Professional Documents
Culture Documents
2nd Floor Sommerset Bldg., Lopez Jaena St. Jaro, Iloilo City
Tel. No.: (033) 320-2728; 09106547262
Email Address: a1nursingreviewic@yahoo.com.ph
INSTRUCTIONS:
1. Detach one (1) answer sheet from the bottom of your Examinee ID/Answer Sheet Set.
2. Write the subject title “MANAGEMENT ADVISORY SERVICES” on the box provided.
3. Shade Set Box “A” on your answer sheet if your test booklet is Set A; Set Box “B” if your test booklet is Set B.
__________________________________________________________________________________________
1. The following statements characterized MAS Practice, except:
A. The risk associated to multifarious ongoing changes in business, environment and conditions greatly
contribute in making MAS Practice visibly important.
B. CPA advisors must always maintain Independence and integrity despite so many situations that may
negate their practical applicability.
C. The practice of advisory services is too broad to include those outside the traditional professional
services of CPA’s and allow him to deviate from the general code of professional involves from
problem-solving affecting the future operations of the client.
2. What is one primarily benefit of an enterprise resource planning (ERP) system?
A. It reduces inventory levels.
B. It permits companies to be more streamlined in production.
C. It replaces research and development in a company.
D. It requires an increased emphasis on product quality.
3. Which one of the following is classified as direct labor?
A. Flour in a bakery C. Bottles of cola in a bottling company
B. Wages of factory-janitors D. Coy machine cost of a copy shop
E. 4. What is value chain management best defined as?
A. A large chain that keeps the machines from falling on the production floor
B. Management decisions that affect how quickly the production run occurs
C. The increment value of costs associated with hiring a new production floor leader
D. All activities associated with providing a product or service
F. 5. For what reason is a production cost primarily tracked?
A. To keep with current cost trends to being products to market
B. To effectively allocate the cost of products to measure profitability
C. To determine what amounts are necessary for allocating overhead
D. To keep management’s bonuses increasing every year
G. 6. The following activity and cost data were provided by: Hammer Corp., which would like help in
estimating its future maintenance costs:
H. Units – Maintenance Cost
I. 3 P450
J. 7 P530
K. 11 P540
L. 15 P700
M. Using the least-squares regression method to estimate the cost formula, the expected total cost for an
activity level of 10 units would be closest to;
A. P612.50 C. P595.84
B. P581.82 D. P601.50
A1 PASSERS REVIEW CENTER///1
E. 7. Selected information about Buehler Corporation’s operations at high and at low levels of activity
follow.
F.
G. Level of Activity Low High
H. Number of units produced 25,000 30,000
I. Total manufacturing costs P575,000 P680,000
J. Direct material cost per unit P5 P5
K. Direct labor cost per unit P6 P6
L. Using the high-low method, what is the cost formula for manufacturing overhead?
A. P50,000 per period plus P10 per unit C. P50,000 per period plus P22 per unit
B. P50,000 per period plus P21 per unit D. P347,000 per period plus P0.10 per unit
E. 8. Expected sales for next year for the Jona Division are 120,000 units. Nestor Carey the manager of Jona
Division, is under pressure to improve the performance of the Division. As he plans for next year, he has
decide whether to produce 120,000 units or 140,000 units. The Jona Division will have higher profit, if Nestor
Carey decides to
A. Produce 140,000 units if income is measured under absorption costing.
B. Produce 140,000 units if income is measured under variable costing.
C. Produce 120,000 units if income is measured under absorption costing.
D. Produce 120,000 units if income is measured under variable costing.
F. 9. Which is not true concerning sales mix?
A. Sales mix is the relative percentage in which each product is sold when a company sells more than one
product.
B. Sales mix is important to managers because different products often save.
C. Sales mix does not affect breakeven analysts
D. The computation of weighted average unit contribution margin is useful in sales mix analysis.
G. 10. During the last year, Ruth Company had profit under absorption costing that was P5.500 lower than its
income under variable costing. The company sold 9,000 units during the year, and its variable costs were
P10 per unit, of which Pt was variable setting expense. If fixed production cost is P5 per unit under
absorption costing every year, then how many units did the company produce during the year?
A. 7,525 units. C. 10,100 units.
B. 8,450 units. D. 7,900 units.
E. 11. Last year, Francis Company had 20,000 units in its ending inventory. During the year, Francis variable
production costs were P12 per unit. The fixed manufacturing overhead cost was P8 per unit in the beginning
inventory. The company profit for the year was P9,600 higher under variable costing than it was under
absorption costing. Given these facts, the number of units of product in the beginning inventory last year
must have been:
A. 21,200. C. 18,800.
B. 19,200. D. 19,520
E.
F. Questions 12 through 13 are based on the following information:
G. Jason Company’s variable costing income statement for August appears below:
H. Jason Company
I. Income Statement
J. For the month ended August: 31
K. Sales (P15 per unit) P600,000
L. Less variable costs:
M. Variable cost of goods sold:
N. Beginning inventory P72,000
O. Add variable CGM 315,000
P. Goods available for sale 387,000
Q. Less ending Inventory 27,000
R. Variables cost of goods sold 360,000
S. Total variable costs 80,000
T. Contribution margin 440,000
U. Fixed costs: 160,000
V. Fixed manufacturing 105,000
W. Fixed selling and administrative 35,000
X. Total fixed costs 140,000
Y. Profit P20,000
Z. The company produces 35,000 units each month. Variable production costs per unit and total fixed costs
have remained constant over the past several months.
AA.12. The peso value of the company’s inventory on August 31 under the absorption costing method
would be:
A. P27,000. B. P42,000.
176.
177.
178. 32. Which of the following types of engagements may be undertaken by an auditor in connection with
a corporation’s application for an increase in its authorized capital stock?
I. An engagement to perform agreed-upon procedures regarding-financial information.
II. An engagement to report on supplementary information in connection with an audit of financial
statements.
III. An engagement to report on a specific element, account or item of a financial statement.
A. I and II only. C. II and III only.
B. I and III only. D. I, II, and III.
179. 33. An agreed-upon procedures engagement Is to be performed if the application for increase in
authorized capital stock is filed long after (e.g., more than 120 days) the date of the most recent audited
financial statements submitted to the SEC and even if the application is closed to the most recent
audited financial statements submitted, the corresponding information in such financial statements is
considered by the SEC to be insufficient. (True or False)
180. 34. The auditor may issue a report on supplementary information if
I. The application for increase in authorized capital shock is made on a date close (e.g., 120 days or less)
to the date of the most recent audited financial statements submitted to the SEC.
II. The applicable information in the audited financial statements is considered sufficient by the SEC.
A. I only. C. II only.
B. Neither I nor II. D. Both I and II.
E. 35. Which of the following statements concerning the form and content of Inter-bank confirmations
is Incorrect?
A. The form and content of a confirmation request letter will depend on the purpose for which it is required,
on local practices and on the requesting bank’s account.
B. Not all information for which confirmation is usually sought will be required at the same time.
C. The confirmation request should be prepared in a clear and concise manner to ensure ready
comprehension by the confirming bank.
D. Whenever possible, the confirmation request should be prepared in the language of the requesting bank
or in the language normally used for business purposes.
F. 36. Which of the following are required to be reported by the external auditor to the BSP?
I. Any material finding during the audit involving fraud or dishonesty which will reduce capital funds by at
least one percent (1%).
II. Adjustments or potential losses amounting to at least one percent (1%) of capital funds of the bank.
67. An auditor established a P180,000 tolerable misstatement for an asset with an account balance of
P3,000,000. The auditor selected a sample of every 20th item from the population that represented the
asset account balance and discovered a net overstatement of P10,500 (P11,100 overstatement minus
P600 understatements). Under these circumstances, the auditor most likely would conclude that
A. The asset account is fairly states because the tolerable misstatement exceeds the net of projected
actual overstatement and understatement.
B. The assets account is fairly stated because the total projected misstatement is less than the tolerable
misstatement.
C. There is unacceptably high risk that the actual misstatements in the population exceed the tolerable
misstatement because the total projected misstatement exceeds the tolerable misstatement.
D. There is an unacceptable high risk that the tolerance misstatement is more than the sum of actual
overstatements and understatements.
68.
69.
70. A purpose of a management representation letter is to reduce
A. The possibility of a misunderstanding concerning management’s responsibility for the financial statements.
B. The scope of an auditor’s procedures concerning related party transactions and subsequent events.
C. Audit risk to an aggregate level of misstatement that could be considered material.
D. An auditor’s responsibility to detect material misstatements only to the extent that the letter is relied on.
71. To which of the following matters would materiality limits not apply in obtaining written management
representations?
A. Reductions of obsolete inventory to net realized value.
B. The disclosure of compensating balance arrangements involving related parties.
C. Losses from purchase commitments at prices in excess of market value.
D. The availability of minutes of stockholders’ and directors meetings.
72. An entity’s management is responsible for the preparation and fair presentation of the financial statements.
Its responsibility includes the following except
A.Designing, implementing, and maintaining internal control relevant to the preparation and presentation of
financial statements.
B.Making accounting estimates that are reasonable in the circumstances.
C.Selecting and applying appropriate accounting policies.
D.Assessing the risks of materials misstatement of the financial statements.
73. Sam, CPA was engaged to audit the financial statements of Mantha Corp. after its fiscal year had ended.
The timing of Sam’s appointment as auditor and the start of field work made confirmation of accounts
receivable by direct communication with the debtors ineffective. However, Sam applied other procedures
and was satisfied as to the reasonableness of the account balances. Sam’s auditors most likely contained
a/an
A. Qualified opinion because of a scope limitation.
B. Qualified opinion because of a departure from GAAS.
C. Unmodified opinion.
D. Unmodified opinion with an emphasis of matter paragraph.
74. Under which of the following circumstances would a disclaimer of opinion not be appropriate?
A1 PASSERS REVIEW CENTER///16
A. The financial statements fall to contain adequate disclosure concerning party transactions.
B. The auditor is engaged after fiscal year-end is unable to observe the physical inventories or apply
alternative procedures to verify their balances.
C. The auditor is unable to determine the amounts associated with fraud committed by the clients
management.
D. The client refuses to permit its attorney to furnish-information requested in a letter of audit inquiry.
75. Comparative financial statements include the prior year’s statements that were audited by a predecessor
auditor whose report is not presented. If the predecessor’s report was unqualified, the incoming auditor
should
A. Indicate in the auditor’s report that the predecessor auditor expressed an unqualified opinion.
B. Express an opinion on the currents year’s statement alone and make no reference to the prior year’s
statements.
C. Obtain a letter of presentations from the predecessor auditor concerning any matters that might affect
the incoming auditor’s opinion.
D. Request the predecessor auditor to reissue the prior year’s report.
76. An auditor expressed a qualified opinion on the prior year’s financial statements because of a lack of
adequate disclosure. The financial statements are properly restated in the current year and presented in
comparative from with the current year’s financial statements. The auditor’s updated report on the prior
year’s financial statements should.
A. Make no reference to the type of opinion expressed on the prior year’s financial statements.
B. Express an unmodified opinion on the restated financial statements of the prior year.
C. Be accompanied by the auditor’s original report on the prior year’s financial statements.
D. Continue to express a qualified opinion on the prior year’s financial statements.
77. PSA 800 applies to
A. Review engagements D. Audit of financial statements prepared in
B. Agreed-upon procedures engagements accordance with a special purpose
C. Compilation engagements framework.
78. In an audit of special financial statements, the auditor shall obtain an understanding of
I. The purpose for which the financial statements are prepared.
II. The interior users.
III. The steps taken by management to determine that the applicable financial reporting framework is
acceptable in the circumstances.
A. I and II only. C. I,II, and III.
B. II and III only. D. I and II only.
79. Whenever a report, filed on a printed designed by authorities, calls upon the independent auditor to make an
assertion that the auditor believes is not justified, the auditor should
A. Withdraw from the engagement.
B. Submit the form with questionable items clearly omitted.
C. Reword the form or attach a separate report.
D. Submit a standard report with explanations.
80. An auditor may express an opinion on an entity’s accounts receivable balance event if the auditor has
disclaimed an opinion on the financial statements taken as a whole provided the
A. Report on the accounts receivable is presented separately from the disclaimer of opinion on the financial
statements
B. Auditor also reports on the current asset portion of the entity’s balance sheet
C. Use of the report on the accounts receivable is restricted
D. Report on the accounts receivable discloses the reason for the disclaimer of opinion on the financial statement
81. An auditor may accept an engagement to report on summary financial statements in accordance with PSA 810
on when
A. The auditor has been engaged to conduct an audit in accordance with PSAs of the financial statements from
which the summary financial statements are derived
B. Summary financial statements are distributed only to management and the board of directors
C. Auditor describes the additional review procedures performed on the summary financial statements
D. Summary financial statements are presented in comparative from with the prior year’s summary financial
statement
82. In the auditor’s report on summary financial statements that are derived from an entity’s audited financial
statements, a CPA should indicate that the
A. CPA has audited and expresses and opinion on the complete financial statements
B. CPA expresses limited assurance that the financial statements conform with another comprehensive basis of
accounting
C. Summary financial statements are not fairly presented in all material respects
D. Summary financial statements are prepared in conformity with another comprehensive basis of accounting
83. Which of the following procedures should a practitioner perform during an engagement to review an entity’s
financial statements?
89.
90. A1 PASSERS TRAINING, RESEARCH, REVIEW & DEVELOPMENT COMPANY
91. 2nd Floor Sommerset Bldg., Lopez Jaena St. Jaro, Iloilo City
92. Tel. No.: (033) 320-2728; 09106547262
93. Email Address: a1nursingreviewic@yahoo.com.ph
94.
95. BOARD OF CERTIFIED PUBLIC ACCOUNTANT
96.
97. CERTIFIED PUBLIC ACCOUNTANT Licensure Examination
98.
99. BUSINESS LAW
100.
1. In an obligation to give a determinate thing, what is rights are available to the creditor?
101. First Answer- To compel specific performance
102. Second Answer- To record damages in case of breach of the obligation
103. Third Answer- To ask that the obligation be complied with at the expenses of the labior.
a. All answers are correct c. Only the first answer is correct
b. Only the first and second answers are d. All answers are wrong
correct
2. The following contacts, except one, are void an initio. Which is the exception?
a. That whose object is outside the commerce of men.
b. That whose object did not exist at the time of the transaction.
c. That which contemplates an impossible service.
d. That which is undertaken in fraud of creditors.
3. S, minor, owns a specific property valued at P50,000. B capacitated, by means of fraud induced S to sell
his property to him for P30,000, which S did so. The contact is in writing. Which is correct?
a. the contract is valid and binding from the start
b. the contract remains unenforceable because it falls under the Statute of Frauds.
dv. TAXATION
dw.
1. Spouses A and B sold their family home a capital asset for P5,000,000. It was in 1980 at P2,000,000. The
fair market value as by the BIR is P6,000,000 but the fair market value as shown in the schedule of values
of the City Assessor is P5,500,000. Later, the spouses utilized P4,000,000 for the acquisition of their new
family home. The capital gains tax due is
a. P72,000 b. P60,000 c. P300,000 d. P360,000
2. Using the above data the cost basis of the new family home is
a. P4,000,000 b. P1,600,000 c. P1,000,000 d. P400,000
3. A corporation was merged with B Corporation, G, a stockholder of A Corporation was asked to surrender
his shares of stock of A Corporation which C acquired for P200,000 and in exchanged he received shares
of stock of B Corporation with a fair market value of P220,000 plus cash of P30,000. After the merger, C
later sold his B Corporation shares first P240,000. C will recognize a gain of:
4. Merger Sale
a. P30,000 P40,000
b. P50,000 P20,000
c. P30,000 P30,000
d. P50,000 P40,000
A1 PASSERS REVIEW CENTER///29
5. A transferred his commercial land which he acquired for P10M to B Corporation and as consideration he
received shares of stock of B Corporation with a fair market value of P10.2M and cash of P300,000. As a
result, A acquired control of B Corporation. Two months later, A sold the B Corporation shares for P10.5M.
the gain to be recognized on the transfer and on the sale is
6. Transfer Sale
a. P300,000 P500,000
b. P500,000 P300,000
c. P300,000 P300,000
d. P500,000 P500,000
7. A transferred his land in Manila which he acquired for P2M to B corporation and as consideration received
shares of stock of B Corporation with fair market value of P1.8M and as a result A gained control of B
Corporation. Later, A transferred his land in Makati which he acquired for P3M to C Corporation and as
consideration he received shares of stock of C Corporation with fair market value of P2.7M. even before
the transfer, A already owns 51% of C Corporation outstanding shares. The loss to be recognized by A is
8. B Cor. C Corp.
a. P0 P300,000
b. P0 P0
c. P200,000 P300,000
d. P200,000 P0
9. Use the following information for question 6 and 7.
10. A, sold 3 parcels of land held as capital assets, as follows:
11. Land1 Land2 Land3
12. Selling Price P160,000 P160,000 P160,000
13. Cost 100,000 100,000 100,000
14.
15. Installment Payment:
16. Year 1 (year of sale) 40,000 40,000 40,000
17. 2 120,000 60,000 60,000
18.
19. Assumption of remortgaged 0 60,000 110,000
20. The capital gains tax to be paid in year 1 is:
a. P28,000 c. P19,840
b. P15,840 d. P12,640
21. The capital gains tax to be paid in year 2 is:
a. P12,960 c. P16,160
b. P8,960 d. P19,200
e. Use the following information for questions 8 and 9.
f. A and B are stockholders in corporations which are being consolidated into a new corporation, has the
following data on their shares of stock:
g. A B
h. Consideration received: P75,000 P81,000
i. Fair Market value of shares 5,000 5,000
j. Fair Market value of property 10,000 4,000
k. Cash 80,000 80,000
l. Cost of shares surrendered
m.
22. The gain or (loss) to be recognized by A is
a. P10,000 c. P5,000
b. P15,000 d. 0
23. The gain or (loss) to be recognized by B is
a. P9,000 c. P1,000
b. P10,000 d. P0
24.
25. In 1998, Cadena de Amor Corporation gave the following fringe benefits to its employees
26. To managerial employees ------------------------------------------------ P1,320,000
27. To rank and file employees----------------------------------------------- 5,000,000
28.
29. The allowable deduction from the gross income of the corporation for the benefits given to employees is:
a. P2,000,000 c. P6,320,000
b. P2,148,000 d. P7,000,000
30.
31. A vat taxpayer has the following data for a particular quarter during the current year:
e. Sale of shares of stock: P1,000,000
A1 PASSERS REVIEW CENTER///30
a. P0Held as inventory
f. 500,000 c. P2,500
b. P1,500 g. Held as investment d. P7,500
e. h. Cost of the shares sold: 300,000
32. An invoice
i. is issued for theHeld
saleas
ofinventory
vat taxable goods shows the following: 600,000
f. j. Held as investment (thru local stock exchange)
g. k. Total
The stock
invoice
transaction
amount tax is: P50,400
h. Less: trade discount of 5% 2,520
i. Net P47,880
j.
k. If the vat taxpayer enjoys a partial exemption of 40% including VAT and the amount is VAT inclusive,
how much is the output tax?
a. P3,078 c. P3,447
b. P3,216 d. P3,628
33. A, a vat taxpayer, made the following purchases of capital goods from vat registered sellers for use in his
business (amounts are net of vat) for the 3rd quarter
34.
35. Year 2001 Estimated Life Cost
36. July 10-Machine1 2 years P200,000
37. 16-Machine2 6 years 900,000
38. Aug.8- Machine3 2 years 400,000
39. 20- Machine4 6 years 500,000
40. Sept.14- Machine5 7 years 2,000,000
41.
42. Machine 1 was retired on September 30, 2011. The input tax in July is:
a. P2,800 c. P132,000
b. P108,000 d. P2,200
43.
44. The input tax in August is:
a. P108,000 c. P5,800
b. P3,000 d. P110,800
45. The input tax for September is
a. P4,000 c. P26,000
b. P6,800 d. P27,800
46. The power to tax is exclusively ledged with the legislature but the following exceptions are provided by the
contribution, except:
a. Power of local government units to levy taxes, fees and charges
b. Authority of the President to fix tariff rates, import and export quotes, tonnage wharfage dues and other
duties and imposes.
c. Delegation to administrative agencies of the implementation and collection of taxes.
d. Delegation to private entities the levy and enforcement of tax laws.
47. Statement 1- The prizes received by Manny Pacquiao and Ricky Hatton in their last fight are subject to
Philippine income tax.
48. Statement 2- If the fight between Pacquiao and Cotto is a world championship fight promoted by the
Arum, the gross received will be exempt from percentage tax.
a. True, true c. False, false
b. True, false d. False, true
49. This is an inherent limitation on the power of taxation.
a. The rule on taxation shall be uniform and equitable.
b. No law impairing the obligations of contracts shall be enacted.
c. Charitable institutions, churches, personages or convents appurtenants thereto, mosque and non-profits
cemeteries and all kinds of lands, buildings and improvements actually, directly and exclusively used for
religious or charitable purposes shall be exempt from taxation.
d. The tax laws cannot apply to the property of foreign governments.
50. This is a constitutional limitations on the power of taxation
a. The power of taxation cannot be delegated.
b. The power of taxation is limited to the territorial jurisdiction of the taxing state.
c. No person shall be imprisoned for debt or non-payment of a poll tax.
d. Exemption of government instrumentalities and agencies through which the government exercised
sovereign powers from taxation.
51. Taxation as distinguished from police power and eminent domain.
a. May be exercised by private individuals
b. May be exercised only by the government
c. Limited to cover the cost to regulate
A1 PASSERS REVIEW CENTER///31
d. Generally no limit as to the amount that may be imposed.
52. Statement 1- The levymg, imposition and collection of tax are legislative in character
53. Statement 2- The aspects of taxation are shared by the legislative and executive branches of the
government
a. True, true d. False,
b. True, false e. false
c. False, true
54. Which of the following statements is not correct?
a. Taxes are neither political nor penal in nature.
b. Taxes should be prospective and should not be given retroactive effect because they are burdens.
c. The power to collect taxes is not lost even if foreign invaders are in control of our country.
d. The application of a constitutional limitation may disregard an inherent limitation
55. Police power as distinguished from power of taxation
a. It exist independent of the constitution being an inherent power of the state.
b. The compensation received in the protection given by the state.
c. It involves the taking of property of individual affected by the exercised of the power.
d. The amount collected is limited to the cost of regulation.
56. The following are the characteristics of special assessment, except.
a. It is based on the government’s need of money to support its legitimate objectives.
b. It is levied only on land.
c. It is based solely on the benefits derived by the owner of the land.
d. Did not result to personal liability of the person assessed.
57. As regards a revenue bill, which of the following is not correct?
a. The Senate may propose amendments if the bill originates from the House of Representatives.
b. The House of Representatives may propose amendments if the bill originates from the Senate.
c. The President may recommend a revenue bill to Congress
d. A House of Representatives version and a Senate version approved separately and then consolidated with
both approving the consolidated version.
58. In 2004, X Corporation incurred the following expenses in connection with the conduct of its business
f. A) Plane tickets and hotel bills of its employees
g. Who were sent to business seminars.................................... P100,000
h. B) Transportation allowances of its officers from
i. home to office and vice versa as part of their
j. employment contract net of P64,000.................................... 136,000
k. C) Transportation expenses of messengers from
l. Office to several clients.......................................................... 80,000
m.
n. The allowable expenses that could be claimed by X Corp. Is
a. P180,000 c.P316,000
b. P244,000 d. P380,000
59. Mr. Araki, a non-resident alien stockholder, received a dividend income of P300,000 in 2010 from a foreign
corporation doing a business in the Philippines. The gross income of the foreign corporation from within
and without the Philippines for three years preceding 2010 is as follows:
60. Source of income 2007 2008 2009
61. From within the Philippines P20,000,000 P12,000,000
P20,000,000
62. From without the Philippines 18,000,000 14,000,000 16,000,000
63.
64. How much of the dividend income received by Mr. Araki is considered income from sources within the
Philippines?
a. Zero c. P144,000
b. P156,000 d. P300,000
65. A, married to M had the following during the taxable year:
66. Gross Income
67. From the practice of profession-------------------- P 700,000
68. Rental income in their conjugal property-------- 300,000
69. Allowable deductions
70. For the practice of profession----------------------- 520,000
71. For the property rented to tenants---------------- 140,000
72.
73. The taxable income before exemption of A is
a. P340,000 c.P260,000
b. P180,000 d. P170,000
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
o.
p.
q.
r.
s.
t.
u.
v.
w.
x.
y.
z.
aa.
ab.
ac.
ad.
ae. ANSWER KEY
af. THEORY OF ACCOUNTS
ag.
ah.
1. D 17. B 33. B
2. D 18. B 34. C
3. C 19. A 35. B
4. B 20. B 36. D
5. C 21. B 37. D
6. A 22. D 38. C
7. B 23. D 39. C
8. C 24. D 40. A
9. D 25. C 41. D
10. D 26. B 42. C
11. B 27. C 43. B
12. D 28. C 44. A
13. D 29. D 45. C
14. D 30. B 46. A
15. C 31. B 47. A
16. C 32. C 48. A
A1 PASSERS REVIEW CENTER///50
49. A 67. D 85. A
50. C 68. A 86. C
51. C 69. A 87. C
52. B 70. B 88. A
53. B 71. D 89. D
54. D 72. D 90. D
55. A 73. B 91. C
56. A 74. B 92. C
57. B 75. C 93. C
58. C 76. A 94. B
59. C 77. D 95. A
60. C 78. C 96. C
61. C 79. D 97. D
62. D 80. C 98. B
63. A 81. A 99. A
64. D 82. C ai. 100. B
65. D 83. D
66. A 84. A
aj.
ak.
al.
am. A1 PASSERS TRAINING, RESEARCH, REVIEW & DEVELOPMENT COMPANY
an. 2nd Floor Sommerset Bldg., Lopez Jaena St. Jaro, Iloilo City
ao. Tel. No.: (033) 320-2728; 09106547262
ap. Email Address: a1nursingreviewic@yahoo.com.ph
aq.
ar. BOARD OF CERTIFIED PUBLIC ACCOUNTANT
as.
at. CERTIFIED PUBLIC ACCOUNTANT Licensure Examination SET A
au.
av. AUDITING THEORY
aw.
ax. INSTRUCTIONS:
1. Detach one (1) answer sheet from the bottom of your Examinee ID/Answer Sheet Set.
2. Write the subject title “AUDITHING THEORY” on the box provided.
3. Shade Set Box “A” on your answer sheet if your test booklet is Set A; Set Box “B” if your test booklet is Set
B.
ay.
az. MULTIPLE CHOICE:
ba.
1. Which of the following statements is correct concerning the concept of materiality?
a. Materiality depends on the nature of an item rather than the peso amount.
b. Materiality is matter of professional judgment.
c. Materiality is determined by reference to guidelines established by the PICPA.
d. Materiality depends only on the peso amount of an item relative to other items in the financial statements.
2. When considering internal control, an auditor must be aware of the concept of reasonable assurance which
recognizes that the
a. Employment of competent personnel assurance that managements control objectives will be achieved.
b. Cost of internal control should not exceed the benefits expected to be derived there from.
c. Separation of incompatible functions is necessary to ascertain that the internal control is effective.
1. C 6. D 11. C
2. D 7. C 12. B
3. B 8. D 13. A
4. C 9. C 14. C
5. B 10. B 15. B
A1 PASSERS REVIEW CENTER///75
16. C 28. D 40. A
17. A 29. C 41. C
18. B 30. C 42. B
19. 31. B 43. A
20. B 32. D 44. B
21. C 33. B 45. A
22. D 34. B 46. C
23. B 35. B 47. B
24. B 36. A 48. B
25. D 37. B 49. A
26. D 38. A 50. B
27. C 39. A
51.
52.
53.
54. A1 PASSERS TRAINING, RESEARCH, REVIEW & DEVELOPMENT COMPANY
55. 2nd Floor Sommerset Bldg., Lopez Jaena St. Jaro, Iloilo City
56. Tel. No.: (033) 320-2728; 09106547262
57. Email Address: a1nursingreviewic@yahoo.com.ph
58.
59. BOARD OF CERTIFIED PUBLIC ACCOUNTANT
60.
61. CERTIFIED PUBLIC ACCOUNTANT Licensure Examination
62.
63. AUDITING PROBLEMS
64. INSTRUCTIONS:
1. Detach one (1) answer sheet form the bottom of your Examinee ID/Answer Sheet Set.
2. Write the subject title “BUSINESS LAW AND TAXATION” on the box provided.
3. Shade Set Box “A” on your answer sheet if your test booklet is Set A; Set Box “B” if your test booklet is Set B.
65. ____________________________________________________________________________-
________________
66. MULTIPLE CHOICES:
67.
68. PROBLEM NO. 1
J. ANSWER KEY
K. AUDITING PROBLEMS
L.
1.A 11. A 21. A
2.A 12. A 22. A
3.C 13. B 23. C
4.A 14. B 24. A
5.D 15. A 25. C
6.C 16. A 26. C
7.B 17. C 27. A
8.A 18. B 28. C
9.C 19. B 29. C
10. B 20. B 30. A
A1 PASSERS REVIEW CENTER///86
31. A 41. A 51. A
32. C 42. C 52. A
33. A 43. A 53. A
34. B 44. B 54. D
35. C 45. B 55. B
36. B 46. C 56. D
37. A 47. B 57. C
38. A 48. B 58. C
39. C 49. C 59. A
40. A 50. A 60. B
61.
62.
63.
64.
65.
66.
67.
68.
69. A1 PASSERS TRAINING, RESEARCH, REVIEW & DEVELOPMENT COMPANY
70. 2nd Floor Sommerset Bldg., Lopez Jaena St. Jaro, Iloilo City
71. Tel. No.: (033) 320-2728; 09106547262
72. Email Address: a1nursingreviewic@yahoo.com.ph
73.
74. BOARD OF CERTIFIED PUBLIC ACCOUNTANT
75.
76. CERTIFIED PUBLIC ACCOUNTANT Licensure Examination
77.
78. PRACTICAL ACCOUNTING 1
79.
80. INSTRUCTIONS:
81.
82. 1. Detach one (1) answer sheet from the bottom of your Examinee ID/Answer Sheet Set.
83. 2. Write the subject title “PRACTICAL ACCOUNTING I “on the box provided
84. 3. Shade Set Box ‘’A” on your answer sheet if your test booklet is Set A; Set box “B” if your if your test
booklet is Set B.
85. __________________________________________________________________________________
86. MULITIPLE CHOICE:
87.
88. 1. On December 31, 2011, the current receivable of Marty Company consisted of the following:
89.
90. Trade accounts receivable 1,200,000
91. Allowance for uncollectible accounts (100,000)
92. Claim against shipper for goods lost in transit (November 2011) 50,000
93. Selling price of unsold goods sent by Marty on consignment at 125%
94. Of cost (not included on marty’s ending inventory) 300,000
95. Security deposit on lease of warehouse used for storing some inventories 200,000
96.
97. What is the correct total of current net receivables on December 31, 2011?
gv.
gw. When an auditor qualifies an option because of inadequate disclosure, the auditor should describe the
nature of the commission in a separate explanatory paragraph and modify the introductory paragraphs.
gx.
A. First statement is correct, the second and third statements are correct
B. First and third statements are not correct, the second statement is correct
C. All statements above are not correct
D. First and second statements are not correct, the third statement is correct
gy.2. To be competent, audit evidence should be either persuasive or relevant, but need not be both.
gz. The difficulty and expense of obtaining audit evidence concerning an account balance is a valid basis for
omitting the test.
ha. Clients accounting data can be sufficient audit evidence to support the financial statements
A. First and second statements are not correct, the third statement is correct
B. All above statements are not correct
C. First and third statements are not correct, the second statement is correct
D. First statement is correct, the second and third statements are not correct
hb. 3. An auditor would most likely be concerned with internal control policies and procedures that provide
reasonable assurance about the entity’s ability to process and summarize financial data.
hc.
hd. An auditor would most likely be concerned with internal control policies and procedures that provide
reasonable assurance about the efficiency of management’s decision making process.
A. Both statements are correct
B. The first statement is not correct, the second statement is correct
C. Both statements are not correct
D. The first statement is correct, the second statement is not correct.
he. 4. Select the correct statement;
A. An auditor’s analytical procedures most likely would be facilitated if the entity corrects material weaknesses in
internal control before the beginning of audit.
B. Auditor’s analytical procedures most likely would be facilitated if the entity’s develops its data from sources
solely within the entity
C. Auditor’s analytical procedures most likely would be facilitated if the entity segregates obsolete inventory
before the physical inventory count
D. An auditor’s analytical procedures most likely would be facilitated if the entity uses a standard cost system
that produces variants reports.
hf. 5. An auditor assesses control risk because it indicates where inherent risk may be the greatest.
hg. An auditor assesses control risk because it determines whether sampling risk is sufficiently low.
hh. An auditor assesses control risk because it includes the aspects of non sampling risk that are controllable.
A. All above statements are correct
B. First statement is correct; the second and third statements are not correct
C. The second statement is correct; the first and third statements are not correct
D. All above statements are not correct
hi.
hj.
hk.
hl.
hm.6. The objective of a review of interim financial information is to provide the accountant with a basis for
reporting whether material modifications should be made to conform with generally accepted accounting
principles.
hn.
GW.
GX.
GY.5. Lobstar ( 10,000)X 150) 1,5000,000
GZ.Shrimp (50,000X. 80) 4,000,000
HA.Salmon( 30,000X 200) – 400,000 payment 5,600,000
HB.Net unrealized gain 3,100,000 B
HC.
HD. 6. net investmen 4,204,000
HE.Less: PV of GRV (500,000 x.58) 280,000
HF. Net Investment to be recovered from rentals 3,924,000
HG. Rentals (3,924,000/4.36) 900,000
HH. Gross investment (900,000x6)+ 500,000 residual value 5,900,000
HI. Less : Net Investment 4,204,000
HJ. Financial revenue 1,696,000 B
HK.
HL. 7. Average earnings (4M-500,000)/5 700,000
HM. Capitalization rate 10%
HN. Net assets with goodwill 7,000,000
HO. Less: Fair value without goodwill 5,500,000
HP. Goodwill 1,500,000 C
A1 PASSERS REVIEW CENTER///148
HQ.
HR.
HS.8. Total market value (except Stellar Company treasury share) 10,600,000
HT. Less: Total cost 10,300,000
HU. Unrealized gain on trading securities 300,000
HV.
HW. 9. Accrued pension cost 1/1 (6,500,000-5,000,000) (1,500,000)
HX.Pension expense (1,000,000)
HY. Contributions 1,200,000
HZ. Accrued pension cost 12/31 (1,300,000) D
IA.
IB.
IC.
ID.
IE. 10. Accounting Profit 1,200,000
IF. Fines and penalties 500,000
IG. Cash dividends received (800,000)
IH. Accounting profit subject to tax 900,000
II. Unrealized gain on trading securities (taxable) (200,000)
IJ. Reversal of deductible temporary difference (600,000)
IK. Reversal of taxable temporary difference 350,000
IL. Taxable profit 450,000 B
IM.
IN. 11. Gross profit from instalment accounts receivable(120,000/30%) 400,000
IO. Instalment accounts receivable (400,000/40%) 1,000,000 C
IP.
IQ. 12. average general price index number (150 +300)/2 225
IR. Cash 300,000
IS. AR 800,000
IT. Inventory (1,200,000 x 300/225) 1,600,000
IU. PPE (2,000,000 x 300/125) 4,800,000
IV. Total assets 7,500,000
IW.
IX. Accounts payable 400,000
n. o. p. r. 14,600
Ar P 1 s. 21,180
q.
1
t. u. v. x. 2,000
Na 2 0 y. 8,920
w.
0
ac.
1
ao.
1
av.
aw. The estimated bad debt rates below are based on Calachuchi crop’s receivable collection
experience.
ax. Age of Accounts Rate
ay. 0-30 days 1%
az. 31-60 days 1.5%
ba. 61-90 days 3%
bb. 91-120 days 10%
bc. Over 120 days 50%
bd.
be.
bf.
bg. The allowance for bad debts account had a debit balance of P5,500 on December 31, 2010
before adjustment.
6. The company’s accounts receivable under 61-90 days category should be
a. P 32,600 c. P 44,600
b. P44,320 d. P 42,000
7. The company’s accounts receivable under 91-120 category should be
a. P 38,320 c. P 29,400
b. P 40,000 d. P 12,000
8. The allowance for bad debts to be reported on the statement on financial position at December 31, 2010 is
a. P 9,699 c. P 4,199
b. P 15, 199 d. P5, 500
9. What entry should be made on December 31, 2010, to adjust the allowance for bad debts account?
a. Bad debt expense 15,199
10. Allowance for bad debts 15,199
a. Bad debt expense 4,199
11. Allowance for bad debts 4,199
a. Allowance for bad debts 5,500
12. Bad debts expense 5,500
a. Bad debt expense 9,699
13. Allowance for bad debts 9,699
14.
15. PROBLEM NO. 3
16. The MALAWI COMPANY is an importer and wholesaler. Its merchandise is purchased from a number
of suppliers and is warehoused until sold to consumers.
17.
18. In conducting his audit for the year ended December 31,2010, the company CPA determined that the system
of internal control was good. Accordingly, he observed the physical. Inventory at an interim date, November
30, 2010 , instead of at year end.
19.
20. The following information was obtained from the general ledger.
21. Inventory, January 1, 2010 22. P 90,000
23. Inventory, November 30, 2010 24. 225,000
25. Sales for eleven months ended November 30, 2010 26. 800,000
27. Sales for year ended December 31, 2010 28. 950,000
29. Purchases for eleven months ended November 30,2010 (before audit 30. 720,000
adjustments)
31. Purchases for year ended December 31, 2010 (before audit adjustment) 32. 810,000
33.
m. Inventory 800,000
n. Receivables 400,000
r. Loans 200,000
m. Current assets n. o.
at.
au. Liabilities and shareholders’ equity
av.
aw. Current assets
ax. Accounts payable ay. P212,000 az. P198,000
ba. Accrued expenses bb. 98,000 bc. 76,000
bd. Dividends payable be. 10,000 bf. _________
bg. Total current liabilities bh. 350,000 bi. 274,000
bj. Notes payable-due 2012 bk. 125,000 bl. __________
bm.Total liabilities bn. 475,000 bo. 274,000
bp.
bq. Shareholder equity:
br. Ordinary share capital bs. 600,000 bt. 550,000
bu. Retained earnings bv. 188,000 bw. 144,000
bx. Total shareholders’ equity by. 788,000 bz. 694,000
ca. Total liabilities and shareholders’ cb. P1,263,000 cc. P968,000
equity
cd.
ce.
cf.
cg. COMBANTRIN COMPANY
ch. CONDENSED COMPARATIVE INCOME STATEMENTS
ci. For the Years Ended December 31, 2010 and 2009
cj.
ck. Net sales 2010 2009
cl. Cost of goods sold P3, 561,000 P3, 254,000
cm. Gross income 2,789,000 2,568,000
cn. Expenses 772,000 686,000
co. Net income 521,000 486,000
cp. P251,000 P200,000
cq.
cr. Additional information for COMBANTRIN COMPANY
a. All accounts receivable and accounts payable relate to trade merchandise
b. The proceeds from the notes payable were used to finance plant expansion
c. Ordinary shares were sold to provide additional working capital
cs.
ct. Compute the following for 2010.
146. Cash collected from accounts receivable (assume all sales are on account)
a.P3,619,000 c.P3,561,000
b.P3,503,000 d.P3,249,000
147. Total purchases (assume all purchases of inventory are on account)
a.P2,828,000 c.P2,550,000
b.P2,789,000 d.P2,750,000
148. Cash payments made on accounts payable to suppliers
a.P2,630,000 c.P2,828,000
b.P2,842,000 d.P2,814,000
149. Net cash provided by operations
a.P689,000 c.P222,000
b.P191,000 d.P199,000
150. Cash receipts not provided by operations
a.P175,000 c.P50,000
b.P177,000 d.P125,000
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
k. l. P140,000
m. n.110,000
o. p.80,000
q. r. 60,000
s. t. 40,000
u. v. 30,000
w. x.30,000
y.
z.Lakewood uses required rate of return of 12% in its capital budgeting decisions. remittal tax rate of
40%. The company uses straight-line depreciation. The present value of annuity of 1 at 12% for
years 4,56376. The details of the present value
aa. ab. ANNUAL CASH
SAVINGS