FAR

Easy
Entries made to transfer temporary account balances to permanent accounts.
a. Journal entries
b. Adjusting entries
c. Reversing entries
d. Closing entries

Average
The principal purpose of posting is to
a. Enter transactions directly into the ledger
b. Help determine if the financial statements are ready to be prepared
c. Help identify errors in the journal
d. Obtain updated account balances
Difficult
Mission company owns an office building and leases the office under a variety of rental
agreements involving rent paid in advance monthly or annually. Not all tenants make timely
payments of their rent. Mission company’s statement of financial position contained the
following data:
2014 2015
Rent receivable P72,000
P93,000
Unearned rentals 240,000 180,000
During 2015, Mission Company received P600,000 from tenants.
What amount of rental should Mission Company record for 2015?
a. 681,000
b. 640,500
c. 540,000
d. 499,500

AFAR
Easy
Which of the following statements is false?
a. Job-order costing are used when companies produced many different types of
products.
 b. A normal costing system assigns overhead costs to products by multiplying the
actual overhead rate by the actual amount of the allocation base.
c. Manufacturing overhead is an indirect cost.
d. Ideally, the allocation based in the predetermined overhead rate should be a cost
driver.
Average
The predetermined overhead rate is P50 per machine-hour, under applied overhead is
P5,000, and the actual amount of machine hour is 2,000. What is the actual amount of total
manufacturing overhead incurred during the period?
a. P105,000
b. P95,000
c. P150,000
d. P110,000
Difficult
The estimated total manufacturing overhead cost is P200,000. The estimated total
amount of the allocation base is 40,000 direct labor-hours. The actual total manufacturing
overhead cost for the period is 220,000 and the actual direct labor-hours worked on all jobs
during the period is 41,000 hours. The total underapplied (overapplied) overhead for the period
is:
a. P20,000 underapplied
b. P20,000 overapplied
c. P15,000 underapplied
d. P15,000 overapplied

MAS
Easy
Which of the following statement about cost is False?
a. An organization may have cost drivers across various activities of its value chain.
b. It is important to identify the appropriate cost drivers.
c. One of the main goals of management accounting is helping mangers control cost.
d. Managers can control costs without understanding how activities of an organization
affects its costs.

Average
Hot company, a producer of salsa, has the following information:
Income tax rate 30%
Selling price per unit P8.00
 Variable cost per unit P3.00
Total fixed costs P90,000

The contribution margin per unit is?

a. P2.00
b. P3.00
c. P5.00
d. P8.00

Difficult
For the year just ended, Cole corporation’s manufacturing costs totaled P1,500,000.
Beginning and ending Work0in0process inventories were P60,000 and P90,000 respectively.
Cole’s balance sheet also revealed respective beginning and ending finished-goods inventories
of P250,000 and P180,000. On the basis of this information, how much would the company
report as cost of goods manufactured and cost of goods sold?
COGM COGS
a. 1,430,000 1,460,000
b. 1,470,000 1,540,000
c. 1,530,000 1,460,000
d. 1,430,000 1,640,000

Audit
Easy
Any service that requires a CPA firm to issue a report about the reliability of an assertion
that is made by another party is a(an):
a. Accounting and bookkeeping service
b. Attestation service
c. Assurance service
d. Tax service

Average
The Public Company Accounting Oversight Board:
a. Perform inspections of the quality controls at audit firms that audit public companies
b. Establish auditing standards that must be followed by CPAs on all audits.
c. Oversee auditors of private companies
d. Perform any of the above functions
Difficult
Which of the following can be significantly affected by an audit?
a. Business risk
b. Information risk
c. The risk-free interest rate
d. Inherent risk