PFRS 4 says that insurance contracts should:

a. Comply with the PFRS Framework document.

b. Be covered by existing policies during the phase one.
c. Comply with all existing PFRS.
d. Be covered by PAS 32 and PAS 39 only.

On February 14, 2012, Therese Company established a sales agency in Tagbilaran.

Upon establishment of the sales
agency, the home office sent samples costing P8,000 and a working fund of P3,000 to
be maintained on the imprest
basis. During the six months period, the sales agency reported to the home office sales
orders. These were billed at
P70,000 of which of P40,000 was collected) the sales agency paid expenses of P5,800
but was reimbursed by the home
office.
On August 15, 2012, the sales agency samples were valued at P2,000. It was estimated
that the gross profit on goods
shipped to fill sales order averaged 40% of cost.
The cost of sales of the sales agency for the six months period is
a. P42,000 c. P48,000
b. P44,000 d. P50,000

PFRS 4 was introduced principally for what reason?

a. To completely overhaul insurance accounting.
b. To ensure that insurance companies could comply with International
Financial Reporting Standards by 2005.
c. As a response to recent scandals within the insurance industry.
d. Because of pressure from the financial services authorities in several
countries.