1. Which of the following will be most likely classified as equity instrument?

a. A contract to deliver as many of the entity’s own equity instruments as are equal in
value to P10 million
b. A contract to deliver as many of the entity’s own equity instruments as are equal in
value to the value of 100 sacks of rice
c. Both a and b
d. Nether a nor b

2. The entity should classify demand deposits, including current accounts, deposit accounts
and similar contracts that arise when numbers act as customers as

a. Financial assets
b. Financial liabilities
c. Equity
d. Compound financial instruments

3. The entity’s charter states that redemption are made at the sole discretion of the entity. The
charter does not provide further elaboration or limitation on that discretion. In its history,
the entity has never refused to redeem members’ shares, although the governing board has
the right to do so. The entity should classify its members’ shares as

a. Financial assets
b. Financial liabilities
c. Equity
d. Compound financial instruments