• The quiz bee will compose of :

• 10 easy (1 point)
• 10 average (2.5 points)
• 10 difficult (5 points) questions.
• 3 gold questions (10 points) at the end of each round will also be asked. Gold
questions will have no choices.
• Time for each question varies based on its difficulty.
• Every member of the team is allowed to use a calculator. Financial calculators are not
allowed.
• The quiz bee will cover any topic that is included in the Accountancy Board Exam.
• For each question, all teams will be given a piece of paper that contains the
question. All teams may only start reading the question when the quiz master says
so.
• If any team starts reading the question before the quiz master says so, they will not
be allowed to answer the question anymore.
• The quiz master will read the first sentence of every question so the teams could
check if they were given the right question.
• All challenges and complaints should be directed to the judges.
• Challenges can only be raised before the start of the next question. Once the next
question is given to the teams, challenges/complaints from the previous questions
will not be entertained.
• The decision of the judges will be final and irrevocable.
• When you hear this noise every team should raise their answers. If a team raises
their answer late, it will be considered invalid.
• There will be a 5-minute break at the end of each round. The tally of the scores will
also be shown at the end of each round.
• In case of a tie, there will be 5 clincher questions to break the tie. If the tie is not
broken after the fifth clincher question, 1 do-or-die question will be given. The team
who will submit the correct answer first in the do-or-die round will be the team that
will claim the higher rank.
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An auditor's letter issued on significant deficiencies relating to a non-issuer's internal
control observed during a financial statement audit should:

a. Include a brief description of the tests of controls performed in searching for significant
deficiencies and material weaknesses.
b. Indicate that the significant deficiencies should be disclosed in the annual report to the
entity's shareholders.
c. Include a paragraph describing management's assertion concerning the effectiveness
of internal control.
d. Indicate that the audit's purpose was to report on the financial statements and not to
provide assurance on internal control.
ANSWER
A
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Which is not within the scope of PAS 2, Inventories?

a. Goods purchased by retailer and held for resale

b. Work in progress arising under construction contracts
c. Work in process produced by a manufacturing entity
d. Cost of service of a service provider for which the entity has not recognized the
related
ANSWER
B
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David Company made amount of costs that will be expensed when incurred
• Cost to develop computer software for internal use
in David’s general management information system 100,000
• Costs of market research activities 75,000
What amount of these expenditures should David report in its 2013 income
statement as research and development expenses?

a. 175,000
b. 100,000
c. 75,000
d. 0
ANSWER
D
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Jaia Company purchased 800 ordinary shares of Federer Industries as a trading
investment for P148,800. During the year, Federer Industries paid a cash dividend of
P32 per share. At year-end, Federer’s shares were selling for P174 per share. In the
income statement for the current year-end, what net amount of unrealized gain/loss
and dividend revenue should be reported by Jaia Company?

a. 16,000
b. 25,600
c. 9,600
d. 32,500
ANSWER
A
ANSWER
D
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On July 1, Kenneth Company exchanged 20,000 shares of its P25 par value ordinary
shares held in treasury for a parcel of land to be held for a future plant site. The
treasury shares were acquired by Kenneth at a cost of P40 per share, and on the
exchange date, the ordinary shares of Kenneth had a fair value of P50 per share.
Kenneth received P60,000 for selling scrap when an existing building on the property
was removed from the site. When the acquisition was recorded by Kenneth, the
entry will include

a. A debit to land for P1,000,000

b. A debit to land for P1,060,000
c. A credit to share premium for P500,000
d. A credit to share premium for P200,000
ANSWER
D
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As activity decreases, unit variable cost:

a. increases proportionately with activity

b. decreases proportionately with activity
c. remains constant

d. increases by a fixed amount

e. decreases by a fixed amount

ANSWER
C
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Raphael Company made the following expenditures:
• Continuing and frequent repairs 350,000
• Repainted the building 120,000
• Major improvement to wiring 450,000
• Partial replacement of tiles 180,000
What total amount should be expensed immediately?
a. 1,100,000
b. 650,000
c. 530,000
d. 350,000
ANSWER
B
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The accounting records of Mark Company revealed the following information:
Raw materials used P 60,000
Direct labor 125,000
Manufacturing overhead 360,000
Work-in-process inventory, 1/1 50,000
Finished-goods inventory, 1/1 189,000
Work-in-process inventory, 12/31 76,000
Finished-goods inventory, 12/31 140,000
Mark's cost of goods manufactured is
a. 519,000 c. 568,000 e. Some other amount
b. 512,000 d. 571,000
ANSWER
A
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Sisa offered her car to Basilio for P1M and giving the latter one week to decide.
Basilio in turn gave Sisa P1,000. In this case, there is
a. Contract of sale of the car with the P1,000 as earnest money
b. Contract of option with the P1,000 as option money
c. Contract to sell of the car at Basilio’s option
d. Contract to sell of the car at Sisa’s option
ANSWER
B
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Acceptance by the donee may be made:
a. In same deed of donation
b. In a separate document
c. Either in same deed of donation or in a separate document
d. Neither same or separate deed of donation
ANSWER
C
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Ralph Industries reported the following data for the year just ended: sales revenue,
P950,000; cost of goods sold, P420,000; cost of goods manufactured, P330,000; and
selling and administrative expenses, P170,000. Ralph's gross margin would be

a. 30,000
b. 200,000
c. 360,000
d. 530,000
e. 620,000
ANSWER
D
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The variable costs per unit are P4 when a company produces 10,000 units of product.
What are the variable costs per unit when 8,000 units are produced?
a. 4.00
b. 4.5
c. 5.00
d. 5.50
e. Some other amount
ANSWER
A
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On March 1 the price of gold is $1,000 and the December futures price is $1,015. On
November 1 the price of gold is $980 and the December futures price is $981. A gold
producer entered into a December futures contracts on March 1 to hedge the sale of
gold on November 1. It closed out its position on November 1. After taking account
of the cost of hedging, what is the effective price received by the company for the
gold?

.
ANSWER
$1,014
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Tempe, Inc., is studying marketing cost and sales volume, and has generated the
following information by use of a scatter diagram and a least-squares regression
analysis:
Scatter Diagram Regression Analysis
Variable cost per unit sold $6.50 $6.80
Total monthly fixed cost $45,000 $42,500
.
Tempe is now preparing an estimate for monthly sales of 18,000 units. On the basis
of the data presented, compute the most accurate expense forecast possible.
ANSWER
$164,900
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Black Inc. acquired an asset that had a cost of P390,000. The asset is being
depreciated over a 5-year period using the sum-of-the-years’ digit method. It has a
salvage value estimated at P30,000. If the asset is sold for P114,000 at the end of the
third year, how much would be the loss/gain on sale?

.
 ANSWER
12,000 GAIN
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West Ave Hospital has two service departments (Patient Records and Accounting)
and two "production" departments (Internal Medicine and Surgery). Which of the
following allocations would not take place under the reciprocal-services method of
cost allocation?

a. Allocation of Accounting cost to Patient Records

b. Allocation of Patient Records cost to Internal Medicine
c. Allocation of Surgery cost to Accounting
d. Allocation of Internal Medicine cost to Surgery
e. Allocations "C" and "D" above
ANSWER
E
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Firm A and Firm B operate in a perfect capital market environment. Each generates P10M
(M = million) of operating income. Firm A pays P3.6M in interest giving a net income of
P6.4M. Firm B pays no interest and so its net income is P10M. Firm A and Firm B have
respective market values of P60M and P50M. Firm A’s debt is P30M while Firm B’s debt is
0. You own 1% of Firm A’s equity and can borrow at 12%. Assuming you seek to make a
riskless arbitrage profit by selling all of your shares, which of the following will occur in
the process of making this profit?
a. You will give up P64,000 income in Firm A to acquire 1.2% of Firm B, achieve a personal
leverage ratio of 0.5, and generate an arbitrage profit of P20,000 more per year.
b. You will borrow P0.6M, buy 1.2% of Firm B, and make an arbitrage profit of P20,000 more
per year.
c. You will give up P64,000 income in Firm A to acquire 1.0% of Firm B, pay interest of
P36,000, and generate an arbitrage profit of P20,000 more per year.
d. You will achieve a personal leverage ratio of 0.5, give up P84,000 income in Firm A to
acquire 1.2% of Firm B, and generate an arbitrage profit of P40,000 more per year.
ANSWER
A
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An entity classified a noncurrent asset as held for sale in accordance with PFRS 5 on
October 1, 2011. The year-end is December 31, 2011. On July 1, 2012, some of the
criteria as held for sale were not met, thus the asset can no longer be classified as
held for sale. The entity will adjust for depreciation in 2012 for
a. 7 months
b. 8 months
c. 9 months
d. No adjustments for depreciation.
ANSWER
C
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Jane Enterprises incurred P828,000 of fixed overhead during the period. During that
same period, the company applied P845,000 of fixed overhead to production and
reported an unfavorable budget variance of P41,000. How much was Jane's budgeted
fixed overhead?
a. 787,000
b. 804,000
c. 869,000
d. 886,000
e. Not enough information to judge
ANSWER
A
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It is difficult to determine whether provision for a particular good or service should
be assigned to the private or public sector of the economy because the
a. institutions in both sectors function efficiently
b. markets function efficiently and the agencies of government perform
imperfectly
c. markets are faulty and government agencies function with such greater
efficiency
d. institutions in both sectors are imperfect
ANSWER
D
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Jones Products has the following information for the year just ended
Budget Actual
Sales in units 15,000 14,000
Sales P150,000 P147,000
Less: Variable expenses 90,000 82,600
Contribution margin P 60,000 P 64,400
Less: Fixed expenses 35,000 40,000
Operating income P 25,000 P 24,400
The company’s sales-volume variance is
a. P3,000 unfavorable c. P4,400 favorable e. P10,000 favorable
b. P4,000 unfavorable d. P10,000 unfavorable
ANSWER
D
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00:00
Strategic trade policy is a modified form for advanced economies of which
protectionist argument?

a. The increase-domestic-employment argument

b. The military self-sufficiency argument
c. The cheap foreign labor argument
d. The infant industry argument
ANSWER
D
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The Enrico Manufacturing Company has two production departments (Assembly and Finishing)
and two service departments (Human Resources and Janitorial). The projected usage of the two
service departments is as follows:
Use of Human Resources Use of Janitorial
Human Resources - 5%
Janitorial 10% -
Assembly 60% 40%
Finishing 30% 55%
The budgeted costs in the service departments are: Human Resources, P90,000 and
Janitorial, P50,000.
Using the step-down method and assuming the Human Resources Department is
allocated first, the total amount of service department cost allocated to the Finishing Department
is
a. 58,947 c. 74,000 e. 81, 053
b. 61, 158 d. 78, 842
ANSWER
B
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The Enrico Manufacturing Company has two production departments (Assembly and Finishing)
and two service departments (Human Resources and Janitorial). The projected usage of the two
service departments is as follows:
Use of Human Resources Use of Janitorial
Human Resources - 5%
Janitorial 10% -
Assembly 60% 40%
Finishing 30% 55%
The budgeted costs in the service departments are: Human Resources, P90,000 and
Janitorial, P50,000.
Using the direct method, the amount of Janitorial Department cost allocated to the
Finishing Department
a. 21,053 c. 25,000 e. 34,157
b. 24,843 d. 28,947
ANSWER
D
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Which is characteristic of a product whose demand is elastic?

a. The price elasticity coefficient is less than 1

b. Total revenue decreases if price decreases
c. Buyers are relatively insensitive to price changes
d. The percentage change in quantity is greater than the percentage change
in price
ANSWER
D
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Consider the following statements about dual-cost allocation
I Dual-cost allocation prevents a change in the short-run activity of one department from
affecting the cost allocated to another department
II Dual-cost allocations create an incentive for user department managers to understate their
expected long-run service needs
III Dual-cost allocations are generally preferred over lump-sum allocations, or those that
combine variable and fixed costs together
Which of the above statements is (are) true?

a. I only d. II and III

b. III only e. I, II and III
c. I and II
ANSWER
E
 Good X Good Y
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Quantity MU Quantity MU
1 8 1 10
2 7 2 8
3 6 3 6
4 5 4 4
5 4 5 3
6 3 6 2
7 2 7 1
To maximize utility, the consumer will buy
a. 7X and 1Y c. 3X and 3Y
b. 5X and 2Y d. 1X and 4Y
ANSWER
B
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Which is a characteristic of a good whose demand is inelastic?

a. There are a large number of good substitutes for the good for consumers
b. The buyer spends a small percentage of total income on the good
c. The good is regarded by consumers as a luxury
d. The period of time for which demand is given relatively long
ANSWER
D
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Danica Fabricators uses the average retail method. On December 31, 2015, the following
information relating to the inventory was gathered:
Cost Retail
Inventory, Beg 190,000 450,000
Purchases 2,990,000 4,350,000
Purchases Discounts 40,000
Freight-in 150,000 175,000
Markups 300,000
.
Markdown 400,000
Sales 4,400,000
Sales Return 100,000
Sales Discount 50,000
Sales Allowance 30,000
What is the estimated cost of inventory on December 31, 2015?
 ANSWER
388,051.28
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Diego makes all purchases on account, subject to the following payment pattern:

• Paid in the month of purchase: 30%

• Paid in the first month following purchase: 60%
• Paid in the second month following purchase: 10%

If. purchases for January, February, and March were $200,000, $180,000, and
$230,000, respectively, what were the firm’s budgeted payments in March?
ANSWER
197,000
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The following information was made available about The following information was made available about
Ehrmantraut Company’s receivables and related data: Ehrmantraut Company’s receivables and related data:
AR, beg 200,000 Year Sales Uncollectible Accounts
ADA, beg 15,000 2013 1,100,000 33,000
Credit Sales 2,500,000 2014 1,200,000 48,000
Sales Returns and Allowances 20,000 2015 1,350,000 67,500
Cash collected from customers’ current 1,663,200 An aging of accounts receivable at year-end indicated
accounts, net of sales discounts of 12% the following:
. receivables written-off during the
Accounts 35,000 Age % of Total Accounts Probability of
year Receivable Collection
Recoveries of accounts written-off in previous 12,000 Current 75% 90%
year
31-60 days 15% 85%
Determine the net realizable value of Accounts
61-90 days 8% 60%
Receivable as of year-end under the percentage of net
credit sales method (net of discount and returns Over 90 days 2% 5%
allowances).
ANSWER
672,872
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On an audit engagement for 2014 you handled the audit of fixed assets of DMCI Mines. This
mining company bought the exploration rights of A Brown Mining on June 30, 2014 for
P7,279,000. Of this purchase price, P4,860,000 was allocated to copper ore which had remaining
reserves estimated at 1,620,000 tons. DMCI Mines expects to extract 15,000 of ore a month with
an estimated selling price of P50 per ton. Production started immediately after some new
machineries costing P600,000 were bought on June 30, 2014. These new machineries had an
estimated useful life of 15 years with a scrap value of 10% of cost after the ore estimate has been
extracted from the property, at which time the machineries will already be useless. Among the
operating expenses of DMCI Mines at December 31, 2014 were
Depletion Expense 405,000
Depreciation, machineries 40,000
Recorded depletion expense was
a. Overstated by P90,000 c. Overstated by 135,000
b. Understated by P90,000 d. Understated by P135,000
ANSWER
C
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Beige Hotel & Spa Inc. manages an extensive network of boutique hotels in the
country. The company has significant receivables from three customers, P250,000
from Hotel A, P450,000 from Hotel B and P400,000 from Hotel C. Beige hotel & spa
inc. has other receivables amounting to P225,000. The company determines that the
receivable from Hotel B is impaired by P75,000 and receivables from Hotel C is
impaired by P100,000. The receivable from Hotel A is not considered impaired. The
company also determines that a composite rate of 5% is appropriate to measure
impairment on all other accounts receivable. After recognizing impairment loss, what
amount of receivables should the company present in its financial position?

a. 1,325,000 c. 1,150,000
b. 1,126,250 d. 1,137,500
ANSWER
B
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On January 2, 2018, Mark Company purchased as along-term investment a debt instrument with a
five year term for its fair value of 1,386,275. The instrument has a principal amount of 1,500,000
and carries a fixed interest of 5% annually. The effective interest is determined to be 10%. The
company’s management has the positive intent and ability to hold the debt instrument until
maturity.
During 2020, the issuer of the instrument is in financial difficulties and it becomes probable that
the issuer will be put into administration by a receiver. The fair value of the instrument is
estimated to be 750,000 at the end of 2020, calculated by discounting the expected future cash
flows at 10%. No cash flows are received during 2021. At the end of 2021, the issuer is released
from administration and Mark receives a letter from the receiver stating that the issuer will be
able to meet its remaining obligations, including interest and repayment of principal.
What amount of impairment loss should be recognized in 2020?
a. 697,932 c. 636,275
b. 750,000 d. 675,393
ANSWER
A
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In a contract of sale executed by S and B, it appears S sold his motor vehicle to B and
B bought it for P50,000. It turned however, S has three motor vehicles: Galant valued
P80,000; Hi-Ace van valued at P70,000; and a Jeep valued P60,000. Which of the
following is correct?

a. The contract shall be reformed because there was mistake.

b. The parties can ask for interpretation because the word motor vehicle is
ambiguous.
c. The parties can ask for annulment of the contract.
d. There is no contract, because the object is not certain.
ANSWER
D
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One of the following is not allowed as deduction from the gross gifts of a non-
resident alien donor.
a. Gifts made to or for the use of the National Government
b. Gifts made on account of marriage
c. Gifts made in favor of a religious corporation
d. Encumbrance on the property donated assumed by the done
ANSWER
B
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The power to decide disputed assessments, refunds of internal revenue taxes, fees or
other charges, penalties imposed in relation thereof, or other matters arising under
the Tax code or other laws or positions thereof administered by the BIR is vested in
the:
a. Regional Trial Court
b. President of the Philippines
c. Commissioner of internal revenue
d. Court of Tax appeals
ANSWER
C
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Rey Company’s post closing trial balance at December 31, 2015 appear as follows:
Accounts Payable 3,000,000 Inventory 8,000,000
Accounts Receivable 6,000,000 Available for sale securities 3,500,000
Accumulated Depreciation 2,500,000 Investment in equity securities at cost 2,000,000
Allowance for doubtful accounts 800,000 Unrealized loss on AFS securities 500,000
Bonds Payable 5,000,000 APIC 5,000,000
Property, plant, and equipment 11,000,000 APIC from sale of treasury 1,000,000
Cash 2,500,000 Preferred stock (P25 par value) 5,000,000
Common Stock (P50 par value) 6,000,000 Retained earnings 6,500,000
Dividends payable 200,000 Treasury common stock-20,000 at cost 1,500,000

The dividend on cumulative preferred stock is 10%. The preferred stock has a preference in
liquidation of P50. What is the total stockholders’ equity on December 31, 2015?
a. 22,000,000 c. 21,700,000
b. 21,500,000 d. 23,500,000
ANSWER
B
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The cash in bank account of Mercury Labs, for April 2016 showed and ending balance
of P129,298. Deposit in transit on April 30 was P18,200. Outstanding checks as of
April 30 were P59,435, including a P5, 000 CHECK WHICH THE BANK HAD CERTIFIED
ON April 27. During the month of April the bank charged back NSF checks in the
amount of P3,435 of which P1,835 had been redeposited by April 20. On April 23, the
bank charged Mercury Labs’ account for a P2,200 items which should have been
charged against Silver Labs, the error was not detected by the bank. During April, the
proceeds from notes collected by the bank for Mercury Labs was P7,548 and bank
charges for this service was P18.
How much is the unadjusted balance per bank on April 30?
a. 95,263 c. 173,663
b. 88,333 d. 169,263
ANSWER
D
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De Leon Inc. is a calendar year corporation. Its financial statements for the years
2012 and 2013 contained errors as follows. :
2012 2013
Ending Inventory 1,000 understated 3,000 overstated
Depreciation Expense 800 understated 2,500 overstated
Assume that no correcting entries were made at December 31, 2012. By how much
will 2012 income before income taxes be overstated or understated

a. 200 understated c. 2,700 understated

b. 500 overstated d. 3,200 understated
ANSWER
A
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Income is considered realized for tax purposes when:
a. It is recognized as revenue under accounting standards even if the law does not do so.
b. The taxpayer retires from the business without approval from the BIR.
c. The taxpayer has been paid and has received in cash or near cash the taxable income.
d. The earning process is complete or virtually complete and an exchange has taken
place.
ANSWER
D
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The power to tax is not without limitations. Such limitations may be constitutional
(expressly found in the constitution or implied in its provisions) or inherent (restrict
the power although they are not embodied in the constitution). Which of the
following is an inherent limitation?
a. No imprisonment for non-payment of a poll tax
b. Equal protection of the laws
c. Exemption from taxation of government entities
d. Exemption of religious, charitable, and educational entities, non-profit cemeteries, and
churches from property taxation
ANSWER
C
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The par values for the ordinary and preference shares are P2 and P10, respectively. The treasury
shares were originally purchased when the market price was P20 per share.
During 2013, 250 Treasury shares were resold for P25 per share. A gain on treasury share
transactions’ was credited for the difference between the original cost and the selling price.
Furthermore, the excess of cost over market of the treasury shares at the end of the period was
recognized as an unrealized loss on the 2013 income statement.
You also discovered that a majority stockholder donated during 2013, a land which originally
costed the stockholder P5,000 but with a market value of P9,000 during the date of donation.
Subscription receivable are due six months from December 31,2013.
Treasury Shares:
a. 14,000 c. 20,000
b. 18,750 d. 15,000
ANSWER
D
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A restriction of retained earnings is most likely to be required by the:
a. Purchase of the treasury stock
b. Amortization of past service cost.
c. Payment of last maturing series of a series bond issue.
d. Exhaustion of potential benefits of the investment credit.
ANSWER
A
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Sean Cahill established an investment account by making annual deposits of P8,000
at the beginning of each six years to an account paying 8% in BPI. At the end of the
sixth year, the account balance was transferred to Metrobank paying 10% and annual
deposits of P8,000 were made at the end of each year from the seventh through
twelfth year. What is the account balance at the end of the tenth year?
 ANSWER
129,926.21
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Wolfe, Inc., began operations on January 1 of the current year with a $12,000 cash
balance. Forty percent of sales are collected in the month of sale; 60% are collected
in the month following sale. Similarly, 20% of purchases are paid in the month of
purchase, and 80% are paid in the month following purchase. The following data
apply to January and February:
January February
Sales $35,000 $55,000
Purchases 30,000 40,000
Operating Expenses 7,000 9,000
If operating expenses are paid in the month incurred and include monthly
depreciation charges of $2,500, determine the change in Wolfe’s cash balance during
February.
 ANSWER
$4,500 INCREASE
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The Grainger Company’s budgeted income Grainger pays for all purchases in the month
statement reflects the following amounts: following purchase and takes advantage of a 3%
discount. The following balances are as of January
1:
Sales Purchases Expenses
Cash $88,000
January $120,000 $78,000 $24,000
Accounts Receivable* 58,000
February 110,000 66,000 24,200
Accounts Payable 72,000
March 125,000 81,250 27,000
*Of this balance, $35,000 will be collected in January and the
April 130,000 84,500 28,600 remaining amount will be collected in February.
The monthly expense figures include $5,000 of
Sales are collected 50% in the month of sale, 30% depreciation. The expenses are paid in the month
in the month following sale, and 19% in the incurred.
second month following sale. One percent of sales
What is Granger’s budgeted cash receipts in
is uncollectible and expensed at the end of the
February?
year.
ANSWER
$114,000
Drago makes all sales on account, subject to the following collection pattern: 30% are
collected in the month of sale; 60% are collected in the first month after sale; and
10% are collected in the second month after sale. If sales for June July, and August
were $120,000, $160,000, and $220,000, respectively, what were the firm’s budgeted
collections for August and the company’s budgeted receivables balance on August
31?
 ANSWER
August Collections: $174,000; August
31 Receivable Balance: $170,000
Hamilton is an analyst with Pacers Worldwide, an investment banking firm. She just
received the following information (as of year-end) for Trotters Diversified:
• Average common shares outstanding of 5.0 million.
• Average market price for common stock of $35.00 per share.
• Net income of $9.0 million.
• Common stock dividends paid of $1.2 million.
• Preferred dividends paid (on convertible preferred stock noted below) of $1.5 million.
• Tax rate of 40%.
• 500,000 shares of cumulative convertible preferred stock with $30 par value and 10% dividend. Each
preferred share is convertible into 5 common shares.
• 10,000 convertible $1,000 par bonds with a 6.0% coupon, each convertible into 8 shares of common stock.
• 400,000 stock options recently issued with an exercise price of $32.00 per share.
What is the DEPS?
ANSWER
$1.19