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 only
2. I and III only
3. II and III only
4. 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 liabilities
3. Compared to its cash basis net income for the current year, an entitys
accrual basis net income increased when it
1. 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
subsidiarys financial statements are measured in terms of the local currency,
which is the peso. The subsidiarys 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
subsidiarys financial statements?
1. The subsidiarys financial statements should be remeasured in U.S.
dollars, then according to IAS 29 and consolidated.
2. The subsidiarys 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 subsidiarys financial statements should be deconsolidated
and not included in the consolidated financial statements.
4. The subsidiarys financial statements should be prepared using peso
and then translated into U.S. dollars.

5. An entity uses a periodic inventory system. If the companys beginning

inventory in the current year is overstated, and that is the only error in the
current year, then the companys 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, except
I.
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 only
2. II only
3. Both I and II
4. 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 entitys 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 received
3. Cash inflow equal to the cash received and a cash flow equal to
the cash paid
4. Cash inflow equal to the cash received and cash outflow equal to the
cash paid and note payable
8. 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. liabilities
2. reduction of capital contributed in excess of par value
3. share capital
4. 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 above
12.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 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
14.All of the following are characteristics of financial assets classified as held to
maturity investments, except
a. 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, except
1. 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 event
2. Obligating event
3. Contingent event
4. 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 collected
2. at the end of the fiscal year
3. at the end of the contract year after all of the services have been
performed
4. evenly over the contract year as the services are performed
19.PFRS 8/IFRS 8 superseded which accounting standard?
1. PAS 11
2. PAS 12
3. PAS 13
4. PAS 14
20.Directly attributable costs include all of the following, except __________.
1. cost of site preparation, initial delivery, handling and installation
2. professional fees such as for architects and engineers
3. estimated cost of dismantling and removing the asset, and restoring
the site for which the entity has a present obligation
4. 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, overstate
2. No effect, overstate, understate, understate
3. No effect, understate, overstate, overstate
4. 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 asset
2. a financial liability
3. an equity instrument
4. 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 contract
2. Executory contract
3. Sale contract
4. Executed contract
25.Which of the following is not normally the objective of financial reporting?
1. To provide information about an entitys assets, claims against those
assets and changes in them.
2. To provide information that is useful in assessing an entitys 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 disclosure
2. separately as noncurrent asset, with appropriate disclosure
3. be written off as an extraordinary loss
4. 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 value
3. Value in use
4. Discounted value
30.Which of the following statement is false?
1. A certified check is a liability of the bank certifying it
2. A certified check will be accepted by many persons who would not
otherwise accept a personal check
3. A certified check is one drawn by a bank upon itself
4. A certified check should not be included in the outstanding checks
31.Under applied factory overhead results when
a. 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-thecounter market.
IV.
An entity that is in the process of issuing its shares and debts.
a. I and III only
b. I and II
c. I, II and IIII
d. 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 difference
b. Taxable temporary difference
c. Deductible temporary difference
d. 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 only
b. I and II only
c. I and III only
d. 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 only
b. II only
c. Both I and II
d. 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 only
b. II only
c. Both I and II
d. Neither I nor II
37.Cash flows
I.
Are inflows and outflows of cash and cash equivalents
II.
Exclude movements between items that constitute cash or cash
equivalents because these components are part of cash management
of an entity.
a. I only
b. II only
c. Both I and II
d. 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 only
b. I and II only
c. I and III only
d. I, II and III
39.A noncurrent asset or disposal group shall be classified as held for sale when,
except
I.
The sale is highly probable
II.
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 only
b. II only
c. Both I and II
d. 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 only
b. I and III only
c. II and III only
d. I, II, and III
41.Which of the following pertains to a related party
I.
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 only
b. I and III only
c. II and III only
d. 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 only
b. I and III only
c. II and III only
d. 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 when
I.
It is apparent following a significant change in the nature of the entitys
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 only
b. II only
c. Both I and II
d. 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 only
b. II only
c. Both I and II
d. 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 only
b. II only
c. Both I and II
d. Neither I nor II
46.In calculating the carrying amount of loan receivable, the lender adds to the
principal amount
I.
Direct loan origination cost.
II.
Indirect loan origination cost.
III.
Loan origination fee.
a. I only
b. I and II only
c. I and III only
d. II and III only
47.Inventories are defined as
I.
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 only
b. I and II only
c. II and III only
d. I, II and III
48.Which of following are required disclosures in relation to borrowing cost
I.
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 only
b. I and III only
c. II and III only
d. 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 entitys most
recent annual financial statements under previous accounting
framework.
b. The end of the latest period presented in the entitys 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, except
I.
The items traded within the market are heterogeneous.
II.
Willing buyers and sellers are usually found
III.
Prices are available to the public.
a. I and II only
b. I and III only
c. II and III only
d. 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 only
b. II only
c. Either I or II
d. Neither I nor II
52.A financial liability is any liability that is a contractual obligation
I.
To deliver cash to another entity
II.
To exchange financial assets or financial liabilities with another entity
under conditions that are potentially favorable to another entity.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
53.Interim financial report means a financial report containing:
I.
a complete set of financial statements
II.
a set of condensed financial statements
1. I only
2. II only
3. Either I or II
4. Neither I nor II
54.Accounts receivable shall be recognized initially at __________.
1. face value
2. discounted value
3. maturity value
4. 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 item
2. Commission paid when purchased
3. Labor cost of the item when manufactured
4. 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 received
2. income at par value of the shared received
3. income at the cash dividend that would have been received
4. stock dividends
58.If the price of the underlying is greater than the strike or exercise price, the
call option is
1. at the money
2. in the money
3. on the money
4. 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
payments
2. the face amount of the bond
3. 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 revenue
2. objectivity in the calculation of periodic expense
3. recognition of assets and liabilities
4. consistency of tax expense measurement with actual tax planning
strategies
61.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 date
2. Announcement date
3. Acquisition date
4. 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 employees level within the organization.
V.
expected volatility of the underlying shares.
1. Only three of the statements are true
2. Only four of the statements are true
3. All of the statements are true
4. 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 sale
2. gross profit is recognized only after the amount of cash collected
exceeds the cost of the item sold
3. revenue, costs and gross profit are recognized proportionally as the
cash received from the sale of product
4. 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 holds
2. product warranties issued directly by a manufacturer, dealer or retailer
3. contingent consideration payable or receivable in a business
combination
4. 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 resale
4. All of the above
5. 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 true
2. Only two of the statements are true
3. All of the statements are true
4. None of the statements is true
67.The sale of scrap from a manufacturing process usually would be
1. Decrease in factory overhead control
2. Increase in factory overhead control
3. Decrease in finished goods control
4. Increase in finished goods control
68.What is the classification of exploration and evaluation asset in the statement
of financial position?
1. Tangible asset only
2. Intangible asset only
3. Either tangible or intangible asset
4. Neither tangible or intangible asset
69.A written put option is
1. 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 by
1. Increased overall level of activity.
2. Customers requirement for early completion of job.
3. Managements failure to include the job in the production schedule.
4. Managements 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 neutrality
2. Completeness, free from error and substance over form
3. Completeness, free from error and neutrality
4. Completeness, neutrality, free from error and prudence

73.What are the enhancing qualitative characteristics of financial statements?

1. Comparability and understandability
2. Verifiability and timeliness
3. Comparability, understanding and verifiability
4. 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
entitys financial position and financial performance.
75.The following are registries for allotments received and obligations incurred,
except
1. Registry of allotments and obligation personal services
2. Registry of allotments and obligation maintenance and other
operating expense
3. Registry of allotments and obligation capital expenditures
4. Registry of allotments and obligation financial expenses
76.Which of the following represents that maximum amortization period
mandated for intangible assets?
1. 10 years
2. 20 years
3. 40 years
4. No arbitrary cap.
77.The following are required disclosures for government grants, except
1. 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 lessors 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 concession

2. Government concession
3. Government grant
4. 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 malversation
2. Theft
3. Graft and corruption
4. An administrative case
81.Cash comprises
1. Cash on hand and demand deposits
2. Cash on hand, demand deposits and cash equivalents
3. Cash on hand and cash equivalents
4. 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 recognized
1. Immediately
2. Immediately or over a maximum period of 5 years revocably
3. Immediately or over a maximum period of 5 year irrevocably
4. In other comprehensive income
84.Financial statements that are expressed in a stable monetary unit are
1. Constant peso financial statements
2. Nominal peso financial statements
3. Current cost financial statements
4. 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. Contribution
2. Agency transaction
3. Conditional transfer
4. 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 liability
2. Included in total receivables without disclosure of contingent liability
3. Excluded from total receivables with disclosure of contingent
liability
4. Excluded from total receivables without disclosure of contingent
liability
89.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 incurred
2. Cost relationships are valid
3. Cost may fluctuate
4. Production may vary
91.The New Government Accounting System is prescribed by
1. Department of Budget and Management
2. Commission on Audit
3. Department of Finance
4. 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 issued
2. Fair value of the liability extinguished
3. Par value of the equity instruments issued
4. Carrying amount of the liability extinguished
93.An entity shall report separately cash flows arising from investing and
financing activities using
1. Direct method
2. Indirect method
3. Either direct or indirect method
4. Neither direct nor indirect method
94.The following statements are not true relating to depreciation, except
1. 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 value
2. Fair value
3. Value in use
4. Discounted value
96.Which of the following statements are true concerning equity method, except
1. The investment in associate is initially recorded at cost.
2. The investment in associate is increases or decreased by the investors
share in profit or loss of the investee after the date of acquisition.
3. The investors share in profit and loss of the investee is recognized in
the investors profit or loss.
4. Distributions received from the investee are not recognized.
97.Research activities include all of the following, except
1. 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 estimate
2. An accounting change in policy
3. A correction of error
4. None of the choices
99.It is the amount of income taxes payable in respect of taxable profit.
1. Current tax expense
2. Income tax expense
3. Deferred tax expense
4. 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.