Professional Documents
Culture Documents
Quiz Bee Pa1 & Toa Difficult
Quiz Bee Pa1 & Toa Difficult
ND
2 Annual Regional Convention 2008
QUIZ BEE – PA1 & TOA
DIFFICULT ROUND
1. During the year ended 31 December 20X8 the following events occurred at
The Gosling Company:
(1) It was decided to write off PHP80,000 from inventory which was over two
years old as it was obsolete.
(2) Sales of PHP60,000 had been omitted from the financial statements for
the year to 31 December 20X7.
According to IAS8 Accounting policies, changes in accounting estimates and
errors, how much should be shown as a prior period adjustment in Gosling's
financial statements for the year to 31 December 20X8?
A PHP60,000
B PHP140,000
C PHP80,000
D PHP20,000
Question 7 - A
The correct answer is PHP60,000. IAS8 para 32's list of examples of changes
in accounting estimates includes inventory obsolescence.
3. How should trade discounts be dealt with when valuing inventories at the
lower of cost and net realizable value (NRV) according to IAS2 Inventories?
(select one answer)
A Added to cost
B Ignored
C Deducted in arriving at NRV
D Deducted from cost
Question 7 - D
Trade discounts should be deducted from cost. See IAS2 para 11.
10.The Rattigan Company purchases PHP20,000 of bonds. The asset has been
designated as one at fair value through profit and loss. One year later, 10% of
the bonds are sold for PHP4,000. Total cumulative gains previously recognized
in Rattigan's financial statements in respect of the asset are PHP1,000. In
accordance with IAS39 Financial instruments: recognition and measurement,
what is the amount of the gain on disposal to be recognized in profit or loss?
A PHP1,900
B PHP900
C PHP2,000
D PHP1,000
Question 27 - A
PHP1,900 (PHP4,000 – (10% × (PHP20,000 + PHP1,000))) is the correct answer.
IAS39 para 27 states that on derecognition of part of a financial instrument:
(a) there shall be an allocation of the carrying amount between the part derecognized
and the part retained
(b) the difference between the consideration received and the carrying
amount allocated to the part derecognized shall be recognized in profit or loss.
The previous gains had already been recognized in profit or loss and so are
not included in the calculation.
See IAS39 para 46 and AG67.