The amount of time that is expected to elapse until an asset is realized or otherwise

converted into cash is referred to as

a. Liquidity
b. Solvency
c. Financial flexibility
d. Exchangeability

Which method of income measurement is used in the preparation of the statement of

comprehensive income?
a. Capital maintenance approach
b. Transaction approach
c. Cash-flow approach
d. Income components approach

Which of the following is a current asset?

a. Cash surrender value of a life insurance policy of which the company is the beneficiary.
b. Investment in equity securities for the purpose of controlling the issuing company.
c. Cash designated for the purchase of tangible fixed assets.
d. Trade installment receivables normally collectible in 18 months

If a company prepares a consolidated statement of comprehensive income, IFRS requires

that net income be reported for
a. the majority interest only.
b. the minority interest only.
c. both the majority interest and the minority interest.
d. as a single amount only.

The presentation of non-current liabilities in the statement of financial position should

disclose
a. maturity dates.
b. interest rates.
c. conversion rights.
d. All of these choices are correct.

Working capital is
a. capital which has been reinvested in the business
b. unappropriated retained earnings.
c. cash and receivables less current liabilities.
d. none of these choices are correct.

On the statement of financial position all of the following are reported as investments
except
a. Bonds, ordinary shares, and long-term notes.
b. Non-controlling interest.
c. Pension funds.
d. Non-consolidated subsidiaries.

Under the equity method of accounting for investments, an investor recognizes its share of
the earnings in the period in which the
a . investor sells the investment.
b. investee declares a dividend.
c. investee pays a dividend.
d. earnings are reported by the investee in its financial statements.
When a company holds between 20% and 50% of the outstanding ordinary shares of an
investee, which of the following statements applies?
a. The investor should always use the equity method to account for its investment.
b. The investor should use the equity method to account for its investment unless
circum-stances indicate that it is unable to exercise "significant influence" over the
investee.
c. The investor must use the fair value method unless it can clearly demonstrate the ability
to exercise "significant influence" over the investee.
d. The investor should always use the fair value method to account for investment

Deep Diver, Inc. hired a new controller in late 2020. The controller has not prepared
financial statements using IFRS before and needs your assistance. In compiling a complete
set of financial statements under IFRS, which of the following components must be
included?
a. A statement of financial position at the end of the period.
b. Notes, including a summary of significant accounting policies.
c. A statement of comprehensive income for the period.
d. All of these choices are correct.

When preparing a bank reconciliation, bank credits are

a. added to the bank statement balance.
b. deducted from the bank statement balance.
c. added to the balance per books.
d. deducted from the balance per books.

Which of the following statements concerning materiality, aggregation and offsetting is

correct?
a. An entity shall present aggregately each material class of similar items.
b. An entity shall present separately items of dissimilar nature or function unless
they are immaterial.
c. Assets and liabilities, and income and expenses, when material shall be offset against
each other.
d. The measurement of assets net of valuation allowance is not permitted because
technically it is offsetting

Where should goods in transit that were recently purchased F.O.B. destination be included
on the statement of financial position?
a. Accounts payable.
b. Inventory.
c. Equipment.
d. Not on the statement of financial position.
PAS 24, paragraph 9 provides that are parties are considered related if one party has, except
a. The ability to control the other party.
b. The ability to exercise the significant influence over the other party.
c. Joint control over the entity.
d. The contract to provide finance or service in the course of normal dealings

PAS 10, paragraph 3 defines them as those events, whether favorable or unfavorable, that
occur between the end of reporting period and the date on which the financial statements
are authorized for issue.
a. Subsequent events
b. Events after reporting period
c. Events after the balance sheet date
d. Prior events

Which of the following changes would be accounted for prospectively?

a. Corrections of prior period errors
b. Change into expected life of a depreciable asset
c. First time presentation of consolidated financial statements
d. Changing from FIFO to weighted average for merchandise inventory

Interim reporting, which of the following should be accounted for on a time proportion
basis?
a. depreciation
b. cost of sales
c. productivity bonus
d. decline in the net realizable value of inventory items

Interim financial statements can be described as emphasizing

a. timeliness over reliability
b. relevance over comparability
c. comparability over neutrality
d. reliability over understandability

On April 1, 2020, the entity discovered that depreciation expense for 2019 was overstated.
The 2019 financial statements were authorized for issue on March 15, 2020. What must the
entity do?
a. Do nothing
b. restate the depreciation expense reported for 2019 into comparative figures of the
2020 financial statements
c. reduce depreciation for 2020
d. reissue the 2019 financial statements with the correct depreciation expense

Which statement is true about major customer disclosure?

a. A major customer is defined as one providing revenue which amounts to 10% or
more of combined external revenue of all operating segments.
b. the identities of major customers need to be disclosed
c. the entity shall disclose the total amount of revenue from minor customers
d. All of these statements are true about major customer disclosures

Within the statement of financial position where should the account non-controlling interest
(minority interest) be reported?
a. Non-current assets
b. Non-current liabilities.
c. Equity
d. Current liabilities

An example of an item which is not an element of working capital is

a. accrued interest on notes receivable
b. goodwill.
c. goods in process
d. short-term investments

The following are essential characteristics of an asset, except

a. The asset is controlled by the entity and a result of past transaction.
b. The asset is subject to depreciation.
c. The asset provides future economic benefits.
d. The cost of the asset can be measured reliably.

The following items are considered as noncurrent assets, except *

a. Deferred tax asset

b. Noncurrent asset held for sale
c. Investment property
d. Biological asset

Which of the following statements concerning operating cycle is incorrect?

a. It is the time between the acquisition of assets for processing and their realization in
cash or cash equivalent.
b. It is significant as it is the basis of determining the proper classification of assets into
either current or noncurrent.
c. All assets that are expected to be realized, sold or consumed within the normal operating
cycle are current.
d. It is always longer than 12 months.

The essential characteristics of liability are as follows, except

a. The liability is the present obligation of a particular entity.
b. The liability arises from past transaction.
c. The liability shall be settled using current asset.
d. The settlement of the liability requires an outflow of resources embodying

If there is impairment loss of a disposal group, how is the loss apportioned across the
assets? 
a. Apportion the loss to all assets in the group based on their carrying value, regardless of
existence of goodwill in the group
b. Apportion the loss to all assets in the group based on their fair value, regardless of
existence of goodwill in the group
 
c. If there is a goodwill in the group, the goodwill is written off first and any
remainder of impairment loss is allocated prorate to the noncurrent assets based on
their carrying value
d. If there is a goodwill in the group, the goodwill is written off first and any remainder of
impairment loss is allocated prorate to the noncurrent assets based on their fair value.

Which of the following statements concerning PAS 24: Related Party is incorrect? 
a. Related party transaction is a transfer of resources or obligation between related
when a price is charged.
b. Disclosure is required of related party relationships where control exists irrespective of
whether there have been transactions between the related parties.
c. The disclosure of related party transactions and outstanding balances in the separate
financial statements of a parent, subsidiary, associate or venturer is required.
d. Intragroup related party transactions and outstanding balances are eliminated in the
preparation of consolidated financial statements of the group.

Which of the following items shall not be included in the Stockholder’s Equity Section of
the Statement of Financial Position?
a. Subscription receivable collectible beyond one year
b. Bonds Premium
c. Treasury Shares
d. Revaluation Surplus

In closing the income summary account of a corporation that is profitable, which of the
following statements is true?
a. Share premium account is debited.
b. Retained earnings account is debited
c. Retained earnings account is credited
d. Income summary account is credited

It is the change in equity during a period resulting from transactions and other events, other
than changes resulting from transactions with owners in their capacity as owners
a. Profit or Loss
b. Other Comprehensive Income
c. Retained Earnings
d. Comprehensive Income

According to PFRS 5, when shall a noncurrent asset be classified as held for sale?
a. When the noncurrent asset will be abandoned.
b. When the noncurrent asset is available for sale in the ordinary course of business.
c. When the noncurrent asset is held for rental and capital appreciation.
d. When the noncurrent asset’s carrying amount will be recovered principally
through a sale transaction rather than through continuing use.
Which of the following is not required to be presented as minimum information on the face
of the statement of financial position?
a. Investment property
b. Contingent Liability
c. Deficit
d. Reserves

Which of the following errors could result in an overstatement of both current assets and
stockholders’ equity?
a. An understatement of accrued sales expenses.
b. Noncurrent note receivable principal is misclassified as a current asset.
c. Annual depreciation on manufacturing machinery is understated.
d. Holiday pay expense for administrative employees is misclassified as
manufacturing overhead.
On January 1, 2020, Aztec Princess Inc. had cash and share capital of P10,000,000. At that
date, the company had no other asset, liability, or equity balances. On January 5, 2020, it
purchased for cash P6,000,000 of equity securities that it classified as non-trading. It
received cash dividends of P800,000 during the year on these securities. In addition, it has
an unrealized loss on these securities of P600,000. The tax rate is 20%. Compute the
amount of net income/(loss).
a. P640,000
b. P800,000 
c. P(200,000)
d. P160,000

A property that cost 2,600,000 is measured for reporting purposes atP4,000,000, which is
the amount of cash (or cash equivalents) that could be obtained by selling the property in an
orderly disposal. Which measurement basis does this describe?
a. Current cost
b. Historical cost
c. Realizable value
d. Present value of future cash flows

On January 1, 2020, Jungle Flower Company. had cash and share capital of P10,000,000.
At that date, the company had no other asset, liability, or equity balances. On January 5,
2020, it purchased for cash P6,000,000 of equity securities that it classified as non-trading.
It received cash dividends of P800,000 during the year on these securities. In addition, it
has an unrealized loss on these securities of P600,000. The tax rate is 20%. Compute the
amount of comprehensive income.
a. P160,000
b. P200,000
c. P600,000
d. P640,000

Loire Corporation purchased 16,000 ordinary shares of Comma Co. for P528,000. During
the year, Comma paid a cash dividend of P13 per share. At year-end, Comma shares were
selling for P38 per share. Loire Corporation purchased the shares to meet a non-trading
regulatory requirement. What amount of total income will Loire Corporation report in its
income statement for the year?
a. none
b. P80,000
c. P208,000
d. P288,000

a. P400,000
b. P700,000
c. P1,400,000
d. P1,200,000

NIKE Inc. prepares quarterly financial statements. On March 30, 2020, one of the
warehouses of the company was destroyed by a massive earthquake and it incurred a loss
amounting to P2,000,000. The calamity loss was paid on May 5, 2020. What amount of loss
shall be presented in the Income Statement for the 2nd quarter ending June 30, 2020?
a. P2,000,000
b. P500,000
c. P1,000,000
d. Zero
a. P240,000
b. P205,000
c. P235,000
d. P340,000

a. P6,900,000
b. P6,400,000
c. P6,500,000
d. P6,300,000

a. P4,950,000
b. P5,150,000
c. P5,100,000
d. P4,850,000

On January 1, 2019, Wayne Inc. acquired a machine for P530,000 with useful life of 4 years
and residual value of P30,000. It is the company’s policy to use SYD method for
depreciation of its property, plant and equipment. On January 1, 2021, due to new
information, Wayne Inc. changed its depreciation method from SYD to Straight Line
Method. Aside from that, the revised useful life is 8 years from the date of acquisition. The
residual value Is reduced to zero. What is the depreciation expense of the machine for the
year ended December 31, 2021?
a. P22,500
b. P30,000
c. P55,000
d. P25,000

On January 1, 2019, Wayne Inc. acquired a machine for P530,000 with useful life of 4 years
and residual value of P30,000. It is the company’s policy to use SYD method for
depreciation of its property, plant and equipment. On January 1, 2021, due to new
information, Wayne Inc. changed its depreciation method from SYD to Straight Line
Method. Aside from that, the revised useful life is 8 years from the date of acquisition. The
residual value Is reduced to zero. What is the carrying value of machine on December 31,
2022?
a. P150,000
b. P135,000
c. P120,000
d. P130,000

On January 1,2020, Queen Inc. purchased an equipment for P120,000 with useful life of 4
years and residual value of P20,000. It is the company’s policy to use 200% Double
Declining Balance Method for depreciation of its property, plant and equipment. On
January 1,2021, due to new information, Queen changed its depreciation method from
Double Declining Balance Method to SYD Method. The remaining useful life as of January
1, 2021 is 2 years. The residual value is also revised to P15,000. What is the cumulative
effect of these accounting changes in the January 1,2021 Retained Earnings to be presented
in the 2020 Statement of Changes in Equity? (Ignore Income Tax)
a. P50,000 deduction in RE, 1/1/2021
b. P25,000 addition in RE, 1/1/2021
c. P30,000 deduction in RE, 1/1/2021
d. 0

On September 30, 2020, when the carrying amount of the net assets of Segment C was
P7,000,000, X company signed a binding contract to sell segment C for P12 million. The
sale is expected to be completed by January 31, 2021. In addition, prior to January 31,
2021, the sale contract obliges X Company to terminate certain employees of Segment C
incurring termination costs of P2,000,000 to be paid on June 30, 2021. The company
continued to operate Segment C throughout 2020. Revenue of Segment C throughout 2020
was P8,000,000, operating cost was P4,000,000.How much income should be reported as
income from ordinary activities of the discontinued segment for 2020, before tax?
a. 0
b. 2,000,000
c. 7,000,000
d. 8,000,000
How much will be reported as loss from ordinary activities after discontinued segment
during 2020? 

a. 1,300,000
b. 1,500,000
c. 1,600,000
d. 2,000,000

How much was the impairment loss during 2020?

a. 300,000
b. 400,000
c. 500,000
c. 600,000
Which of the following segments are reportable segments based on the quantitative
threshold set forth in IFRS 8? (Sample answer should be provided as: 123456-no comma or
anything, numbers only.) (In order)
126

Which of the following segments are not reportable segments based on the quantitative
threshold set forth in IFRS 8? (Sample answer should be provided as: 123456 -no comma or
anything, numbers only.) (in order)
345

Which of the following segments are reportable segments based on the quantitative
threshold set forth in IFRS 8? (Sample answer should be provided as: ABCDEF -no comma
or anything, letters only.) (in order)
BCDE
Which of the following segments are not reportable segments based on the quantitative
threshold set forth in IFRS 8? (Sample answer should be provided as: ABCDEF -no comma
or anything, letters only.)
AF

What amount of impairment loss should be recognized for 2020?

a. 300,000
b. 800,000
c. 900,000
d. 0
What is the measurement of the equipment that ceases as held for sale on December 31,
2021?
a. 3,200,000
b. 3,700,000
c. 3,500,000
d. 3,600,000

What amount should be recognized as gain as a result of the reclassification in 2021?

a. 800,000
b. 300,000
c. 400,000
d. 0

Using Dell Corp problem, which of the following amounts should be reported as prior
period adjustments in Dell Corp.’s 2021 and 2020 comparative financial statements?
a. 2021: P(50,000); 2020: P0
b. 2021: P0; 2020: P(50,000)
c. 2021: P0; 2020: P(25,000)
d. 2021: P0; 2020: P0

Using Dell Corp problem, which of the following amounts should be reported as net income
in Dell Corp.’s 2021 and 2020 comparative financial statements?
a. 2021: P180,000; 2020: P150,000
b. 2021: P150,000; 2020: P125,000
c. 2021: P180,000; 2020: P125,000
d. 2021: P205,000; 2020: P150,000
Bren Co.’s beginning inventory at January 1, 2020, was understated by 26,000, and its
ending inventory was overstated by 52,000. As a result, Bren’s cost of goods sold for 2020
was
a. Understated by 26,000.
b. Overstated by 26,000.
c. Understated by 78,000.
d. Overstated by 78,000.

On January 2, 2020, Air, Inc. agreed to pay its former president 300,000 under a deferred
compensation arrangement. Air should have recorded this expense in 2019 but did not do
so. Air’s reported income tax expense would have been 70,000 lower in 2019 had it
properly accrued this deferred compensation. In its December 31, 2020 financial
statements, Air should adjust the beginning balance of its retained earnings by a 
a. 230,000 credit.
b. 230,000 debit.
c. 300,000 credit.
d. 370,000 debit.

Prior to any adjustments for these errors and ignoring income taxes, Paul’s retained
earnings at January 1, 2020, would be
a. 75,000 understated
b. 75,000 overstated
c. 135,000 understated
d. 135,000 overstated

Using Davao Company, what is the net cash provided by operating activities?
a. P120,000
b. P130,000
c. P140,000
d. P165,000

Using Davao Company, what is the cash provided (used) in investing activities?
a. P10,000
b. (P100,000)
c. (P90,000)
d. (P340,000)

Using Davao Company, what is the net cash provided (used) in financing activities?
a. P150,000
b. P350,000
c. (P100,000)
d. (P250,000)

Using Davao Company, what is the increase/decrease in cash and cash equivalent?
a. P180,000
b. P(50,000)
c. P50,000
d. (P180,000)

SWT Co. provided the following data for the preparation of the statement of cash flows for
the current year: Increase in accounts receivable, P300,000; Decrease in income tax
payable, 170,000; Depreciation, 1,000,000; Net income, 250,000; Gain on sale of
equipment, 440,000; Loss on sale of equipment, 210,000. What is the net cash
inflow/(outflow) from operating activities?
a. P1,490,000
b. P550,000
c. P1,010,000
d. P950,000

Using Monkey Boy, what is the gross sales for year 2020 under accrual basis of
accounting?
a. P6,250,000
b. P6,150,000
c. P6,450,000
d. P6,550,000

Using Monkey Boy, what is the gross purchases under accrual basis of accounting?
a. P4,500,000
b. P4,700,000
c. P4,600,000
d. P4,800,000

On January 1, 2020, Denver Company entered into a 4-year licensing agreement with Akins
company allowing Akins to use Denver’s cartoon characters on all the lunchboxes that
Akins manufactures. Akins is required to pay Denver royalties equal to 10% of annual
sales. Akins guaranteed Denver a P1,200,000 minimum royalty over the life of the
agreement and paid Denver the minimum amount on January 1, 2020. For the year ended
December 31, 2020, Akins sales totaled P5,000,000. What amount of royalty income should
Denver report in 2020?
a. P300,000
b. P500,000
c. P800,000
d. P1,200,000

Under accrual basis, what amount should Android report for cost of sales in 2020?
a. P5,450,000
b. P4,950,000
c. P4,850,000
d. P4,350,000

Under the accrual basis, rental income of Gohan Inc, for the current year is P600,000.
Additional information regarding rental income is as follows: Unearned rental income, beg,
50,000; Unearned rental income, end, 75,000; Accrued rental income, beg, 30,000; Accrued
rental income, end, 40,000. What is the cash basis rental income for the current year?
a. P585,000
b. P615,000
c. P625,000
d. P655,000

On February 1 of the current year, Vegeta Inc. began a service proprietorship with an initial
cash investment of P200,000. The proprietorship provided P500,000 of service in February
and received full payment in March. The proprietorship incurred expenses of P300,000 in
February which were paid in April. During March, Vegeta drew P100,000 against the
capital account. In the proprietorship’s financial statements for the two months ended
March 31 prepared under the cash basis of accounting, what amount should be reported as
capital? 
a. P100,000
b. P300,000
c. P600,000
d. P700,000

What is the total income tax expense to be presented under the cash basis accounting?
a. P1,000,000
b. P14,000,000
c. P13,000,000
d. P12,000,000

Using Angeles Company, what amount to be recognized as derivative asset/liability on

December 31, 2020
a. 2,400,000 liability
b. 100,000 liability
c. 100,000 asset
d. zero

Using Angeles Company, what is the amount that the company will pay or receive as a
result of the foreign currency forward on April 1, 2021
a. 150,000 receipt
b. 150,000 payment
c. 100,000 payment
d. 100,000 receipt

Using Angeles Company, what is the Carrying amount of equipment as of December 31,
2021?
a. 2,550,000
b. 2,040,000
c. 2,167,500
d. 2,295,000

Using Angeles Company, what is the gain or (loss) remaining in equity as of December 31,
2021?
a. 150,000
b. 100,000
c. 127,500
d. zero
Using Vigan Company, what is the net amount that Vigan will pay or receive as a result of
the interest rate swap
a. 308,418 payable
b. 305,547 payment
c. 330,000 payable
d. 330,000 receipt

Using Vigan Company, what is the amount to be recognized on Vigan’s 12/31/2020

Statement of Financial Position in relation to the interest rate swap 
a. 308,418 payment
b. 305,547 payment
c. 330,000 payment
d. 330,000 receipt

Using Vigan Company, what is the net interest expense in 2021 

a. 2,640,000
b. 2,310,000
c. 2,331,582
d. 2,618,418

Using Vigan Company, If the interest rate on January 1, 2021 is 9%, the amount to be
recognized in Vigan’s 12/31/2020 Statement of Financial Position in related to the interest
rate swap?
a. 302,742 receivable
b. 305,547 receivable
c. 330,000 payable
d. 330,000 receivable

For Grimmett Company, the following information is available: Capitalized leases

P200,000; Trademarks 55,000; and Long-term receivables 75,000. In Grimmett’s statement
of financial position, intangible assets should be reported at
a. P 55,000
b. P 75,000
c. P255,000
d. P275,000

Houston Company has the following items: share capital–ordinary, P820,000; treasury
shares, P85,000; deferred taxes P100,000 and retained earnings, P313,000. What amount
should Houston Company report as total equity?
a. P 948,000
b. P1,048,000
c. P1,148,000
d. P1,218,000

Stine Corp.'s trial balance reflected the following account balances at December 31, 2020:
Accounts receivable (net), P24,000; Trading securities, 6,000; Accumulated depreciation—
equipment, 15,000; Cash, 21,000; Inventory, 30,000; Equipment, 25,000; Patent, 4,000;
Prepaid expenses, 2,000; Land held for future business site, 18,000. In Stine's December 31,
2020 statement of financial position, the current assets total is
a. P101,000
b. P92,000
c. P87,000
d. P83,000

a. P2,000,000
b. P1,000,000
c. P2,500,000
d. P1,500,000

a. P1,100,000
b. P800,000
c. P700,000
d. P900,000
 a. P2,000,000
b. . P8,000,000
c. . P15,000,000
d. P3,000,000

a. P3,000,000
b. P1,800,000
c. P4,300,000
d. P6,800,000

a. P340,000
b. P432,000
c. P580,000
d. P616,000
Using "Mendez Company" problem. What is the total current assets?
a. 3,400,000
b. 4,400,000
c. 5,400,000
d. 4,900,000

What is the total current liabilities? 

a. 2,700,000
b. 3,300,000
c. 4,050,000
d. 3,900,000

What is the value of Retained Earnings?

a. 8,500,000
b. 6,400,000
c. 7,000,000
d. 3,500,000

At January 1, a sole proprietorship’s assets totaled P210,000 and its liabilities amounted to
P120,000. During the year, owner investments amounted to P72,000 and owner withdrawals
totaled P75,000. At year-end, assets totaled P270,000, and liabilities amounted to P171,000.
The amount of net income for the year was
a. zero
b. 6,000
c. 9,000
d. 12,000

What amount of Profit should be reported in HP's 2020 Statement of Comprehensive

Income?
a. 9,000,000
b. 6,500,000
c. 7,000,000
d. 8,500,000

What amount of Comprehensive Income should be reported in HP's 2020 Statement of

Comprehensive Income?
a. 12,000,000
b. 5,000,000
c. 11,000,000
d. 4,000,000

What amount of adjustment to Retained Earnings should be reported in HP's 2020

Statement of Changes in Shareholder's Equity?
a. 1,000,000
b. 2,000,000
c. 3,000,000
d. 4,000,000
Gold company provided the following information at year-end; Share Premium,
1,000,000; Accounts Payable, 1,100,000; Preference Share Capital (at par), 2,000,000;
Ordinary Share Capital (at par), 3,000,000; Beginning Retained Earnings, 1,000,000;
Sales, 10,000,000; Total Expenses, 7,800,000; Treasury Shares, 500,000; Dividends,
700,000; and Unaccounted overstatement in Depreciation Expense from previous year,
100,000. What is the Shareholders' Equity at year-end?
a. 8,000,000
b. 8,500,000
c. 8,100,000
d. 8,700,000
What is the carrying amount of van to be presented on the December 31, 2020 Statement
of Financial Position of Core Inc.?
a. 700,000
b. 1,100,000
c. 600,000
d. 1,300,000

What is the gain on reversal of impairment loss to be recognized on for the year ended
December 31, 2021 of Core Inc.?
a. 400,000
b. 500,000
c. 600,000
d. 300,000

On January 1, 2018, Wayne Inc. acquired a machine for P800,000 with useful life of 4
years and residual value of P100,000. It is the company’s policy to use SYD method for
depreciation of its property, plant and equipment. On April 1, 2020, due to new
information, Wayne Inc. changed its depreciation method from SYD to Double Declining
Method. Aside from that, the remaining useful life is 4 years. The residual value is zero.
What is the depreciation expense of the machine for the year ended December 31, 2020?
a. P87,500
b. P138,125
c. P103,125
d. P137,500

What is the carrying value of machine on December 31, 2021?

a. P112,938
b. 78,562
c. P93,750
d. P85,938

During the year ended December 31, 2020, the following events occurred at Pearl
Company: (1) It was decided to write off P800,000 from Inventory which was over two
years old as it was obsolete. (2) Sales of P1,000,000 had been omitted from the financial
statements for the year ended December 31, 2019. What amount should be reported as a
prior period error in the financial statements for 2020? 
a. 1,800,000
b. 1,000,000
c. 800,000
d. 200,000
 a. P45,000,000
b. P27,000,000
c. P36,000,000
d. P18,000,000

Under the revenue test, what is the minimum revenue of a reportable segment?
a. P1,500,000
b. P1,000,000
c. 600,000
d. P3,500,000

Conn Co. reported a retained earnings balance of 400,000 at December 31, 2019. In
August 2020, Conn determined that insurance premiums of 60,000 for the three-year
period beginning January 1, 2019, had been paid and fully expensed in 2019. Conn has a
30% income tax rate. What amount should Conn report as adjusted beginning retained
earnings in its 2020 statement of retained earnings?
a. 420,000
b. 428,000
c. 440,000
d. 442,000
Tack, Inc. reported a retained earnings balance of 150,000 at December 31, 2019. In June
2020, Tack discovered that merchandise costing 40,000 had not been included in inventory
in its 2019 financial statements. Tack has a 30% tax rate. What amount should Tack report
as adjusted beginning retained earnings in its statement of retained earnings at December
31, 2020?

a. 190,000
b. 178,000
c. 150,000
d. 122,000