1.

The following Statements pertain to the Conceptual Framework for the Preparation and Presentation
of Financial Statements. Which is (are) FALSE

Statement 1: The Conceptual Framework is concerned with general purpose financial statements
including

consolidated financial statements.

Statement 2 : The Conceptual Framework is intended to establish the objectives and concepts for use in

developing standards of financial accounting and reporting.

Statement 3: The Conceptual Framework has the highest level of authority in the application of

accounting standards of financial accounting and reporting.

A. Only Statement I is false

B. Only Statement III is false

C. Statements I and III are false

D. All of the Statements are false

2. The Financial Reporting Standards Council (FRSC)

A. Works under the direct supervision of the Professional Regulation Commission

B. Has the power to issue and revoke CPA license

C. Is the authority with respect to financial accounting standards in the Philippines

D. Crafted the Implementing Rules and Regulations (IRR) of RA 9298 or the Philippine Accountancy Act
of 2004

3. Generally accepted accounting principles that are being currently implemented in the Philippines
comprise

A. Only one Financial Reporting framework

B. Two Financial Reporting Frameworks

C. Three Financial Reporting Frameworks

D. More than three Financial Reporting Frameworks

4. Which of the following statements about “due process” in accounting standard setting and the
Conceptual Framework is (are) false?
I. The exposure draft issued by the accounting standard-setting body before an accounting standard is
approved for implementation gives CPA professionals the opportunity to participate in the standard-
setting process.

II. After the FRSC has approved an accounting standard, it should be automatically implemented by all
reporting enterprises in the Philippines.

III. The Conceptual Framework constitute the accounting laws of the accountancy profession and
violations of its provisions will be meted corresponding sanctions by the regulatory bodies

A. I and II are false

B. II and III are false

C. I and III are false

D. All Statements are false

5. Which of the following statements about Philippine GAAP is (are) false?

I. The Philippine Interpretations Committee issuances are an indication that the IFRSs (or PFRSs) are
rules-based.

II. The Securities and Exchange Commission (SEC) regulates all commercial and not-for-profit reporting
enterprises except micro entities.

III. All reporting enterprises entities in the Philippines including regulated entities are required to follow
full Philippine Financial Reporting Standards (PFRSs) in the preparation of financial statements.

A. I only

B. II only

C. I and III only

D. I, II, and III