entity from which the entity has benefited directly.

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

35.Which of the following statements is/are correct concerning reversal of an impairment loss?

I. The increased carrying amount of the asset due to a reversal of an impairment loss may exceed the carrying amount that would have been determined if it had no impairment loss that has been recognized in the prior years.

II. An impairment loss recognized on goodwill shall not be reversed in a subsequent period.

a. I onlyb. II onlyc. Both I and IId. Neither I nor II

36.Under PFRS for SMEs, which of the following statements is/are true?I. Past service cost are expense when incurred.II. Actuarial gain and losses are recognized in full either in profit or as

component of other comprehensive income when incurred.a. I onlyb. II onlyc. Both I and IId. Neither I nor II

37.Cash flowsI. Are inflows and outflows of cash and cash equivalentsII. Exclude movements between items that constitute cash or cash

equivalents because these components are part of cash management of an entity.

a. I onlyb. II onlyc. Both I and IId. Neither I nor II

38.A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale and I. Represents a separate major line of business or geographical area of

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

of business and geographical area of operations.III. Is a subsidiary exclusively with a view of resale.

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

39.A noncurrent asset or disposal group shall be classified as held for sale when, exceptI. The sale is highly probableII. The asset is available for sale in its present condition subject only to

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

a. I onlyb. II onlyc. Both I and IId. Neither I nor II

40.Embedded derivatives are bifurcated when

I. On a stand-alone basis, the embedded feature meets the definition of a derivative.

II. The combined contract is measured at fair value through other comprehensive income.

III. The economic characteristics and risks of the embedded derivative and the host contract are closely related.

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

41.Which of the following pertains to a related partyI. Controlled by or is under common control with the entity.II. Has an interest in the entity that gives it significant influence over the

entity.III. Has joint control over the entity.

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

42.The following are not purposes of the notes to financial statements, except:I. To present information about the basis of preparation of the financial

statements and the specific accounting policies used.II. To disclose the information required by PFRS that presented elsewhere

in the financial statements.III. To provide information that is presented elsewhere in the financial

statements but is relevant to an understanding of the statements.a. I and II onlyb. I and III onlyc. II and III onlyd. I, II, and III

43.An entity can change the presentation and classification of items in the financial statements from one period to the next whenI. It is apparent following a significant change in the nature of the

entity’s operations or a review of its financial statements that another presentation or classification would be more appropriate.

II. A PFRS requires a change in presentation.a. I onlyb. II onlyc. Both I and IId. Neither I nor II

44.Which of the following is true in relation to relevance?I. Relevant financial information is capable of making difference in the

decision of the users.II. Financial information is capable of making decisions if it has predictive

value.a. I onlyb. II onlyc. Both I and IId. Neither I nor II

45.Which of the following statements in relation to intangible assets acquired in a business combination is/are true?I. Intangible assets acquired in business combination shall only be

recognized if they have already been recognized by the entity being acquired.

II. Intangible assets acquired in a business combination shall not be recognized separately from goodwill.

a. I onlyb. II onlyc. Both I and IId. Neither I nor II

46.In calculating the carrying amount of loan receivable, the lender adds to the principal amountI. Direct loan origination cost.II. Indirect loan origination cost.III. Loan origination fee.

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

47.Inventories are defined asI. Assets held for sale in the ordinary course of business, in the process

of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

II. Assets held for sale, in the process of production, or in the form of materials or supplies to consumed in the production process.

III. Assets that are held for sale.a. I onlyb. I and II onlyc. II and III onlyd. I, II and III

48.Which of following are required disclosures in relation to borrowing costI. Amount of borrowing cost capitalized during the period.II. Aggregation of assets that are qualifying assets with other assets in

the statement of financial position with disclosure in the notes to financial statements.

III. Capitalization rate used to determine the amount of borrowing cost eligible for capitalization.

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

49.Which of the following statements best describes the date of transition to PFRS for SMEs?

a. The beginning of the latest period presented in the entity’s most recent annual financial statements under previous accounting framework.

b. The end of the latest period presented in the entity’s most recent annual financial statements under previous accounting framework.

c. The beginning of the earliest period for which an entity presents full comparative information under PFRS for SMEs in its first financial statements that conforms with PFRS for SMEs.

d. The end of the earliest for which an entity presents full comparative information under PFRS for SMEs in its first financial statements that conform with PFRS for SMEs.

50.The following are not true in relation to an active market, exceptI. The items traded within the market are heterogeneous.II. Willing buyers and sellers are usually foundIII. Prices are available to the public.

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

51.Which type of expenditure is/are included in the term “exploration and evaluation” of mineral resources?I. The extraction and processing of mineral for transport to market.II. The commercial review of possible areas for mineral extraction before

bidding for legal rights to explore a specific area.a. I onlyb. II onlyc. Either I or IId. Neither I nor II

52.A financial liability is any liability that is a contractual obligationI. To deliver cash to another entityII. To exchange financial assets or financial liabilities with another entity

under conditions that are potentially favorable to another entity.a. I onlyb. II onlyc. Both I and IId. Neither I nor II

53.Interim financial report means a financial report containing:I. a complete set of financial statementsII. a set of condensed financial statements

1. I only2. II only3. Either I or II4. Neither I nor II

54.Accounts receivable shall be recognized initially at __________.1. face value2. discounted value3. maturity value4. current value

55.When accounts receivable aging schedule is prepared at the end of the fiscal year, a series of computation like the following is sometimes made: 5% of the total peso balance of accounts from 1-30 days past due, plus 10% of the total peso balance of accounts from 31-60 days past due, and so on. Which of the following statements best describes how the sum of the amounts determined in this series of computations is used?

1. When added to the total accounts written off during the year, this new sum is the desired credit balance of the allowance for doubtful accounts to be reported in the year-end financial statements.

2. It is the end amount of bad debt expense for the year.3. It is the amount that should be added to the allowance for doubtful

accounts at year-end.4. It is the amount of desired credit balance of the allowance for doubtful

accounts to be reported in the year-end financial statements.56.When determining the unit cost of an inventory item, which of the following

should not be included?1. Interest on loan obtained to purchase the item2. Commission paid when purchased3. Labor cost of the item when manufactured4. Depreciation of plant equipment used in manufacturing the item

57.Shares received in lieu of cash dividend are recorded as __________.1. income at fair value of the shares received2. income at par value of the shared received3. income at the cash dividend that would have been received4. stock dividends

58.If the price of the underlying is greater than the strike or exercise price, the call option is

1. at the money2. in the money3. on the money4. out of the money

59.In theory, the proceeds from the sale of a bond will be equal to __________.1. the sum of the face amount of the bond and the periodic interest

payments2. the face amount of the bond3. the present value of the principal amount due at the end of the

life of the bond the present of the interest payments made during the life of the bond

4. the face amount of the bond plus the present value of the interest payments made during the life of the bond

60.Justification for the method of determining periodic deferred tax expense is based on the concept of __________.

1. matching of periodic expense to periodic revenue2. objectivity in the calculation of periodic expense3. recognition of assets and liabilities4. consistency of tax expense measurement with actual tax planning

strategies61.It is the date when a substantive agreement between the combining entities

is reached and in the case of publicly listed entities announced to the public.1. Agreement date2. Announcement date3. Acquisition date4. Combination date

62.Factors to consider in estimating early exercise include:

I. the length of the vesting period, because the share option typically can be exercised until the end of the vesting period. Hence, determining the valuation implications of expected early exercise is based on the assumption that the options will vest.

II. the average length of time distinct options have remained outstanding in the past.

III. the price of the underlying shares. IV. the employee’s level within the organization. V. expected volatility of the underlying shares.

1. Only three of the statements are true2. Only four of the statements are true3. All of the statements are true4. None of the statements is true

63.When using the installment sales method, __________.1. gross profit is deferred until all cash is received, but revenue and costs

are recognized in proportion to the cash collected from the sale2. gross profit is recognized only after the amount of cash collected

exceeds the cost of the item sold3. revenue, costs and gross profit are recognized proportionally as the

cash received from the sale of product4. total revenue and costs are recognized at the point of sale, but

gross profit is deferred in proportion to the cash that is uncollected from the sale

64.An entity shall apply IFRS 4 to __________.1. insurance contracts that it issues and reinsurance contracts

that it holds2. product warranties issued directly by a manufacturer, dealer or retailer3. contingent consideration payable or receivable in a business

combination4. direct insurance contracts that the entity holds

65.A discontinued operation is a component of an entity that either has been disposed of, or is classified as held for sale, and __________.

1. represents an amalgamated major line of business or geographical area of operations,

2. is part of a single co-ordinated plan to procure of a separate major line of business or geographical area of operations

3. is a subsidiary acquired exclusively with a view to resale4. All of the above5. None of the above

66.IFRS 1 applies when an entity first adopts IFRSs. It does not apply when, for example, an entity:I. stops presenting financial statements in accordance with national

requirements, having previously presented them as well as another set of financial statements that contained an explicit and unreserved statement of compliance with IFRSs

II. presented financial statements in the succeeding year in accordance with national requirements and those financial statements contained an explicit and unreserved statement of compliance with IFRSs

III. presented financial statements in the succeeding year that contained an explicit and unreserved statement of compliance with IFRSs, even if the auditors qualified their audit report on those financial statements.1. Only one of the statements is true2. Only two of the statements are true3. All of the statements are true4. None of the statements is true

67.The sale of scrap from a manufacturing process usually would be1. Decrease in factory overhead control2. Increase in factory overhead control3. Decrease in finished goods control4. Increase in finished goods control

68.What is the classification of exploration and evaluation asset in the statement of financial position?

1. Tangible asset only2. Intangible asset only3. Either tangible or intangible asset4. Neither tangible or intangible asset

69.A written put option is1. A contract that requires an entity to repurchase its own

ordinary shares.2. A contract that gives the holder the right to sell ordinary shares at a

specified price for a given period.3. A financial instrument that gives the holder the right to purchase

ordinary shares.4. An agreement to issue ordinary shares that is dependent on the

satisfaction of specified conditions.70.A direct labor overtime premium should be charged to a specific job when the

overtime is caused by1. Increased overall level of activity.2. Customer’s requirement for early completion of job.3. Management’s failure to include the job in the production schedule.4. Management’s requirement that the job be completed before the

annual factory vacation closure.71.The following are not the function of Bureau of Treasury, except

1. Responsible for design, preparation and approval of accounting systems of government agencies.

2. Responsible for the formulation and implementation of National Budget.

3. Responsible for monitoring the control appropriation and allotments.4. Responsible for maintaining accounts of financial transactions

of all government agencies.72.What are the ingredients of a perfect faithful representation?

1. Completeness and neutrality2. Completeness, free from error and substance over form3. Completeness, free from error and neutrality

4. Completeness, neutrality, free from error and prudence73.What are the enhancing qualitative characteristics of financial statements?

1. Comparability and understandability2. Verifiability and timeliness3. Comparability, understanding and verifiability4. Comparability, understanding, verifiability, and timeliness

74.The following pertains to fair presentation required for an entity, except:1. To comply with applicable PFRS.2. To rectify inappropriate accounting policies used either by

disclosure or by note or explanatory material.3. To present information, including accounting policies, in a manner that

provides relevant, reliable, comparable and understandable information.

4. To provide additional disclosures when compliance with the specific requirements in PFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance.

75.The following are registries for allotments received and obligations incurred, except

1. Registry of allotments and obligation – personal services2. Registry of allotments and obligation – maintenance and other

operating expense3. Registry of allotments and obligation – capital expenditures4. Registry of allotments and obligation – financial expenses

76.Which of the following represents that maximum amortization period mandated for intangible assets?

1. 10 years2. 20 years3. 40 years4. No arbitrary cap.

77.The following are required disclosures for government grants, except1. The accounting policy adopted for government grant.2. The name of the government agency that gave the grant.3. Unfulfilled conditions and other contingencies attaching to government

assistance.4. The nature and extent of government grant recognized in the financial

statements.78.All of the following statements pertains to finance lease, except

1. The leased asset is of a specialized nature such that only the lessee can use it without major modification.

2. If the lessee cancels the lease, the lessor’s losses associated with the cancelation are borne by the lessee.

3. Gains and losses from the fluctuation in the fair value of the residual fall to the lessee.

4. The lessee has the ability to continue the lease for a secondary period at a rent which is substantially the same as the market rent.

79.It is an arrangement whereby a public sector entity grants a private concession operator provide services that give the public access to major infrastructure, such as expressway and telecommunication network

1. Service concession2. Government concession3. Government grant4. Government assistance

80.A government official cannot disburse government funds beyond the approved budget in accordance with the constitutional provision that no money shall be paid out of the National Treasury except in pursuance of an appropriation law. Otherwise, the government official may be charged with

1. Technical malversation2. Theft3. Graft and corruption4. An administrative case

81.Cash comprises1. Cash on hand and demand deposits2. Cash on hand, demand deposits and cash equivalents3. Cash on hand and cash equivalents4. Demand deposits and cash equivalents

82.With respect to payments of annuity fund and life income fund?1. Annuity fund payments are fixed in amount and life income

payments vary in amount.2. Annuity fund payments vary in amount and life income payments are

fixed in amount.3. Both annuity fund and life income fund are fixed in amount.4. Both annuity fund and life income fund vary in amount.

83.Transition loss on first adopting PAS 19 shall be recognized1. Immediately2. Immediately or over a maximum period of 5 years revocably3. Immediately or over a maximum period of 5 year irrevocably4. In other comprehensive income

84.Financial statements that are expressed in a stable monetary unit are1. Constant peso financial statements2. Nominal peso financial statements3. Current cost financial statements4. Fair value financial statements

85.A nonprofit organization receives an asset for which it has little or no discretion over the use of the asset. The organization should report the asset as

1. Contribution2. Agency transaction3. Conditional transfer4. Either contribution or conditional transfer

86.Which of the following is true when the effective interest method of amortizing bond discount is used?

1. Interest expense as a percentage of the bonds carrying amount varies from period to period.

2. Interest expense decreases each period.3. Interest expense increases each period.4. Interest rate decreases each period.

87.A nonpublicly accountable entity must make an explicit and unreserved statements of compliance with the PFRS for SMEs

1. If the entity complies with all the requirements of PFRS for SMEs.

2. If the entity complies with the vast majority of the requirements of the PFRS for SMEs.

3. If the entity complies the national GAAP based on PFRS for SMEs with some specific differences.

4. If the entity complies with full PFRS.88.Note receivables discounted with recourse should be

1. Included in total receivables with disclosure of contingent liability2. Included in total receivables without disclosure of contingent liability3. Excluded from total receivables with disclosure of contingent

liability4. Excluded from total receivables without disclosure of contingent

liability89.The following are basic purposes of the conceptual framework, except:

1. To assist FRSC in developing accounting standards that represents GAAP in the Philippines.

2. To assist FRSC in reviewing and adopting existing international accounting standards.

3. To promulgate rules and regulations affecting the practice of the accountancy profession.

4. To assist auditors in forming an opinion as to whether financial statements conform with accounting standards.

90.In cost accounting, the term relevant range refers to the range over which the

1. Relevant cost are incurred2. Cost relationships are valid3. Cost may fluctuate4. Production may vary

91.The New Government Accounting System is prescribed by1. Department of Budget and Management2. Commission on Audit3. Department of Finance4. Bureau of Treasury

92.An entity shall initially measure equity instruments issued to a creditor to extinguish all or part of financial liability at the

1. Fair value of the equity instruments issued2. Fair value of the liability extinguished3. Par value of the equity instruments issued4. Carrying amount of the liability extinguished

93.An entity shall report separately cash flows arising from investing and financing activities using

1. Direct method2. Indirect method3. Either direct or indirect method4. Neither direct nor indirect method

94.The following statements are not true relating to depreciation, except1. An asset must be depreciated from the date of its purchase to the date

of sale.

2. If the carrying amount of an asset is less than the residual value, depreciation is not charged.

3. Annual depreciation should be charged constantly over the life of the asset.

4. The total cost of an asset must eventually be depreciated.95.It is the present value of the cash flows an entity expects to arise from the

continuing use of an asset and from its disposal at the end of its useful life or expects to incur when settling a liability

1. Entity-specific value2. Fair value3. Value in use4. Discounted value

96.Which of the following statements are true concerning equity method, except1. The investment in associate is initially recorded at cost.2. The investment in associate is increases or decreased by the investor’s

share in profit or loss of the investee after the date of acquisition.3. The investor’s share in profit and loss of the investee is recognized in

the investor’s profit or loss.4. Distributions received from the investee are not recognized.

97.Research activities include all of the following, except1. Search for application of research finding or other knowledge.2. Design, construction and testing of preproduction of prototype

and model.3. Formulation and design of the possible product or process alternative.4. Search for product or process alternative.

98.A change in measurement basis is 1. An accounting change in estimate2. An accounting change in policy3. A correction of error4. None of the choices

99.It is the amount of income taxes payable in respect of taxable profit.1. Current tax expense2. Income tax expense3. Deferred tax expense4. Deferred tax benefit

100. An entity shall not disclose in the summary of significant accounting policies, except

1. The measurement basis used in preparing the financial statemetns.2. All the measurement bases specified in PFRS irrespective of whether

they werw used by the entity in preparing its financial statements.3. The measurement basis used in preparing financial statements

and the accounting policies used that are relevant to an understanding of the financial statements.

4. All of the measurements bases and the accounting policy choices available to the entity specified in PFRS irrespective of whether they were used by the entity in preparing the financial statements.