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SUCCEED REVIEW CENTER


THEORY OF ACCOUNTS
Final Pre-Board Examination
Multiple Choice: Select the best answer from the given choices and write it down on your answer sheet.
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Compensation cost for a share-based payment to employees that is classified as a liability is measured at
a. The change in fair value of the instrument for each reporting period.
b. The total fair value at grant date.
c. The present value of cash payments due over the life of the grant.
d. The actual cash outlay for the period.
In determining diluted EPS, dividends on nonconvertible cumulative preference shares should be
a. Disregarded
b. Added back to net income whether declared or not
c. Deducted from net income only if declared
d. Deducted from net income whether declared or not
The College of Medicine charges its students a total tuition for the current year of P100 million. However, financial aid equal to P15
million is also awarded. It is a private not-for-profit organization. How is this P15 million to be reported in the financial statements?
a. As an unrestricted expense
c. As a restricted expense
b. As a direct deduction to the tuition fee revenue figure
d. As a direct reduction to unrestricted net assets
Which of the following is an enhancing quality that relates to both relevance and faithful representation?
a. Confirmatory value
c. Verifiability
b. Cost benefit relationship
d. Completeness
Which of the following is true about financial statement requirements?
a. Prior year comparative financial statements are required.
b. Income statements for three years are required.
c. Statement of financial position for three years are required
d. There are no specific requirements regarding comparative financial statements
Which of the following inventory is not valued at the lower of cost or net realizable value?
a. Manufactured inventory
c. Biological inventory
b. Retail inventory
d. Industrial inventory
Which of the following is not represented in the FRSC?
a. Board of Accountancy
c. Social Security Services
b. Banko Sentral ng Pilipinas
d. Bureau of Internal Revenue
Justification for the method of determining periodic deferred tax expense is based on the concept of
a. Matching of periodic expense to periodic revenue.
b. Objectivity in the calculation of periodic expense.
c. Recognition of asset and liability.
d. Consistency of tax expense measurement with actual tax planning strategies.
Interest cost under a defined benefit plan represents the
a. Amortization of past service cost.
b. Increase in the fair value of plan assets due to the passage of time.
c. Increase in the projected benefit obligation due to the passage of time.
d. Shortage between the interest income and actual return on plan assets.
Which area of public accounting means the examination of financial statements by a CPA for the purpose of expressing an opinion
as to the fairness of the financial statements?
a. Internal auditing
c. External auditing
b. Taxation
d. Management advisory services
Comparability of financial information depends on which of the following
a. Consistency of accounting policies
b. Regular reporting periods
c. Consistency of accounting policies and regular reporting periods
d. Neither consistency nor regular reporting periods
The work sheet of Eton Company shows Income Tax Expense of P90,000 and Income Tax Payable of P90,000 in the Adjustments
columns. What will be the ultimate disposition of these items on the work sheet?
a. Income Tax Expense will appear as a debit of P90,000 and Income Tax Payable as credit in the Balance Sheet
columns.
b. Income Tax Expense will appear as a debit of P90,000 and Income Tax Payable as credit in the Income Statement
columns.
c. Income Tax Expense will appear as a debit of P90,000 in the Balance Sheet columns and Income Tax Payable as
credit in the Income Statement columns.
d. Income Tax Expense will appear as a debit of P90,000 in the Income Statement columns and Income Tax Payable as
credit in the Balance Sheet columns.
To meet the objective of providing information about financial position, financial performance and cash flows of an entity, financial
statements shall provide information about all of the following, except
a. Assets, liabilities and equity
c. Cash flows.
b. Income expenses, including gains and losses.
d. Nature of the business activities.
The accrued balance in an expense account represents an amount that is
a. Incurred and paid
c. Unincurred and not paid
b. Unincurred and paid
d. Incurred and not paid
An income statement format where the expenses are classified using cost of sales, selling activities, administrative activities and
other operating activities.
a. Nature of expense method.
c. Classification of expense method.
b. Function of expense method.
d. Appropriate grouping of expense method
Which of the following best describes the conditions that must be present for the recognition of revenue?
a. The revenue must be earned, measurable and collected.
b. The revenue must be measurable and collectible.
c. The revenue must be earned and collectible.
d. The revenue must be earned, measurable and collectible.
Which of the following statements is incorrect in relation to the fair value option of measuring note payable?
a. At initial recognition, an entity may irrevocably designate the note payable as at fair value through profit or loss.
b. At initial recognition, an entity may irrevocably designate the note payable as at fair value through other comprehensive
income.

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The interest expense on the note payable is recognized using the stated rate.
After initial recognition, the note payable is remeasured at fair value at every year-end and any changes in fair value are
recognized in profit or loss.
There is substantial modification of terms of an old financial liability if the gain or loss on extinguishment is
a. At least 10% of the carrying amount of the old liability
b. Less than 10% of the carrying amount of the old liability
c. At least 10% of the new liability
d. Less than 10% of the new liability
For the sale to be highly probable, a non current asset or component of an entity is classified as held for sale when
a. It is actively marketed for sale at an reasonable price in relation to its current replacement cost.
b. It is actively marketed for sale at an reasonable price in relation to its book value.
c. It is actively marketed for sale at an reasonable price in relation to its current fair value.
d. It is actively marketed for sale at an reasonable price in relation to its recoverable amount.
If the fair value less cost to sell is higher than the carrying amount of a noncurrent asset classified as held for sale, the difference is
a. Not accounted for
c. Deferred gain as a component of equity
b. Accounted for as an impairment loss
d. Gain to be recorded in profit or loss
An entity identified four industry segments as reportable out of a total eight business components based on identifiable asset
criterion. The total company sales excluding intersegment sales amounted to P20 million for the year, and the sum of the sales for
the four identified reportable segments is P13 million. Given these facts, the company
a.
Is not required to report on a segmental basis.
b.
Must disclose only the four reportable segments.
c.
Must identify one or more additional segments for segmental disclosure purposes.
d.
Treat all business components as reportable.
Segment revenue includes all of the following, except
a. Sales to external customers
b. Interest and dividend income when the segments operations are primarily of a financial nature.
c. Gains on sale of investments
d. Sale to other segments
A related party transaction is a transfer of resources or obligations
a.
Between related parties when a price is charged
b.
Between related parties, regardless of whether a price is charged
c.
Between unrelated parties when a price is charged.
d.
Between unrelated parties, regardless of whether a price is charged.
Which of the following statements is false?
a. Not all items included in cash constitute legal tender
b. Cash may be offset against a liability if the deposit of funds in a restricted account clearly constitutes the legal discharge of the
liability
c. Petty cash fund of P 5,000 composed of currency and coins of P1,400 and unreplenished petty cash vouchers of P3,600
should be shown in the current asset section at P1,400 only.
d. Marketable securities and commercial papers may be shown as part of cash provided this is disclosed
When a full set of general-purpose financial statements is presented, comprehensive income and its components should
a. Appear as a part of discontinued operations.
b. Be reported net of related income tax effect, in total and individually.
c. Appear in a supplemental schedule in the notes to financial statements.
d. Be displayed in a statement that has the same prominence as other financial statements
When an entity decided to sell a business component, the gain on the disposal should be
a. Presented as other income.
b. Presented as an adjustment to retained earnings.
c. Netted against the loss from operations of the component as a part of discontinued operations.
d. None of these.
Which of the following is not an objective evidence of impairment of a financial asset?
a. Significant financial difficulty of the issuer.
b. A decline in the fair value of the financial asset below the previous carrying amount.
c. A breach of contract, such as a default or delinquency in interest or principal payment.
d. The lender, for economic or legal reason relating to the borrowers financial difficulty, grants to the borrower a concession that
the lender would not otherwise consider.
When using the periodic system, which of the following generally would not be separately accounted for in the computation of cost
goods sold?
a. Trade discounts applicable to purchases during the period
b. Cash discounts taken during the period
c. Purchase returns and allowance of merchandise during the period
d. Cost of transportation for merchandise purchased during the period.
A proof of cash would be useful for
a. Discovering cash receipts that have not been recorded in the journal
b. Discovering time lag in making deposits
c. Discovering cash receipts that have been recorded but not deposited
d. Discovering inadequate separation of incompatible duties of employees
Debit balances in accounts payable should be classified as
a. Current liabilities
c. Deduction from accounts payable
b. Current assets
d. Accounts receivable
If the present value of a note issued in exchange for a property is less than the face amount, the difference shall be
a. Included in the cost of the asset
b. Amortized as interest expense over the life of the note
c. Amortized as interest expense over the life of the asset
d. Included in interest expense in the year of issuance.
At the beginning of the current year, a lessee signs a 7-year lease for equipment having a 10-year economic life. The present value
of the monthly lease payments equaled 80% of the equipments fair value. The lease agreement provides for neither a transfer of
title to the lessee nor a bargain purchase option. In the current years income statement, the lessee shall report
a. Rent expense equal to the payments in the current year.
b. Rent expense equal to the lease payments in the current year less interest expense
c. Lease amortization equal to one-tenth of the equipment fair value
d. Lease amortization equal to one-seventh of 80% of the equipment fair value

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33. The excess of the fair value of leased property at the inception of the lease over the carrying amount shall be recognized by the
dealer lessor as
a. Unearned income from a sales type lease
b. Unearned income from a direct financing lease
c. Manufacturer profit from a sales type lease
d. Manufacturer profit from a direct financing lease
34. An exception to the general rule that costs should be charged to expense in the period incurred is
a. Factory overhead costs incurred on a product manufactured but not sold during the current period.
b. Interest costs for financing of inventories that are routinely manufactured in large quantities on a repetitive basis.
c. General and administrative fixed costs incurred in connection with the purchase of inventory.
d. Sales commission and salary costs incurred in connection with the sale of inventory.
35. Why is inventory included in the computation of net income?
a. To determine cost of goods sold
b. To determine sales revenue
c. To determine merchandise returns
d. Inventory is not included in the computation of net income
36. What is the effect of freight in on the cost-retail ratio when using the conservative retail method?
a. Increases the cost-retail ratio
c. Depends on the amount of the net markups
b. No effect on the cost-retail ratio
d. Decreases the cost-retail ratio
37. If an associate has outstanding cumulative preference shares, the investor computes its share of the profit or loss of the associate
a. Without regard to the preference dividends
b. After deducting the preference dividends only when declared.
c. After deducting the preference dividends whether declared or not.
d. After adding the preference dividends whether declared or not.
38. An investment is associate that is acquired and held exclusively with a view to its disposal within twelve months from acquisition
shall be accounted for
a. As held for sale
c. As nonmarketable financial asset
b. As available for sale security
d. Using the equity method
39. The following amounts shall be recognized in profit or loss with respect to investment property under the fair value model, except
a. Rental income from investment property
b. Net gains or losses from fair value adjustments
c. Direct operating expenses arising from investment property that generated rental income during the period
d. Direct cost on the acquisition
40. Which of the following would not be considered a provision?
a. Warranty liabilities
c. Income taxes payable
b. Bad debts or doubtful accounts
d. Note payable
41. Upon the death of an officer, an entity received the proceeds of a life insurance policy held by the entity on the officer. The policys
cash surrender value had been recorded at the time of payment. What amount of revenue should be reported?
a. Proceeds received
c. Proceeds received plus cash surrender value
b. Proceeds received less cash surrender value
d. None
42. An entity using the composite depreciation method for its fleet of trucks, cars, and campers retired one of the trucks and received
cash from a salvage entity. The net carrying amount of these composite asset accounts would be decreased by the
a. Cash proceeds received and original cost of the truck.
b. Cash proceeds received.
c. Original cost of the truck less the cash proceeds.
d. Original cost of the truck.
43. An entity signed an agreement with another entity which requires that if the latter does not meet certain contractual obligations, it
must forfeit land to the former. How should the former report the land?
a. As an investment property
b. As a contingent current asset
c. In a note disclosure if the economic benefits are probable
d. As a contingent asset and other comprehensive income for the period.
44. The primary purpose of a quasi reorganization is to give an entity the opportunity to
a. Obtain relief from creditors
b. Revalue understated assets to their fair value
c. Eliminate the deficit in retained earnings
d. Distribute the shares of a newly created subsidiary to shareholders
45. In accounting for sales on consignment, sales revenue and the related cost of goods sold should be recognized by the
a. Consignor when the goods are shipped to the consignee.
b. Consignee when the goods are shipped to the third party.
c. Consignor when notification is received the consignee has sold the goods.
d. Consignee when cash is received from the customer.
46. Which of the following is not relevant in determining value in use?
a. The expected future cash flows from the asset.
b. The carrying amount of the asset.
c. Expectation about possible variation in the amount and timing of future cash flows.
d. The time value of money
47. The most common method of recording depletion is
a. Percentage depletion method
c. Straight line method
b. Diminishing charge method
d. Units of production method
48. Which of the following is not part of depletable cost?
a. Acquisition cost of the mineral resource deposit
b. Exploration cost
c. Tangible equipment cost associated with machinery used to extract the mineral resource
d. Intangible development cost such as drilling, tunnel and shaft
49. Proper application of accounting principles is most dependent upon the
a. Existence of specific guidelines
b. Oversight of regulatory bodies
c. External audit function
d. Professional judgment of the accountant
50. One element of the objective of financial reporting is to provide information
a. About the investors in the entity
b. About the liquidation value of the resources of the entity

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c. That is useful in assessing cash flow prospects
d. That will attract new investors
51. International financial reporting interpretations issued by IFRIC
a. Are considered authoritative and must be followed.
b. Cover newly identified financial reporting issues not specifically addressed.
c. Cover issues where unsatisfactory or conflicting interpretations have developed.
d. All of those are correct regarding international financial reporting interpretations.
52. Which of the following criteria must be met before an event should be recorded?
a. The event must be an arm's-length transaction.
b. The event must be repeatable in a future period.
c. The event must be measurable in financial terms.
d. The event must be disclosed in the notes.
53. All of the following are reported as investments, except
a. Bonds, ordinary shares and long-term notes
c. Pension fund
b. Noncontrolling interest
d. Nonconsolidated subsidiaries
54. Which of the following characteristics may result in the classification of a liability as current?
a. Short-term obligations refinanced with long-term debt at the end of reporting period
b. Debts to be liquidated from funds that have been accumulated and are reported as noncurrent
c. Violation of provisions of a debt agreement
d. Obligations for advance collections that involve long-term deferment of the delivery of goods
55. The occurrence that most likely would have no effect on net income is
a. Sale in the current year of an equipment contributed by a shareholder in a prior year.
b. Collection in the current year of a dividend from an investment.
c. Correction of an error in previously issued financial statement
d. Patent deemed worthless in the current year
56. The noncontrolling interest in the income statement is shown
a. Below net income
c. Above other income and expenses
b. Below income from operations
d. Above income tax
57. Which is the reason why entities are permitted to change accounting policy?
a. The change would allow the entity to present a more favorable profit picture.
b. The change would result in the financial statements providing more reliable and relevant information about financial
position, financial performance and cash flows
c. The change is made by the internal auditor.
d. The change will be long-term.
58. An example of a correction of an error in previously issued financial statement is a change
a. From FIFO to average method of inventory valuation
b. In the service life of property, plant and equipment
c. From cash basis to accrual basis of accounting
d. In the tax assessment related to a prior period
59. An operating segment is reportable if
a. The operating profit is 10% or more of the combined operating profit of profitable segments.
b. The operating loss is 10% or more of the combined operating loss of nonprofitable segments.
c. The operating profit or loss is 10% or more of the entitys combined operating profit or loss.
d. None of these
60. Which concept relates to using the allowance method in accounting for accounts receivable?
a. Bad debt expense is an estimate that is based on historical and prospective information.
b. Bad debt expense is based on the actual amounts determined to be uncollectible.
c. Bad debt expense is an estimate that is based only on an aging of the accounts receivable.
d. Bad debt expense is management determination of which accounts will be sent to the attorney for collection.
61. Held for collection investments are reported at
a. Acquisition cost
c. Maturity value
b. Amortized cost
d. Fair value
62. When an entity holds between 20% and 50% of the outstanding ordinary shares of an investee, which of the following statements
applies?
a. The investor should always use the equity method.
b. The investor should use the equity method unless circumstances indicate that it is unable to exercise significant influence
over the investee.
c. The investor must use the fair value method unless it can clearly demonstrate the ability to exercise significant influence over
the investee.
d. The investor should always use the fair value method.
63. Interest earned on specific borrowings for a qualifying asset
a. Reduces the cost of the qualifying asset
b. Reduces interest expense reported in the income statement
c. Increases equity in the period earned
d. All of these are correct
64. The intangible asset goodwill may be
a. Capitalized only when purchased
b. Capitalized either when purchased or created internally
c. Capitalized only when created internally
d. Written off directly to retained earnings
65. A short-term note payable with no stated rate of interest should be
a. Recorded at maturity value
b. Recorded at face amount
c. Discounted to its present value
d. Reported separately from other short-term notes payable
66. Which of the following is a correct statement of one of the capitalization criteria for leases?
a. The lease transfers ownership of the property to the lessor.
b. The lease contains a purchase option.
c. The lease term is equal to or more than 75% of the estimated economic life of the leased property.
d. The minimum lease payments excluding executory costs equal or exceed 90% of the fair value of the leased property.
67. Which of the following statements characterizes a sales type lease?
a. The lessor recognizes only interest revenue over the life of the asset.
b. The lessor recognizes only interest revenue over the lease term.

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c. The lessor recognizes a dealer profit at lease inception and interest revenue over the lease term.
d. The lessor recognizes a dealer profit at lease inception and interest revenue over the asset life.
68. Recognizing tax benefit in a loss year due to a loss carryforward requires
a. Only a footnote disclosure.
c. Creating a deferred tax asset.
b. Creating a new carryforward for the next year.
d. Creating a deferred tax liability.
69. What are compensated absences?
a. Unpaid time off
c. Payroll deductions
b. A form of healthcare
d. Paid time off
70. When the net method is used to record sales and accounts receivable, collections subsequent to the discount period shall be
recorded as
a. An addition to sales for the current period
b. As other income
c. Deduct the entire collection from the current accounts receivable balance
d. Additional sales discount
71. Which of the following would not be reported as inventory?
a. Land acquired for resale by a real estate firm
b. Stocks and bonds held for resale by a brokerage firm
c. Partially completed goods held by a manufacturing company
d. Machinery acquired by a manufacturing company for use in the production process
72. The difference between the cost of a biological asset and its fair value less cost of disposal at initial recognition should be included
in
a. The net profit or loss for the period.
c. A separate revaluation reserve.
b. The statement of recognized gains and losses.
d. A capital reserve within equity.
73. Which of the following shareholder rights is most commonly enhanced in an issue of preference shares?
a. The right to vote for the board of directors.
b. The right to maintain one's proportional interest in the corporation.
c. The right to receive a full cash dividend before dividends are paid to other classes of
share capital.
d. The right to vote on major corporate issues.
74. Prospective financial information is defined as
a. Any financial information about the past, present or future.
b. Any financial information about the present or future.
c. Any financial information about the future related to the day to day operations.
d. Any financial information about the future.
75. When an entity issued bonds with share warrants, the amount of share premium is
a. Zero
b. The excess of the proceeds over the face amount of the bonds
c. Equal to the fair value of the share warrants
d. The excess of the proceeds over the fair value of the bonds
76. The distribution of share rights to existing ordinary shareholders will increase share premium at
a. The date of issuance of rights
c. The date of expiration of rights
b. The date of exercise of rights
d. All of these are correct
77. On December 31, 2015, an entity carried a receivable from a major customer. The authorization date of the financial statements
is on February 16, 2016. The customer declared bankruptcy on February 15, 2016. The entity should
a. Disclose the fact that the customer has declared bankruptcy
b. Make a provision for this event in its financial statements as opposed to a disclosure
c. Ignore the event and wait for the outcome of the bankruptcy because the event took place after the yearend.
d. Reverse the sale pertaining to this receivable in the comparative statement for the prior period.
78. Amos Company went to court this year and successfully defended the brand name of its product, "Fruity Tootsie" from infringement
by a competitor. The cost of this defense should be charged to
a. Patents and amortized over the legal life of the patent.
b. Legal fees and amortized over 10 years or less.
c. Expenses of the period.
d. Trademarks and amortized over a period not to exceed 40 years.
79. The configuration of cash flows of the assets exchanged includes which of the following?
a. The implicit interest rate, maturity of loan and amount of loan.
b. The risk, timing and amount of cash flows of the assets.
c. The entity-specific value of the asset which is equal to fair value.
d. The estimated present value of the assets exchanged.
80. The major difference between the service life of an asset and physical life is that
a. Service life refers to the time an asset will be used by an entity and physical life refers to how long the asset will last.
b. Physical life is the life of an asset without consideration of residual value and service life requires the use of residual value.
c. Physical life is always longer than service life.
d. Service life refers to the length of time an asset is of use to the original owner while physical life refers to how long the asset
will be used by all owners.
81. When an entity purchases land and a building and immediately tears down the building, the cost incurred to tear down the building
is
a. Expensed immediately
b. Added to the cost of the plant
c. Added to the cost of the land
d. Allocated to the cost of the plant and cost of the land on a prorata basis.
82. In the case of grant related to an asset, which accounting treatment is prescribed?
a. Record the grant at a nominal value in the first year and write it off in the subsequent year.
b. Either as deferred income or deduction from the carrying amount of the asset.
c. Record the grant at fair value in the first year ad take it to income in the subsequent year.
d. Take it to income immediately.
83. Assets that qualify for interest capitalization include
a. Assets under construction for an entitys own use.
b. Assets that are ready for their intended use.
c. Assets that are not currently being used because of excess capacity.
d. All of these assets qualify for interest capitalization.
84. Which of the following statements conforms to the realization concept?
a. Equipment depreciation was assigned to a production department and then to product unit cost

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b. Depreciated equipment was sold in exchange for a note receivable
c. Cash was collected on accounts receivable
d. Product unit costs were assigned to cost of goods sold when the units were sold.
85. Costs that can be reasonably associated with specific revenue but not with specific products should be
a. Charged to expense in the period incurred.
b. Allocated to specific products based on the best estimate of the product processing time.
c. Expensed in the period in which the related revenue is recognized.
d. Capitalized and then amortized over reasonable period.
86. Which of the following should be disclosed in the summary of significant accounting policies?
a. Refinancing of debt subsequent to the end of reporting period
b. Guarantees of indebtedness of others
c. Criteria for determining which investments are treated as cash equivalents
d. Adequacy of pension plan assets relative to vested benefits
87. Which of the following attributes would not be used to measure inventory?
a. Historical cost
c. Net realizable value
b. Current replacement cost
d. Present value of future cash flows
88. An investor uses the cost method to account for investment in ordinary shares. Dividends received in excess of the investors
share of investees earnings subsequent to the date of investment
a. Increase other comprehensive income
c. Increase the investment account
b. Decrease the investment account
d. Increase dividend revenue
89. An entity sold refundable merchandise coupons. The entity received a certain amount for each coupon redeemable for merchandise
with a certain retail price. How should the entity initially report these coupon transactions?
a. Unearned revenue at the merchandise retail price
c. Revenue at the merchandise retail price
b. Unearned revenue at the cash received
d. Revenue at the cash received
90. An entity sells appliances that include a three-year warranty. Based on experience, warranty costs are expected to be incurred for
each machine sold. When should the entity recognize these warranty costs?
a. Evenly over the life of the warranty
c. When payments are made to the mechanic
b. When the service calls are performed
d. When the machines are sold
91. An appropriation of retained earnings for future plant expansion results in
a. The establishment of a fund to help finance future plan expansion.
b. The setting aside of cash to be used for future plant expansion.
c. A decrease in cash with an equal increase in investments.
d. The disclosure that management does not intend to distribute in the form of dividends assets equal to the amount of the
appropriation.
92. Which is the reason why the specific identification method may be considered ideal?
a. The potential for manipulation of income is reduced.
c. The cost flow matches the physical flow.
b. There is no arbitrary allocation of cost.
d. It is applicable to all types of inventory.
93. An entity has preference shares in issue that are redeemable mandatorily on December 31, 2015. How should the preference
shares be presented on December 31, 2014?
a. Noncurrent liability
c. Equity
b. Current liability
d. Reserves
94. Supplemental disclosures required only when the statement of cash flows is prepared using the indirect method include
a. A schedule reconciling net income with net cash flows from operating activities.
b. Amounts paid for interest and taxes.
c. Amounts deducted for depreciation and amortization.
d. Significant noncash investing and financing activities.
95. In preparing consolidated financial statements of a Philippine parent company with a foreign subsidiary, the foreign subsidiarys
functional currency is the currency
a. In which the subsidiary maintains its accounting records.
b. Of the country in which the subsidiary is located.
c. Of the country in which the parent is located.
d. Of the environment in which the subsidiary primarily generates and expends cash.
96. What are the classifications of expenses under NGAS?
a. Personal services and maintenance and other operating expenses
b. Personal services and financial expenses
c. Maintenance and other operating expenses and financial expenses
d. Personal services, maintenance and other operating expense, and financial expenses
97. Consolidated financial statements are typically prepared when one entity has a controlling financial interest in another, unless
a. The subsidiary is a finance entity
b. The fiscal year-ends of the two entities are more than three months apart
c. Such control is likely to be temporary
d. The two entities are in unrelated industries
98. The if converted method of computing earnings per share assumes conversion of convertible bonds payable and convertible
preference shares at the
a. Beginning of the earliest period reported or at time of issuance, if later.
b. Beginning of the earliest period reported regardless of time of issuance.
c. Middle of the earliest period reported regardless of the time issuance
d. Ending of the earliest period reported regardless of the time of issuance
99. Goodwill should be tested periodically for impairment
a. For the entity as a whole
c. At the industry segment level
b. At the subsidiary level
d. At the operating segment level or one level below
100.The straight-line method of depreciation shall be used for government property, plant and equipment and a 10% residual value
shall be set up. What is the estimated useful life of government buildings that are predominantly wood, mixed wood and concrete,
predominantly concrete?
a. 15 years, 20 years and 25 years, respectively
c. 10 years, 25 years and 40 years, respectively
b. 5 years, 15 years and 30 years, respectively
d. 10 years, 20 years and 30 years, respectively
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