Professional Documents
Culture Documents
9. In recording the bank balance with the book cash balance, which
of the following would not cause the bank balance shown on the
bank statement to be lower than the unadjusted book balance?
(a)cash on hand at the company
(b)NSF checks from a customer, as reported on the bank
statement
(c) interest credited to the account by the bank
(d)deposits in transit
(d)The lower of its carrying amount on the basis that it had never
been classified as held for sale and its recoverable amount
32. Which of the following is not reversed at the start of the new
accounting period?
(a) expense paid in advance that is debited to the expense
account at the time of payment
(b) doubtful accounts computed using the aging schedule
(c) income earned but not yet recorded because was not yet
received
(d) rent collected in advance and credited to a nominal account
37. The historical cost concept measures assets on the basis of:
(a)the replacement cost of assets on the balance sheet
(b)the amount of cash for which the assets could be sold
(c) an appraisal by the auditors
(d)the fair market value of assets on the day they were acquired
46. Jeff purchased a new register system for his grocery store,
paying P1,000 in cash and issuing a P6,000 note payable for the
balance owed. As a result of this transaction, Jeff’s balance sheet
would reflect:
(a)an increase in assets and an increase in liabilities
(b)a decrease in assets and an increase in liabilities
(c) an increase in assets and a decrease in liabilities
(d)an increase in assets and an increase in owner’s equity
50. Dean has completed the posting process for the month of June
and has prepared a trial balance in which the debits total P11,000
and the credits total P11,100. Which of the following errors would
be the most likely candidate in causing the trial balance not to
balance by P100?
(a)a P100 debit was posted as a P100 credit
(b)a P100 debit was posted as a P100 credit and a P100 credit
was posted as a P100 debit
(c) a P50 debit was posted as a P50 credit
(d)the purchase of supplies on account was never posted to the
general ledger
60. Subnormal or obsolete goods, either under the cost or the lower
of cost or market basis:
(a)should be taken up an unrealized inventory loss.
(b)should be valued at bona-fide selling price less direct cost of
disposition.
(c) should be valued by applying an inventory method that uses a
constant or nominal value for the normal inventory level.
(d)should be adjusted in the cost of goods sold.
B
61. Merchandise which a trader contracted to purchase but which
was not delivered or identified in the year should:
(a)not be included in the inventory.
(b)be included in the inventory at cost.
(c) be included in the inventory at its probable retail value.
(d)be included in the inventory at a normal price.
A
72. Some obligations that are due to be repaid within the next
operating cycle and expected to be refinanced or “rolled over”
should be classified as noncurrent:
(a)If the refinancing or “rolling over” is at the discretion of the
enterprise and the refinancing agreement has been reached
before the issuance of the statements.
(b)If the refinancing or “rolling over” is at the discretion of the
enterprise regardless of whether a refinancing agreement has
been reached or not before the issuance of the statements.
(c) If the refinancing or “rolling over” is not at the discretion of the
enterprise.
(d)Subject to no conditions.
A
75. If the pattern in which the economic benefits from the asset are
consumed cannot be predicted reliably, the method of amortization
for an intangible asset should be:
(a) straight line (c) declining balance
(b) output method (d) sum of years’ digits
A
84. Dave started his own cheese factory on March 16, 2003.
Which of the following transactions would not be admissible in
Dave’s accounting system for the month of March?
(e)On March 18, Dave purchased a cow on account for P3,000.
(f) On March 20, Dave sold his cow to a fast food restaurant for
P5,000.
(g)On March 21, Dave contracted with a local radio station to run
several one-minute advertising spots during the month of April.
(h)All of the above transactions would be admissible for Dave’s
accounting system in the month of March.
C
85. Jeff purchased a new register system for his grocery store,
paying P1,000 in cash and issuing a P6,000 note payable for the
balance owed. As a result of this transaction, Jeff’s balance sheet
would reflect:
(a)an increase in assets and an increase in liabilities
(b)a decrease in assets and an increase in liabilities
(c) an increase in assets and a decrease in liabilities
(d)an increase in assets and an increase in owner’s equity
A
BPS/EPS
93) Under PAS 33, EPS disclosures are required for
I. Entities whose ordinary shares or potential ordinary shares are
publicly traded.
II. Entities that are in the process of issuing ordinary shares in the
public market.
a. I only b. II only c. Both I and II
d. Neither I nor II
103) For a company that has only ordinary share outstanding , total
shareholder’s equity divided by the number of shares outstanding
represents the:
a. return on equity
c. stated value per
share
b. book value per share
d. price-earnings ratio
Sharebased
105) The entity has issued a range of share options to employees. In
accordance with PFRS 2, what type of share-based payment
transaction does this represent?
a. Equity-settled share-based payment transaction
b. Asset-settled share-based payment transaction
c. Cash-settled share-based payment transaction
d. Liability-settled share-based payment transaction
c. Equity
b. A noncurrent asset
d. A
liability
108) An entity has entered into a contract with another entity. The
latter will supply the former with a range of services. The payment
for those services will be in cash and based upon the price of
former’s ordinary shares on completion of the contract. In
accordance with PFRS 2, what type of share-based payment
transaction does this represent?
a. Asset-settled share-based payment transaction
b. Cash-settles share-based payment transaction
c. Liability-settled share-based payment transaction
d. Equity-settled share-based payment transaction
110) Under PFRS 2 share – based Payment, the method that must
be used to measure employee stock options and other payments
given to employees in the form of equity securities, is:
a. Initial cost
c.
Fair value
b. Discounted cash flows
d. Selling price
111) Many shares and most share options are not traded in an active
market. Therefore, it is often difficult to arrive at a fair value of the
equity instruments being issued. Which of the following option
valuation techniques should not be used as a measure of fair value
in the first instance?
a. Black – Scholes model
c. Monte – Carlo model
b. Binomial model
d. Intrinsic
value
112) It is the difference between the fair value of the shares to which
the counterparty has the right to subscribe and the price the
counterparty is required to pay for those shares.
a. fair value
c. Market value
b. Intrinsic value
d.
Book value
SHE
117) Under IFRIC 17, a property dividend declared before the end of
the reporting period should be recognized as liability at the end of
the reporting period at
a. Carrying amount of the asset to be distributed
b. Fair value of the asset on the date of declaration
c. Fair value of the asset at the end of reporting period
d. Fair value of the asset at the date of distribution
119) Gains and losses on the purchase and resale of treasury stock
may be only be reflected in
a. Paid-in capital accounts
b. Paid-in capital and retained earnings accounts
c. Income, paid-in capital and retained earnings
d. Income and paid-in capital accounts
121) Which of the following statements best describes the net effect
on retained earnings of the purchase and subsequent sale of
treasury stock?
a. retained earnings may never be increased , but sometimes
decreased.
b. Retained earnings may never be increased or decreased
c. Retained earnings may be increased but never be
decreased.
d. Retained earnings account is always affected unless the selling
price is exactly equal to cost
122) When stock rights are exercised, how much should be treated
as total proceeds from the issuance of shares?
a. only the consideration received
b. The total of the consideration received and the amount previously
recorded for the stock rights
c. the amount previously recorded for the stock rights
d. The total par value of the shares
Income taxes
d. Cash
132) Under PAS 12 Income Taxes, deferred tax assets and liabilities
are measured at the tax rates that:
a. Applied at the beginning of the reporting period
b. At the end of the reporting period
c. At the rates that prevail at the reporting date
d. Are expected to apply when the asset or liability is settled
Benefits
141) Which of the following is not one of the six components of
pension expense (or part of a component)?
a. Initial transition asset
b. Amortization of unrecognized gain or loss
c. Expected return on plan assets
d. Growth (interest cost) in PBO/ABO since the beginning of the
period
d. Value in use
c. Either I or II irrevocably
b. II only
d. Either I or II revocably
150) For a defined benefit pension plan, the discount rate used to
calculate the projected benefit obligation is determined by the
Expected return on plan asset Actual return on plan
asset
a. yes yes
b. no no
c. yes no
d. no yes