SAINT PAUL SCHOOL of PROFESSIONAL STUDIES: Accountancy Department : Diagnostic Examination (TOACREV) ‘ IRSTRUCTIONS: Select he corect/best nae foreach of the following questions, Mark only one answer br each iter in the answer sheet provided. tretly no erasures are allowed. Use blue pen only. 1. In computing diluted EPS, interest expense on convertible bond payable shall be 2 Added back tet income at gross ‘. Deducted from net income net of tax 4. lenored 2 Which of the folowing would cause income ofthe current period tobe understated? a contalingfeseatch and developmenteause = = ‘Failure to recognize unearned rent revenue C_ Changing from weighted average to FIFO for merchandise inventory |. Which of the following would be classified as agricutural produce? Lo Sah eer “a hoe = «4 anenetyownsa number of hers of cat, Where changes inthe far valunofaherd of ate shouldbe recognied inthe Financia statements? “aa nproftorlossony «Inpro or los other comprehensive income JemBiner comprehensive come only Inthe statement of ash Rows onty L/S Meander rene attr Px par sari . : a prepering financial statements in conformity with GAAP ‘erty the accuracy of finan statements Spine frat ateents ath EC 6. Tefolowing state nents relat to the standard of adequate dsciosur, Which statements contre emmara accountng ntormation tat meets the qulatve objective of nani acounting a9 meets the reporting standard of adequate disclosure eeerepang Jar concerned nat ony wth eked f information contain in fiancl statements tats with the manner in which that information s presented deren ander eat for teancal epring fay franc act grant enough ones the judgment ofan informed reader ofthe statements 1._-The proper accounting forthe costs iced in renting computer sftmare product 6 ithe software is old erat ara an tevcopmen exgans ante compute fare sama ze Toca esrcamrosincoed url etaied progam des of woking ode seed 7 ‘ pe meni bat ese te cent retnos scouring for research and dean 2. A provision for @ temporary decine in value of a debt security classified as held to maturity is recognized »b._Aliabilty is accried Tora guarantee ofthe indebtedness of others 4. A dolia-denominated nove payable is adjusted fora peso devaluation that occurs afer the end ofthe reporting pesion ores bearing noe receivable was dicount ats bank at 7 C20. Aterbingfo 40 dys a 12-day 12ers bearing noe 159 The proceeds ced tom theta ea @. Matunty vaiue less the discount at 12% _& Maturity value less the discount at 1556 ~~ 2. Rte vte tess the dhcaunt t 2 Facet lesthe discount at 58ure, notifeaton bs . vee ‘4. Discounting a. Pledge b. Assignment sa ulbertne cost mol subsequent ral cognition as an ase, an tem of Pe plant and ‘uipment shall be cared at a. cost bh Revalved amount ee ated impalrment 33 Pe perluet amount less accumulated deprecation and any 34m 22. Direct atibutebe cots include a ofthe following, except errr of ite preparation, tal elvey, handing and nstaltion profesional fees sch 5 for architects and engineers 3. Prefer ranting aa removing tne asetanarestrng te se or wich ie ery Mas & revert obligation “operated at lessthan capacity 2A. when interest expense cakclted sng the tet irterest method, Interest expense gus he ene punt of interest aid 1. pookvati of bonds muti bythe tatedinteres rate array anus ofthe bonds mated by the effective interest ate 25. "was rom sie of treasury shares shale charged 2 1nTosson ale of treasury shares tobe shown as ther exoense i. tenes earings and then share premium frm treasury shares Set em tram arginal bsuanc, sare prim or treasury shares and then retained earnings 26, An example of income dered fers &. Apprectionf property 1 Settement of Baily ates thant book sive {Land acute by donation 2 Rober stole rom enemy computers wa esate fo Anenhange tb Ncaay 28, Which woul be casts rarllistruments? a Pater sp aderectvabes “=, lventores Land and building 28. atthe besinnngof the erent yar an enty purchased 3H ofthe eguy shares another entity wth the teemonot non hs investment ore the lng term. The most appropiate casification of this equity center vele though poitorloss. billed to maturity \ezktfervaluetireugNOC! &. Amortzed cost ‘An svestor ees the costmetod to account for investment in ordinary shares. Dividends recevedn excess ‘ft nvestr’s share of nveste's earings Subsequent to date of investment 1 Do ct affect the aestment account “Ae Decrease the investment acount ? ' Inceae the investment account 1 lnceate the ivestment revenue account 21. Whenallbonds mature ona single date they rece a Termbonds TS Swialbonds-< Debentre bands 4 Clube bonds 1, en terest payment datesef bond are May and Novem 3, and bondi soon ne the cut oer recone ye sir be — 1 emened by coed erst from et Nverber 1 Deseaed ty cred interes rom Mayo lune 1 eae y cred ares rm neo Nove 1 “9 invascby acee intrest rom May une =