2O Multiple Choice Questions about PAS 1” Presentation of Financial Statements and PFRS 1”

First-time Adoptation of Philippine Financial Reporting System”

1. Which of the following are not items required by PAS 1 Presentation of Financial Statements to
be shown on the face of the statement of financial position.
A. Property, plant and Equipment
B. Intangible Assets
C. Biological Assets
D. Government grants
2. An asset should be classified as a current asset when it:
A. Is expected to be realized in, or is held for sale or consumption in, the normal course of
the entity’s operating cycle.
B. Is held primarily for trading purposes and expected to be realized within 12 months.
C. Is cash or cash equivalent asset which is not restricted in it’s use.
D. All of the above.

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3. The __________ of an entity is the time between the acquisition of assets for processing and

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their realization in cash or cash equivalents.

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A. Operation cycle

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B. Operating cycle

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C. Operational cycle

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D. Accounting cycle
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4. It is the most significant indicator of a company’s financial performance.
A. Statement of Financial Position
B. Statement of Profit or Loss and other comprehensive income
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C. Statement of changes in equity

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D. Statement of Cash Flows

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E. Notes to Financial Statements

F. None of the above.
5. Per revised PAS No. 1, a complete set of financial statements comprises:
A. Statement of Financial Position
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B. Statement of Profit or Loss and other comprehensive income

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C. Statement of changes in equity

D. Statement of Cash Flows
E. Notes to Financial Statements
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F. None of the above.

G. All of the above.
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6. It provide narrative description or disaggregation of items presented in the statements and

information about items that do not qualify for recognition in the statements.
A. Statement of Financial Position
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B. Statement of Profit or Loss and other comprehensive income

C. Statement of changes in equity
D. Statement of Cash Flow
E. Notes to Financial Statements
7. It presents a summary of the changes in capital such as investments, profits or loss and
withdrawals during a specific period.

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 A. Statement of Financial Position
B. Statement of Profit or Loss and other comprehensive income
C. Statement of changes in equity
D. Statement of Cash Flows
E. Notes to Financial Statements
8. It reports the amount of cash received and disbursed during the period.
A. Statement of Financial Position
B. Statement of Profit or Loss and other comprehensive income
C. Statement of changes in equity
D. Statement of Cash Flows
E. Notes to Financial Statements
9. It refers to the availability of cash in the near future after taking account of the financial
commitments over this period.
A. Liquidity
B. Financial Flexibility

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C. Solvency

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D. Stability

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10. It refers to the availability of cash over the longer term to meet financial commitments as they
fall due.

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A. Liquidity
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B. Financial Flexibility
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C. Solvency
D. Stability
11. It is the ability to take effective actions to alter the amounts and timings of cash flows so that it
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can respond to the unexpected needs and opportunities.

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A. Liquidity
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B. Financial Flexibility
C. Solvency
D. Stability
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12. The ______ simply lists the assets, followed by the liabilities then by the owner’s equity in
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vertical sequence.
A. Report format
B. Account formal
C. Usual format
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D. Unformal format
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13. It lists the assets in the left and the liabilities and owner's equity on the right.
A. Report format
B. Account formal
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C. Usual format
D. Unformal format
14. It include tangible, intangible, operating and financial assets of a long term nature.
A. Non-current assets
B. Current Assets
C. Intangible Assets

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 D. Non- fixed Assets
15. It includes inventories and trade receivables that are sold, consumed, and realized as part of the
normal operating cycle.
A. Non-current assets
B. Current Assets
C. Intangible Assets
D. Non- fixed Assets
16. Which of the following statements is false?
A. PAS 1 offers two possible formats for the statement of Profit or loss or separate profit or
loss section by function or by nature.
B. A current liability is expected to be settle in the normal course of the entity’s operating
cycle.
C. Interest-bearing and non-interest-bearing liabilities and provisions will be shown
separately, classified as current and non-current as appropriate.
D. None of the above.

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17. The notes to the financial statements should perform the following functions.

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A. Present information about the basis on which the financial statements were prepared

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and which specific accounting policies were chosen and applied to significant
transactions/events.

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B. Disclose any information, not shown elsewhere in the financial statements, which is
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required by IFRS.
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C. Show any additional information that is relevant to understanding which is not shown
elsewhere in the financial statements.
D. All of the above.
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18. The accounting policies section should describe the following:

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A. The measurement basis used in preparing the financial statements.

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B. The other accounting policies used, as required for a proper understanding of the
financial statements.
C. A and B.
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D. None of the above.

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19. PAS 1 ends by listing some specific disclosures which will always be required if they are not
shown elsewhere in the financial statements:
A. The domicile and legal form of the entity, it’s country of incorporation and the address of
the registered office.
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B. A description of the nature of the entity’s operations and its principal activities.
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C. The name of the parent entity and the ultimate parent entity of the group.
D. All of the above.
20. The standard list the following as the minimum to be disclosed on the face of the statement of
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profit or loss:
A. Revenue
B. Finance costs
C. Shared of profits and losses of associates and joint ventured accounted for using the
equity method.
D. A single amount for the total of discontinued operations

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 E. All of the above.

ANSWER KEY ON PAS 1” Presentation of Financial Statements and PFRS 1” First-time Adoptation of
Philippine Financial Reporting System”

1. D
2. D
3. B
4. B
5. G
6. E

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7. C

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8. D

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9. A

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10. C

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11. B
12. A
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13. B
14. A
15. B
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16. D
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17. D
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18. C
19. D
20. E
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