1. The moving average inventory cost flow method is applicable to which of the following inventory systems?

Periodic Perpetual a. Yes Yes b. Yes No c. No No d. No Yes 2. For a nonmonetary exchanged, the configuration of cash flows includes which of the following? a. The entity-specific value of the asset b. The estimated present value of the assets exchanged c. The risks, timing and amount of cash flows of the asset d. The implicit, maturity date of loan and amount of loan 3. An entity purchase a building and the seller accepts payments partly in equity shares and partly in debentures of the entity. This transaction should be treated in the cash flow statement as follows: a. This does not belong in a cash flow statement and should be disclosed only in the notes to the financial statements. b. The purchase of the building should be investing cash outflow and the issuance of shares and the debentures financing cash outflows. c. Ignore the transaction totally since it is a non-cash transaction. No mention is required in either the cash flow statement or in the notes to the financial statements. d. The purchase of the building should be investing cash outflow and the issuance of debentures financing cash outflows while the issuance of shares investing cash outflow. 4. Under PAS 34, which of the following statements is true? a. An interim financial report may consist of a complete set of financial statements. b. An interim financial report may consist of a complete set of financial statements or condensed set of financial statement with selected notes. c. A complete set of financial statements is required at interim reporting date. d. A condensed set of financial statements with selected notes is required at interim date. 5. Which of the following disclosures of pension plan information would not be required? a. the major components of pension expense b. the rate used in measuring the benefit amount c. the amount of past service cost charged in previous years

d. The funded status of the plan and the amounts recognized in the financial statements 6. In a periodic inventory system which uses the FIFO cost flow method, the cost of goods available for sale is net purchases a. Plus the ending inventory. c. Minus the ending inventory. b. Plus the beginning inventory d. Minus the beginning inventory. 7. Where there is a lease of land and building and the title to the land is not transferred, generally the lease is treated as if a. the land is a finance lease and the building is a finance lease. b. the land is a finance lease and the building is an operating lease c. the land is an operating lease and the building is a finance lease d. the land is an operating lease and the building is an operating lease 8. Domino Farms uses the allowance method of accounting for uncollectible accounts. In 19-8, they charged to uncollectible accounts expense P50,000 and wrote off as uncollectible accounts receivable P30,000. These transactions decreased the working capital by (m.c.) a. P50,000 b. P30,000 c. P80,000 d. P20,000 9. Accounts receivable which are sold outright to a financing company on a without recourse basis are said to have been

a. Pledged. c. Factored. b. Assigned. d. Collateralized.

10. Which of the following should be expensed as incurred by the franchise for a franchise with an estimated useful life of ten years? a. Amount paid to the franchisor for the franchise b. Periodic payments to a company, other than franchisor, for that company's franchise c. Legal fees paid to the franchisee's lawyers to obtain the franchise d. Periodic payments to the franchisor based on the franchisee's revenues. 11. Which of the following statements about the capitalization of borrowing costs as part of the cost of qualifying asset is true? a. Capitalization always continues until the asset is brought into use. b. Capitalization always commences as soon as expenditure of the asset is incurred. c. Capitalization always commences as soon as interest on relevant borrowings is being incurred. d. if funds come from general borrowings, the amount to be capitalized is based on the weighted average cost of borrowing. 12. The Silver Company leased space in a high rise building for a period of five years from October 1, 19- 6. It spent a total of P76,000for office installations in the office space to adapt it to the customers needs. The improvement were to outlast the period of the lease. The improvements were all completed and in use on January 1, 19-7. On the company's financial statements as of December 1, 19-7 and for the year the ended, the amount expended should be shown

a. on the balance sheet as non-current asset at P60,800 and on the income statement as an operating expense at P15,200 b. On the income statement as an operating expense of P76,000 c. On the balance sheet as non-current asset P76,000 d. On the income statement as an operating expense of P15,200 e. Allocated between the income statement and balance sheet- income statement portion appearing as operating expense at P16,000 and the balance sheet portion as noncurrent asset of P60,000 13. Accounting requires the preparation of statements that summarize exchange transactions in terms of some unit of measurement. Revenue is expressed as the number of pesos received or the peso equivalent of the commodities or services received; cost is expressed as the number of pesos paid out or the peso equivalent of the items given up. Fluctuations in the value of the pesos are ignored. The above describes what accounting assumption or principle? a. Going concern c. Unit of measure b. b. Historical cost d. d. Realization 14. What is the principal accounting for a compound instrument? a. The issuer shall classify a compound instrument as a liability in its entirely. b. The issuer shall classify a compound instrument as either a liability or equity. c. The issuer shall classify a compound instrument separately as liability component. d. The issuer shall classify the liability and equity components of a compound instrument separately as liability or equity instrument

15. Which of the following considerations would not be relevant in determining the entity's functional currency? a. The currency that influences the costs of the entity. b. The currency in which finance or funds is generated. c. The currency that is the most internationally acceptable for trading. d. The currency in which receipts from operating activities are retained.

16. Which of the intangible asset should be amortized? (m.c.) a. copyrights d. Trademarks b. Organization costs with unlimited life e. All of the above c. Perpetual franchise

17. Uncertainty and risks inherent in business situations should be adequately considered in financial reporting. This statement is an example of the concept of

a. Conservatism. c. Neutrality. b. Completeness. d. Representational faithfulness

18. Under what circumstances can an entity classify financial assets that meet the amortized cost criteria as at FVPL?

a. Where the instrument is held to maturity b. Where the business model approach is adopted

c. Where the financial asset passes the contractual cash flows characteristics test

d. If doing so eliminates or reduces an accounting mismatch 19. Which of the following is unlikely to be used in fair value measurement of a biological assets? a. quoted price in a market b. external independent valuation c. the most recent market transaction price d. the present value of the expected net cash flows from the assets 20. Which statement is incorrect concerning the situations that would lead to a lease being classified as a finance lease? a. The lease transfers ownership of the asset to the lessee by the end of the lease term. b. The lessee has the option to purchase the asset at a price that is sufficiently lower than the fair value at the date of the inception of the lease. c. The lease term is for the major part of the economic life of the asset even if the title is not transferred. d. At the inception of the lease, the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset.