(0°) RSG The Review School of hecountomer* Theory of Accounts TA-37A: PARTNERSHIP, CORPORATE LIQUIDATION & HOME OFFICE-BRANCH Sources: Applicable AICPA/vanous test banks Ail of the following are characteristics of a typical partnership, EXCEPT Urnted life Mutual agency united habilty 6. kaa oi formation On 3 suaty 1, 2019, BI and B2 formed a partnerstp. Bt contributed cash while B2, previous 2 Scie wietor, contributed property other than carb, snchuding realty subject to a mortgage, which the nip assumed. B2's capital account at January 1, 2019 should be recorded at The fair value of the property at January 1, 2019 b, B2's book value of the property at January 1, 2019 © The fair value of the property less than the mortgage payable at January 1, 2019 4. 82's book value of the property less than the mortgage payable at January 1, 2019 3. If partners share profit evenly among them, ther zny oss shat! be allocated to partners based on ‘a. Equal sharing Partners’ average capital b U. Surtners’ follow-up capital 4. It partners did not agree on any prufit sharing scheme, the partnership profit shall be divided among them based on ‘a. Equal sharing Existing capital b. Initial investment J. Additional investment 5. Partnership capital and drawings accounts are similar to the corporate a.” Retained earnings account b. Preferred and common stock accounts €.Paid:-in capital and retained earnings accounts d. Pakd-in capital, retained earnings and dividends accoun ©. Apartner’s drawing account ss, in substance capital account b. A contra-capital account . Asalary expense account dd. Aloan account (a loan from the partnership) 7. The admission of a new partner under the BONUS method wali result 9 bonus to a. The old partners only b. The new partner only Both the new partner and the old partners 3. Either the new partner or the oid partners, burt not both 8. Who may acquire the ownership interest of a partner who is sthidrawing from a partnership? ‘a. New investor c. Existing partners b. The partnership Any of the chores 9. Which of the following is NOT considered a legitimat expense of a partnership? ‘2. Supplies used in the partners’ offices b. Salaries for management hired to run the dusiness C._ Interest paid to partners based on the amount of invested capital 4G. Depreciation on assets contributed to the partnersiup by partners 10. What is the preferred method of resolving 2 partner's deficit talance? aS The partnership must sell assets in order to cover the deticit balance b. The other partners must contribute persona! assets to cover the deficit balance Phe partner with a deficit balance must contribute personal assets to cover the de regardless of personal condition a. The partner with a deficit balance must contribute personal assets to cover the deficit only ifthe partner's personal assets exces personal abilities 11. The following is the prionty sequence in which liquidation proceeds will be distributed for a partnersiip onpartnership drawings, partnership liabilties, partnership loans, partnership capta balances b. Partnership liabilities, partnership loans, partnership capital balances C)_ Partnership loans, partnership liabilties, partnesstup capital balances &. Partnership liabilities, partnership capital barences p>rtnership loans, Wn to the partners should be made in accord 12. In partnership liquidation, the final cash distrit 'a. Partners’ profit and loss ratio Balances of the partners’ capital accounts. Ratio of capital contributions by the partners Ratio of capital contributions less withdrawals by the partners of 2 pages.RSQ. The Review School of lcconedtancy TA-37A TA (AFAR): PARTNERSHIP, CORPORATE LIQUIDATION & HOME OFFICE - BRANCH 13. Which of the following best illustrates the insclvency of a corpor a. The corporation has negative working capit 1 b. A deficit in the corporation's retained earnings ranch ©. Shipments of merchandise are made ty ‘Ite branch d. Tt allocates expenses to the branch that were paid by the home office 22. In Home Office and Branch merchandise transfers. the use of Shipments to Branch account by the Home Office and the use of Shipments from Home Gifire account by the branch indicate thot the inventory system employed a. 18a periodic inventory system b. Isa perpetual inventory system cc. Isneither perpetual nor periodic inventory systeri 4. Cannot be determined from the information vrowided 23. The home office bills its branch for merchara2 transters above cost. In the home office separate financial statements, the allowance for uniualzzed pr-“t im bianch inventory account would appear in the financial statements of the home office as. ‘a. Addition to the cost of goods sold ©. An operating expense of the current period b. Deduction from the cost of goods sold d. Deduction from the investment in branch account 24, What is the reason why the home office cannot report inventory shipments to branches as sales? ‘a. The principle of conservatism b. The inventory transfer is considered as a rusted party transaction Only inventory transactions between the company. und outside third parties can be considered as sales 6. There 1s no practical means of determiniaq whether transfer prices approximate those that would occur in an arms-lengih transacticn hetween mdependent parties, 25. In preparing the combined financial statements af the hame office and its various branches: ‘a. Both reciprocal and nonreciprocal accounts are combined b. Both reciprocal and nonreciprecal accounts are elirninated Reciprocal accounts are eliminated but nonrcciprocal accounts are combined 4. Reciprocal accounts are combined but nonrecipracal accounts are eliminated Next: TA - 378 (Business Combinations & Consoliated Financial Statements)© RSM -The Rewiew School of lccomAancy * Theorg of lccouris 10. an 12 TA-37B: BUSINESS COMBINATIONS & F.S. CONSOLIDATION Sources: PAS 27/PFRS 3/PFRS 10/Applictble AICPA/Various test banks A business combination 1s defined as ‘A transaction in which an acquirer abtains contro! of an acquiree b. A transaction in which one entity obtains control of one or more entities A transaction in which an acquirer obtains control of one or more businesses dA transaction in which an acquiree obtains control of one or more businesses It 1s the power to govern the financial and operating policies of an entity or business so as to obtain benefits from its activities a Contro! c. Hostile takeover b. Significant influence J. Corporete spin-off In a business combination, the ACQUIRER 1s the party that 2. Sells the acquired entity ©. Recerves the acquisition consideration b. Obtains control of the other entities __d._ Concedes control over the acquired entities In a business combination, the ACQUIREE 1s the party that a. Pays the acquisition consideration Obtains control of the net assets acquired b. Finances the business combination d._Gives up contre! over the net assets acquired Which of these relationships would describe a STATUTORY MERGER? a. Gorgie Company + Chnssie Company = Gergie Company b. Asser Company + Tamayo Company = Green Company Connie Company + Tony Company = Zweet Couple Company d. Papa Company + Yaya Company = Papa Company arid Yaya Company HORIZONTAL business combinations occur when an entity purchases which of the following? a. Asupplier . Acompetitor b. Acustomer 1d. Acompany belonging to a different industry ‘An entity shall account for each business combinaticn by appiying the a. Equity method c. Propartionate consolidation b. Acquisition method G. Pooling of interest method ‘The ACQUISITION METHOD used in business combinations involves all of the following steps, except ‘a. Identifying the acquirer b. Determining the acquisition date (also known as ‘closing date’) c._ Recognizing and measuring identifiable assets acquired and liabilities assumed Recognizing and measuring goodwill and amortizing it over estimated useful life ‘The ACQUISITION DATE for a business combination 1s the date on which a. The business combination 1s announced to the public b. The acquirer effectively obtains control of the acquirer c._ The acquirer announces the acquisition to the scquiree G4. Asubstantive agreement between the comovning parties is reached ‘An acquirer might obtain control of an acquiree 1) By transferring cash and other assets. 11). By issuing equity secuntties Tl) By incurring habiities a. only © Torti b. Torll d. 1, Mort ‘The consideration transferred in a business combination shali be measured at a. Fair value b. Carrying amount Fair value or carrying amount, whichever 1s ower 6. Fair value or carrying amount, whichever is higher The acquirer shall measure the identifiable assets acquired and labilties assumed at their acquisition date ‘3. Fair values © _Depreciable amounts b. Carrying amounts 4 Recoverable amounts Page 1 of 3 pagesRSQ. The Rerrew School of Cecowiamey TA-37B TA (AFAR): BUSINESS COMBINATIONS & F.S. CONSOLIDATION 13, Which of the following 1s considered as part of consideration transferred in a business combination? a. Direct costs (e.9., lega! fees; finder’s fees; brokerage fees; audit fees) b. Indirect costs (e 9., costs of maintaining an acquisition department) ©. Cost of issuing debt and equity securities d. Contingent considerations 14, Goodwill recognized in a business combmator ould be 2. Whitten off against retained earnings b. Recognized as an intangible asset and amortized over its useful life © Recognized as an intangibie asset end tested regularly for impairment 4. Recognized as an intangible asset and tested for impairment when a trigger event occurs 15. Under the acquisition method, when the acquirer's interest in the fair value of net identifiable assets 1s greater than the considerations transferred im a business combination, the excess 1s accounted for as A goodwill that shall be amortized foro more than 20 years A goodwill that shall not be amortized inut tested regularly for impairment ‘Again on bargain purchase recognized! in ft or loss after doing reassessment A gain on bargain purchase recognized in profit or joss before daing reassessment 16. An acquirer holds 40% equity inverest im an acquiree and then subsequently purchases another 40% ‘equity interest in order to gain contro! over the acquiree. This illustrates a business combination a. Achieved in stages Based on mutual shareholdings b. Based on reverse acquisiticn d._ Involving entities under common control 17. These are the financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity. a. Separate financial statements Combined financial statements b. Projected financial statements 4d. Consolidated financial statements 18, When one entity controls the business operations of another entity, the business combination results in which of the following type of relatiorish.o? a. Merger ©. Parent subsidiary b. Partnership J Investor-associate 19. In the context of consolidated financial reports, a GROUP is ‘An entity that has no subsidiaries a subsidiary entity of another entity a parent entity and all its subsidiarier fan entity that has one or more sub: 20. Consolidated FS shal! include the financia Parent company and all of its dor estic associates Parent company and all of its uumestic “ubsidianes, Parent company and ail of its domestic and foreign associates Parent company and all of its domestic and foregn subsidiaries aoge 21. Consolidated FS shall include the finariciat statements of the Parent company and all of sts domestic subsidiaries only Parent company and all of its subsidiaries with similar activities Parent company and all of its subsidiaries with dissimilar activities Parent company and all nf its subsidiarios with similar and dissimilar activities 22. Under PFRS 10, an investor controis ar invesiee if the investor has the: 1), Power over the investee, i.e. the investor has existing rights that give it the ability to direct the "relevant activities (the activities that significantly affect the investee’s returns) TT), Exposure, or rights, to veriable returns '7or1 its involvement with the investee. III) Ability to use its power over the investee to affect the amount of the investor's returns. ‘a. Land Il Mand It b. Land i di, Mand i 23. Control 1s automatically presumed to exisi where the parent either directly or indirectly through subsidiaries owns ‘more than 25% but less than 50% of the voting power of an entity b. more than 10% but less than 25% of te voting power of an entity . more than 50% of the voting power of an entity 4. 50% or more of the voting power of an entity Page 2 of 2 pages a ©RSA. The Review School of lecorectancy TA-37B TA (AFAR): BUSINESS COMBINATIONS & F.S. CONSOLIDATION 24, Which among the following concitions must be met for a parent company NOT to be required to present consolidated financial statements? 1). The parent entity is itscif a wholly or pattictiy owed subsidiary of another company. 11) The parent entity's debt or equity instrumente are not traded in a public market, 111) The parent entity did not Me ts financia statements with SEC for the purpose of issuing any class of instruments in a public market a. Tonly c. Landi b. Land It 41, Wand Itt 25. A subsidiary is EXCLUDED from consolidation when a. Itisa foreign subsidiary b. Its business activities are uissimitar trom those of the other entities within the group It operates under severe long-term restrictions which significantly impair its ability to transfer funds to the parent 4. Control ts intended to be temporary as the subsidiary 1 held exclusively with a view of disposal within tweive months froin acquisition 26. When an entity prepares separate FS. investmer entities are accounted for either: 1) At cost M1) In accordance with PFRS ¢ TID) Using the equity method based on PAS 78 a and I c. Wand tt b. Tand II 5 1 Wand in subsidiaries, associates and jointly controlled 27. When preparing consolidated financial starer entity transactions are recorded in the ‘a. Accounting records of reporting ety b. Accounting records of parent entity Accounting records of subsidiary 4. Consolidation worksheet 's, adjustments for pre-acquisition equity and inter~ 28. Consolidated financial statements are prepared using the following presentation method a. Gross © Line-by-tine b. One-line 4. Liquidation method 29. Papa Co. owns 90% of Son Co. Durire the current year, Papa Co. sold goods to Son Co. Son Co. sold all these goods to outside customers in che cavrent veas.. For purposes of consolidating the FS of Pappy and Son, how should this transactior. 3¢ adjus:e0? ‘2. Sales and cost of sales shoula lie reduced by 100% of the intercompany sales b. Sales and cost of sales should be reduced by 90% of the intercompany sales c. Profit should be reduced by 90% of tne gross profit on intercompany sales, d. No adjustment is necessary 30. Under PFRS 10, NON-CONTROLLING INTEREST means The total equity of the combined! group “The equity in a subsidiary not attrisutab!2, directly or indirectly, to a parent entity ‘The equity in the parent entity otner tian the portion owned by the subsidiary entity The equity in the econome entity utier then thet which can be attributed to the subsidiary entity 31. Under PFRS 10, the non-controlling interests in the consolidated statement of financial position must be presented ‘a. Within long-term fiabilities b. Within the parent shareho'ders’ equity c., Separately between the liability sectiwn and the equity section 4d. Within equity but separate from the equity of the owners of the parent 32. For purposes of consolidating FS, tne uiffersace between the end of the reporting period of the subsidiary and that of the parent should by NOT more than ‘a. One month b. Two months Three months 4. Six months Page of 3 pages10. aL 12. 13. Ce RSA ~The Review School of Vcenuntomeg * Theor, of Account TA-37C: FOREIGN CURRENCY & HYPERINFLATION Sources: PAS 21/PAS 29/Applicabic AICPA/Variaus test banks Its the currency of the primary economic environment 1 which the entity operates. 2. Functional currency ©. Foreign carrency b._ Presentation currency @. Reperting entity 3. Fake currency € Forteted c rrency b. Foreign currency Presentation currency ‘The most relevant exchange rate to be quoted by # vank to an importer would be. a. Selling spot rate c Fornad rate b. Buying spot rate J. Backward rate Monetary items are best described as Piant and equipment All items that are contingent in nature All intangible items including goodwill Units of currency held and assets and liebihties to ue received or paid in fixed numbers of ‘currency units Under PAS 21, which of the following will be regard as @ monetary item? ‘a. Inventory © jand and buildings b. Accounts receivable Property, plant and equipment When translating into the functior ency, monetary liabilives are translated using the ‘a. Average exchange rate prevailing for the pericd b. Exchange rate current at end of reporting period c. Exchange rate current at the date the item was first recorded 4. Exchange rate prevailing at the end cf the last reporting, period When translating into the functional currency, forci:: currency denominated non-monetary items measured using historical cost must be translated wsing the 3. average rate for the reporting period «. exchange rate at the date of the transaction b. rate current at end of reporting period ¢ sate prevailing at the end of the last financial year If foreign currency denominated non-monctary items are measured using the fair value method, they must be translated into the functional currency using the: a. exchange rate at the transaction date b. closing exchange rate for the financial year exchange rate current at end of report:na period 6. exchange rate at the date when the fair value was determined When translating foreign currency denominated financial statements into the functional currency, the exchange differences are recognized ‘a. asa deferred asset or liability b. asa separate component of equity c. directly in the retained earnings account das an item of gain or loss in the statement of pr fit oF loss & other comprehensive income ‘An exchange difference that results from a severe devaluation of currency against which there 1s 0 practical means of hedging shall be charged to a. Deferred foreign exchange loss and amortized over the useful life of the asset b. Foreign exchange loss, recognized in the »"juty section of the balance sheet c. Related asset and amortized over the usetul lite of the asset d. Foreign exchange loss, recognized in the income statement Itis the currency in which the financial statements oe prewentcd ‘a. Fake currency © Funetwrat curency b. Foreign currency d. Presentation currency Page 1 of 2 pagesRS - The Review School of leconestoney TA-37C TA (AFAR): FOREIGN CURRENCY & HYPERINFLATION tems 14 to 21 are based on the following Translation of Financial Statements of Foreign Operations Indicate the exchange rate to use in translating the FS of foreign operations (e.g., foreign subsidiary) into the presentation currency of the reporting company (e.g., parent company). Choose one from the following rates: CLOSING RATE / AVERAGE RATE / HISTORICALRATE + Non-Hyperinflationary Economy | Hyperinflationary Economy r (Current Rate Method) (PAS 29) Assets ia] Closing Rate i8 Closing Rate Liabilities 15 Closing Rate 19 Closing Rate | ‘Shareholders’ Equity | 16 Historical Rate 20 Closing Rate [Income & Expenses | 17 ‘Average Rate* 21] Closing Rate Under PAS 21, income and expenses in income statement are translated at the exchange rate at the date of transaction or the average rate for the period when this is a reasonable estimation. (See item no. 22 below) 22. In translating the financial statements of foreign operations, income and expenses are translated at 2. Closing rate Forward rate b. Future rate d. Exchange rate at the date of transaction 23, When translating into the presentation currency, the translation difference is recognized In profit or loss b. In retained earnings Asa separate component of equity 4. Asan asset or liability, depending on whether it is a debit or credit balance 24. Under PAS 29, which is NOT listed as among the indicators of hyperinflation? 2. People prefer to keep their wealth in monetary assets b. People prefer to keep their wealth in relatively stable foreign currency ¢. The cumulative inflation rate over three years exceeds or is approaching 100% d. Credit sales and purchases take place at prices that compensate for the expected loss of Purchasing power during the credit period even if credit period is short 25. Under PAS 29, an entity that operates under a hyperinflationary economy is required to present information on the effect of changing prices in ‘a. The auditor's report b. The body of financial statements c. The notes to the financial statements d. The management report submitted to the company shareholders 26. The FS of an entity that reports in the currency of a hyperinflationary economy are stated in terms of 2. Current cost b. Historical cost c. Lower of cost or market value d. Measuring unit current at the balance sheet date 27. In hyperinflationary economy, balance sheet amounts not expressed in the measuring unit current at balance sheet date are restated by applying the ‘a. General price index cc. Suggested retail price index b. Consumer price index d. Manufacturer price index 28. In a hyperinflationary economy, monetary items ’a. Are restated using the general price index b. Are restated using the specific price index Are not restated because they do not represent money held and items to be received or paid in money d. Are not restated because they are already expressed in terms of the measuring unit at the balance sheet date 29. Which of the following is NOT considered as a monetary item for purposes of restating the financial statements? ‘a. Allowance for doubtful accounts . Discount on bond payable b. Accumulated depreciation d. Advances to employees 30. The gain or loss on the net monetary position in a hyperinflationary economy shall be charged to ‘a. Experience cc. Retained earnings b. Profit or loss d. Other comprehensive income Page 2 of 2 pages ©RS The Review School of Decouritancy » Theor of lccomnis TA-37D: COST ACCOUNTING, NGAS & NONPROFIT ORGANIZATIONS 10. uw 12. 13. 14 Sources: CMA/CIA/AICPA/NGAS/Practica’ fcc-winting 2 Reviewer by Antonio Dayag ACCOUNTING rect material costs are Prime and conversion costs ¢. Conversion and manufacturing costs b. Prime and manufacturing costs, d. Prime, conversien and manufactuning costs Utilities expense incurred in production facilities (¢.9., water, heat and light) is classified as a. Factory overhead Prime cost b. Period cost d. Administrative overhead Actual, normal and standard cost systems may be used it con,tinetion with a. Process costing only Either jo0 order or process costing b. Job order costing only 4. Neither job order nor process costing In a job order cost system, direct labor costs usually are recorded initially as an increase in ‘2. Factory overhead applied . Finished goods b. Factory overhead control 4. Work in process In job order costing, the application of FOH would be retlevte:! in the general ledger as an increase in ‘a. Factory overhead control fc. Work process b. Finished goods 4. Cost of gands svid The most common treatment of uncer- and over zpplied overhead costs is to close it out to 2. Work in process Cost of goot, sold b. Retained earnings <. Finished goods The appropriate method for the disposition of under applied or over-applied factory overhead ‘a. Is to cost of goods sold only b. Isto finished goods inventory only c. Depends on the significance of the amount 4d. 1S apportioned to cost of goods sold and fintshed goods inventory Normal spoilage is generally classified as a. Extraordinary item © Product cost b. Period cost 4. Deferred charge If the amount of spoilage in a manufacturing process 15 abnormal, it should be classified as a ‘a. Deferred charge Period cost b. Joint cost d. Product cost Which one is most likely to use process costing in atcounting for oroduction costs? ‘a. Road builder . Newsn@ser publisher b. Electrical contractor i. Avtomobile repair shop. In process costing, units received by a depaitrert from another department is treated by receiving department as ‘a. Raw materials &. Finished goods b. Work in process G. Equrvatent units ‘The cost per equivalent unit under the weighted average method of process costing considers ’2. Current cost only b. Current cost plus cost of ending work in process (WIP) inventory c. Current cost plus cost of beginning work in process sn ventory d. Current cost less cost of beginning work in process inventory Current period's cost per equivalent unit under "iO process costing considers current period costs ‘a. Only ©. “Less cost of ceginning WIP b. Plus cost of beginning WIP 3. Plus cost of ending WIP FIFO process costing will produce the same cost of goods manufactured as the average method if 2. The goods produced are homogeneous in nati b. There are no lost units There is no beginning inventory 4d. Beginning and ending inventories are cqualRSA. The Review School of Oecowntorey TA-37D TA (AFAR): COST ACCOUNTING, NGAS & NONPROFIT ORGANIZATIONS 15. Joint costs are used for > ‘a. Controlling costs b. Setting the selling price of a product c. Determining whether to continue producing an item 4. Determining inventory costs for accounting purposes 16. Joint product costs are generally allocated using the A a. Relative sales value . Relative profitability b. Additional costs after split-off 6. Direct labor hours 17. By-products 8 2. Are regarded as the main products of the joint process b. Have relatively less sales value than joint products c. Have relatively less sales value than scrap 4. Occur before the split-off point 18. Standard cost variances are not closed to A a. Direct materials Finished goods . Work-in-process 4. Costs of goods sold 19. The most common treatment of variance (favorable or not) is to close it out to c ‘2. Work in process. c. Cost of goods sold b. Retained earnings d. Finished goods 20. A company uses a two-way analysis for overhead variance: budget (controllable) and volume. The volume variance is based on the 8 a. Total overhead application rate c. Variable overhead application rate b. Fixed overhead application rate d. No overhead application is allowed 21. An accounting system that collects financial and operating data on the basis of the underlying nature and extent of cost drivers is A a. Activity-based costing b. Cycle-time costing c. Variable costing 4. Target costing 22. Activity-based costing (ABC) first assigns costs to c 2. Products c. Activities b. Overhead 4. Departments 23. In comparison with firms that use plantwide overhead rates and departmental overhead rates, companies that have adopted activity-based costing will typically use: A a. More cost pools and more cost drivers b. More cost pools and fewer cost drivers . Fewer cost pools and more cost drivers. d. Fewer cost pools and fewer cost drivers 24. Generally, individual department rates rather than a plantwide rate for applying overhead would be used if . '2. Accompany wants to adopt a standard cost system b. Acompany’s manufacturing operations are all highly automated ¢. Manufacturing overhead is the largest cost component of its product cost ¢. The manufactured products differ in the resources consumed from the individual departments in the plant 25. In an ABC system, what should be used to assign a department's manufacturing overhead costs to products produced in varying lot sizes? 8 ’@. Asingle cause-and-effect relationship b. Multiple cause-and-effect relationships ¢. Relative net sales values of the products d. A product's ability to bear cost allocations 26. Which cost accumulate procedure 1s most appropriate for a just-in-time (JIT) production system? 8 2. Process costing b. Backflush costing ¢. Job order costing 4. Activity-based costing Page 2 of 4 pages ©RSA. The Review School of lccowrcomey TA-37D TA 8 (AFAR): COST ACCOUNTING, NGi 5 & NONPROFIT ORGANIZATIONS NGAS (Government Accounting) 1. What is the legal basis of the New Government Acccunting System (NGAS)? a. RA9298 c. CoA Circular No. 2002-003 b. 1987 Constitution of the Philippines. PD 145 2. Under NGAS, allotments by DBM are recorded in the registries a. Monthly c. At the beginning of the period b. Quarterly d. At the end of the period 3. Under NGAS, it is the allotment by tha Central office to its Regiena! office. a. Reguiar allotment ¢. Orainary Allotment b. Suballotment d Secondary Allotment It is an authorization issued by the DBM to government agencies to withdraw cash from the National Treasury through the issuance of Modified Disbursement System checks. a. Allotment c. Appropriation b. Obligation 4d. Notice of Cash Allocation 5. The following are the systems foliowed in the NGAS, EXCEPT: ‘a: Commercial accounting ¢. Responsibility accounting b. Double-entry bookkeeping Fund @-countiag 6. Which is not a basic feature of NGAS? ‘a. One-fund concept b. Two-column trial balance ¢. Three-digit account number syster 4. Four-digit responsibility account coding structire 7. Which is not a basic feature of NGAS? ‘a. Straight-line depreciation . Coroliary and negative (red) entries b. Allowance for doubtful accounts Gd. Perpetual ventory system: 8. Journals and ledgers are the book of accounts of the national government agencies. Which of the following journals shall be used under NGAS? a. Journal of checks issued © Journal of bris rendered b. Journal and analysis of obligations 6 Generai journal 9. Under NGAS, supplies and materials purchased for inventory purposes are recorded using a. First-in, first-out (FIFO) c. Weighted average b. Last-in, first-out (LIFO) d. Moving average 10. Petty cash fund being maintained by govern ant agencies shall be maintained under a. Fluctuating fund system c. Either of these b. Imprest system d. Neither ot these 11. Under NGAS, the standard residual value of deyreriabie assers ss equal to a. 10% of cost © P 1,000 b. Zero 4. ° 8,060 12. How frequent shall a government unit covered by NGAS prepare financial reports? a. Monthly c. Semrannually b. Quarterly Annually 13. Under NGAS, how frequent should the tral balance oe prepared? 2. Monthly Sem) annually b. Quarterly a Annually 14. A covering letter in transmitting an agency’: accounting reports to CcA, DBM and others agencies ‘a. Pre-closing trial balance Statement of management responsibility b. Post-closing trial balance G_ Notes to the FS 15, It is the allotment release by Local Government Units (LGU) or Department of Budget and Management to barangays. ‘a. Internal Revenue Allotment (IR) . Income from grants and donations b. Barangay Social Fund Subsidy ~ LGU Page 3.of 4 paves § ®ReSQA. The Review School of Accoutoncy, TA-37D TA (AFAR): COST ACCOUNTING, NGAS & NONPROFIT ORGANIZATIONS NONPROFIT ORGANIZATIONS 1. Its a legal and accounting entity that is operated for the benefit of society as 2 whole rather than for the benefit of an individual proprietor or group of partners or stockholders. B ‘a. Nongovernmental organization c. Government-owned & controlled companies b. Nonprofit organization d. De facto corporations 2. Nonprofit organizations (NPO) include all of the following, EXCEPT: D @. Professional associations Hospitals b. Schools, colleges and universities d._ Government-owned & controlled companies 3. Which of the following is not necessarily regarded as nonprofit organizations? 8 ‘a. Cooperatives. Country clubs b. Partnerships. 6. Labor unions 4. The charactenstics of NPO that resemble the characteristics of governmental units include ali of the following, EXCEPT. D a. Stewardship of resources c._Importance of budget b. Financing by citizenry d. Governance by board of directors 5. The characteristics of NPO that resemble the charactenstics of business entities include all of the following, EXCEPT “ D a. Governance by board of directors c._Use of accrual basis b. Measurement of cost expirations 4. No profit motivation 6. Financial statement of not-for-profit organization focuses on A ‘2. Basic information for the organization as a whole b. Standardization of funds nomenclature ¢._ Inherent differences of not-for-profit organization that impact reporting presentations 4. Distinctions between current fund and noncurrent fund 7. Financia! statements of nonprofit organization includes all of the following, EXCEPT: 8 ‘2, Statement of financial position c. Statement of activities : b. Statement of changes in equity 4d. Statement of cash flows 8. The statement of financial position of nonprofit organization displays the organization's . a. Assets, liabilities and equity Excess of assets over liabilities b. Assets, liabilities and fund balance 4. Assets, liabilities and net assets 9. The statement of financial position of NPO shall report separately 3 classes of net assets that exclude A ‘2. Donated net assets c. Temporanily restricted net assets b. Unrestricted net assets d. Permanently restricted net assets 10. Accounting for nonprofit organizations is essentially A ‘a. Fund accounting < Commercial accounting b. State accounting 6. Managenal accounting 11. This type of fund includes all the assets of a nonprofit organization that are available for use as authorized by the governing board and are not restricted for specific purposes. It is regarded as, A ‘a. Unrestricted fund Permanent endowment fund b. Restricted fund d. Term endowment fund 12. This type of fund is used to account for asset available for current use but expendable only as authorized by the donor of the assets. 8 ‘a. Unrestricted fund Plant fund b. Restricted fund d. Agency fund 13. Net assets that are restricted by the governing board of a non-government, not-for-profit organization are reported as part of: c ‘a. Permanently restricted net assets Unrestricted net assets b. Temporarily restricted net assets d. Any of these, depending on the terms 14. A voluntary health and welfare organization 1s required to prepare a c ‘a. Statement of changes in equity . Statement of functional expenses. b. Statement of comprehensive income d._ Statement of management responsibility 15. The “contractual adjustment account” of a nonprofit hospital 1s a (an) 8 ‘a. Expense account c. Loss account b. Contra-revenue account d Asset account Page 4 of 4 pages