1. Which of the following may be classified as a biological asset?

a. breast milk b. cheese curls c. mama monkey d. dead mama monkey

2. Which of the following may be classified as an agricultural produce?

a. duck b. table egg c. egg powder d. cake

3. Which of the following is not one of the common features of agricultural activities?
a. accounting change c. management of change
b. capability to change d. measurement of change

4. A biological asset is initially and subsequently measured at

a. fair value c. cost
b. fair value less costs to sell d. fair value less costs to complete

5. Which of the following is not a biological asset that is accounted for under IAS 41 Agriculture?
a. animals that are being grown to be butchered for their meat
b. animals held to produce milk
c. plants grown to produce fruit over a long period of time
d. plants grown to be harvested and sold

6. According to IAS 41, this refers to the management by an entity of the biological transformation of
biological assets for sale, into agricultural produce, or into additional biological assets.
a. Agricultural activity c. Biological transformation
b. Agricultural management d. Biological activity

7. Agricultural activity covers a diverse range of activities. Such diverse range of activities have common
features which includes all of the following except
a. Capability to change c. Recognition of change
b. Management of change d. Measurement of change

8. It is the detachment of produce from a biological asset or the cessation of a biological asset’s life
processes.
a. Harvest b. Death c. Decease d. Cultivation

9. When there is a long aging or maturation process after harvest, the accounting for such products should
be dealt with by
a. IAS 41 b. IAS 2 c. IAS 16 d. IAS 40

10. According to IAS 41, which of the following would be classified as a product that is the result of
processing after harvest?
a. Cotton b. Wool c. Bananas d. Cheese

11. Which of the following items would be classified as agricultural produce, according to IAS 41 Agriculture?
a. Tree b. Bush c. Butter d. Apple

12. According to IAS 41, which of the following items would be classified as biological assets?
I. Oranges
II. Chickens
III. Eggs
IV. Trees
a. I, II b. III, IV c. II, IV d. I, IV

13. Are the following statements about classification according to IAS 41 Agriculture true or false?
I. Sugar should be classified as agricultural produce.
II. Wool should be classified as agricultural produce.
 a. False, False b. False, True c. True, False d. True, True

14. Which of the following is not dealt with by IAS 41?

a. The accounting for biological assets.
b. The initial measurement of agricultural produce harvested from the entity’s biological assets.
c. The processing of agricultural produce after harvesting.
d. The accounting treatment of government grants received in respect of biological assets.

15. Which of the following is correct regarding the applicability of IAS 41?
a. IAS 41 applies to biological assets and agricultural produce at the point of harvest even if they do not
relate to agricultural activities.
b. IAS 41 applies to unconditional government grant related to biological assets measured at cost.
c. IAS 41 applies to land on which tree recognized as biological assets are planted.
d. IAS 41 applies to living plants and animals only when such items relate to agricultural activity.

16. IAS 41 applies to which of the following when they relate to agricultural activity
I. Biological assets
II. Agricultural produce after the point of harvest
III. Agricultural produce at the point of harvest
IV. An unconditional government grant related to a biological asset measured at its fair value less
costs to sell
V. An unconditional government grant related to a biological asset measured at cost
VI. Land related to agricultural activity
VII. Intangible assets related to agricultural activity
a. I, II, IV b. I, III, IV c. I, II, III, IV, V d. I, II, IV, VI, VII

17. According to IAS 41, this refers to the harvested product of the entity’s biological assets.
a. biological produce b. agricultural products c. agricultural produce d. biological assets

18. It is a living animal or plant.

a. biological product b. biological asset c. agricultural product d. mutant assets

19. It comprises the processes of growth, degeneration, production, and procreation that cause qualitative or
quantitative changes in a biological asset.
a. agricultural activity b. biological activity c. genetic mutation d. biological transformation

20. Agricultural activity covers a diverse range of activities which includes all of the following except
a. processing of grapes into wine by a vintner who has grown the grapes
b. raising livestock, forestry, and annual or perennial cropping
c. cultivating orchards and plantations
d. floriculture and aquaculture (including fish farming)

21. Agricultural activity may include

a. ocean fishing b. deforestation c. animal hunting in the forest d. fish pond operation

22. According to IAS 41 Agriculture, which of the following criteria must be satisfied before a biological asset
can be recognized in an entity's financial statements?
I. The entity controls the asset as a result of past events
II. It is probable that economic benefits relating to the asset will flow to the entity
III. An active market for the asset exists
IV. The asset forms a homogenous biological group
a. I, II b. I, II, IV c. I, II, III d. I, II, III, IV

23. An entity had a plantation forest that is likely to be harvested and sold in 30 years. The income should be
accounted for in which of the following way?
 a. No income should reported annually until first harvest and sale in 30 years
b. Income should be measured annually and reported using a fair value approach that recognizes and
measures biological growth.
c. The eventual sale proceeds should be estimated and matched to the profit and loss account over the
30-year period.
d. The plantation forest should be valued every 5 years and the increase in value should be shown in
the statement of recognized gains and losses

24. When agricultural produce is harvested, the harvest should be accounted for by using PAS 2 Inventories,
or another applicable PFRS. For the purpose of that Standard, cost at the date of harvest is deemed to be
a. the fair value less cost to sell at point of harvest
b. the historical cost of the harvest
c. the historical cost less accumulated impairment losses
d. market value

25. A gain or loss arising on the initial recognition of a biological asset and from a change in the fair value less
costs to sell of a biological asset should be included in
a. The net profit or loss for the period
b. The statement of recognized gains and losses
c. A separate revaluation reserve
d. A capital reserve within equity

26. Land that is related to agricultural activity is valued

a. At fair value
b. In accordance with IAS 16, Property, Plant and Equipment, or IAS 40, Investment Property
c. At fair value in combination with the biological asset that is being grown on the land
d. At the resale value separate from the biological asset has been grown on the land

27. An unconditional government grant related to a biological asset that has been measured at fair value less
cost to sell should be recognized as
a. Income when the grant becomes receivable
b. A deferred credit when the grant becomes receivable
c. Income when the grant application has been submitted
d. A deferred credit when the grant has been approved

28. Biological assets and agricultural produce are initially recognized at

a. cost c. fair value less costs to sell
b. fair value d. lower of cost or fair value less costs to sell

29. Biological assets are

a. Living animals only c. Both living animals and living plants
b. Living plants only d. Neither living animals nor living plants

30. Agricultural activity

a. is the aggregation of similar living animals or plants.
b. is the detachment of agricultural produce from a biological asset.
c. comprises the processes of growth, degeneration, production and procreation of a biological asset.
d. is the management by an entity of the biological transformation and harvest of biological asset or sale
or for conversion into agricultural produce or additional biological asset.

31. The following provides examples of biological assets, agricultural produce and products that are the
result of processing after harvest. Which is an incorrect combination?
Biological asset Agricultural produce Product after harvest
a. Trees Felled trees Logs, lumber
b. Dairy cattle Cheese Milk
 c. Pigs Carcass Sausage
d. Vines Grapes Wine

32. All of the following items are classified as biological assets, except
a. Dairy cattle b. Chickens c. Eggs d. Trees

33. All of the following are classified as agricultural produce, except

a. Sugar b. Wool c. Cotton d. Milk

34. Which of the following is classified as agricultural produce?

a. Tree b. Bush c. Butter d. Apple

35. Which of the following is classified as a product that is the result of processing after harvest?
a. Cotton b. Apple c. Bananas d. Cheese

36. Agricultural activity includes all of the following, except

a. Raising livestock c. Floriculture and aquaculture, including fishing
b. Annual perennial cropping d. Ocean fishing
37. All of the following criteria must be satisfied before a biological asset can be recognized in an entity's
financial statements, except
a. The entity controls the asset as a result of past events.
b. It is probable that future economic benefits relating to the asset will flow to the entity.
c. An active market for the asset exists.
d. The fair value or cost of the asset can be measured reliably.

38. Biological assets are measured at

a. Cost c. Net realizable value
b. Lower of cost or net realizable value d. Fair value less cost to sell

39. Agricultural produce is harvested product of an entity’s biological asset and measured at
a. Fair value c. Net realizable value
b. Fair value less cost to sell at the point of harvest d. Net realizable value less normal profit margin

40. Costs to sell include all of the following, except

a. Commissions to brokers and dealers c. Transfer taxes and duties
b. Levies by regulatory agencies d. Transport costs

41. Where the fair value of the biological asset cannot be determined reliably, the biological asset shall be
measured at
a. Cost
b. Cost less accumulated depreciation
c. Cost less accumulated depreciation and accumulated impairment losses
d. Net realizable value

42. Which of the following statements in relation to agricultural produce is true?

I. In all cases, an entity shall measure agricultural produce at the point of harvest at fair value less cost
to sell.
II. The prevailing view is that the fair value of agricultural produce at the point of harvest can always be
measured reliably.
a. I only b. II only c. Both I and II d. Neither I nor II

43. A gain or loss arising on the initial recognition of biological asset and from a change in fair value less cost
to sell of a biological asset shall be included in
a. the profit or loss for the period c. a separate revaluation reserve
 b. other comprehensive income d. a general reserve

44. When agricultural produce is harvested, the harvest should be accounted for as “inventory”. For this
purpose, the cost at the date of harvest is deemed to be the
a. Fair value less cost to sell at the point of harvest c. Historical cost less impairment
b. Historical cost of the harvest d. Market value

45. Land that is related to agricultural activity is measured

a. At fair value
b. At fair value in combination with the biological asset that is being grown on the land
c. At the resale value separate from the biological asset that is being grown on the land
d. In accordance with IAS 16 Property, plant and equipment or IAS 40 Investment property

1. Aliyah Company has reclassified certain assets as biological assets. The total value of the
forest assets is P6,000,000 which comprises:
Freestanding trees 5,100,000
Land under trees 600,000
Roads in forest 300,000
In the statement of financial position, what total amount of the forest assets should be
classified as biological assets?
a. 5,100,000
b. 5,700,000
c. 5,400,000
d. 6,000,000

2. Andele Company provided the following data:

Value of biological asset at acquisition cost on December 31, 2019 6,000,000
Fair valuation surplus on initial recognition
at fair value on December 31, 2019 500,000
Change in fair value on December 31, 2020 due to
growth and price fluctuation 900,000
Decrease in fair value due to harvest 100,000

What is the carrying amount of the biological asset on December 31, 2020?
a. 7,400,000
b. 7,300,000
c. 7,500,000
d. 6,500,000
What is the net gain from the change in fair value of biological asset that should be
reported in 2020?
a. 1,400,000
b. 1,300,000
c. 900,000
d. 800,000

3. Anelia Dairy produces milk for local ice cream producers. The entity began operations
on January 1, 2019 by purchasing milking cows for P2,000,000. The entity controller
 had the following information available at year-end relating to the milking cows:
Carrying amount - January 1 2,000,000
Change in fair value due to growth and price changes 400,000
Decrease in fair value due to harvest 50,000
Milk harvested during the year but not yet sold 150,000
What amount of gain on biological asset should be reported in 2019?
a. 400,000
b. 350,000
c. 600,000
d. 550,000

What amount of gain on agricultural produce should be recognized in 2019?

a. 150,000
b. 100,000
c. 400,000
d. 350,000

4. Ambrosha Company is a producer of coffee. On December 31, 2019, the entity has
harvested coffee beans costing P3,000,000 and with fair value less cost to sell of
P3,500,000 at the point of harvest. Because of long aging and maturation process after
harvest, the harvested coffee beans were still on hand on December 31, 2020. On such
date, the fair value less cost to sell is P3,900,000 and the net realizable value is
P3,200,000. What is the measurement of the coffee beans inventory on December 31,
2020?
a. 3,000,000
b. 3,500,000
c. 3,200,000
d. 3,900,000

5. Amici Company has a herd of 100 2-year old animals on January 1, 2019. Ten animals
aged 2.5 years were purchased on July 1, 2019 for P10,800 each and ten animals were
born on July 1, 2019. No animals were sold or disposed of during the year. The fair values
less cost to sell per unit were:
2-year old animal on January 110,000
2.5-year old animal on July 110,800
New born animal on July 17,000
2-year old animal on December 31 10,500
2.5-year old animal on December 31 11,100
Newborn animal on December 31 7,200
3-year old animal on December 31 12,000
0.5-year old animal on December 3 18,000

What is the carrying amount of the biological assets on December 31, 2019?
a. 1,400,000
b. 1,440,000
c. 1,178,000
d. 1,320,000
What is the gain from change in fair value that should be reported for 2019?
a. 292,000
b. 237,000
c. 55,000
d. 0