Financial instruments include all of the following except: Prepaid Expenses

As a rule, transaction costs that are directly attributable to the acquisition of a financial asset shall be: Capitalized a
If the financial asset is held for trading or if the financial asset is measured at fair value through profit and loss, tran
Which of the following statements is true concerning recognition of unrealized gains and losses on financial assets:
On derecognition from the sale of a financial asset, the difference between the consideration received and the carry
When an investor designates its equity instrument as an investment in associate, cash dividends received by the in

Under the equity method of accounting for investments in associate, an investor recognizes its share of earning in t
The interest rate written on the face of the bond is known as: Nominal rate, coupon rate, or stated rate
Bonds usually sell at a discount when: Investors are willing to invest in the bonds only at rates (effective inter
If a 5-year bond matures on October 1, 2025 and interest is payable semiannually, the interest dates are:
Which of the following should be classified as financial instrument: Trade accounts receivable
The cost of purchase of inventory does not include: Trade discount, returns, and other similar items
Which of the following costs of conversions cannot be included in the product cost: Salaries of sales staff
A property or real estate developer must classify the house and lot units it holds for sale in the ordinary course busi
A company purchases merchandise from the manufacturer under a consignment contract. When should revenue fr
Goods shipped FOB shipping point on the last day of the year should ordinarily be included in: The buyer’s invent
Goods shipped FOB destination that are in transit at the end of the year should be included in the inventory of: Sell
Goods on consignment shall be included in the inventory of: The consignor but not the consignee
A discount given to a customer for purchasing a large volume of merchandise is typically referred to as: Trade Disc
Inventories shall be measured at: Lower of cost and net realizable value
This cost formula assumes that the items of the inventory that were purchased or products first are sold first and co
Which of the following describes the flow of products costs through the inventory accounts of a manufacturer: Raw
The following are true of periodic system of inventories except: Requires maintenance of detailed inventory reco
urchased or produced: FIFO

ction by transaction…
25. Hawkeye Company

On July 1, 2020 Hawkeye company purchased P1,000,000 8% bonds for P866,000. Acquisition cost amounted to P

The bonds mature on January 1, 2026, and pay interest anually on January 1. Hawkeye uses the effective interest

On December 31, 2020, what carrying amount should be reported as investment bonds?

900,800
896,000
911,000
916,000

26. Groot Company

Groot Company acquried a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is clasi

On December 31, 2020. The fair value of the instrument was P5,500,000. What amount of unrealized ain should be

600,000
0
800,000 m not sure tho
200,000

27 Hero Comapny

During 2019, Hero Comany purchased trading securities with the following cost and market value on December 31,
security cost market value
a. 1,000 shares 200,000 300,00
b. 10,000 shares 1,700,000 1,600,000
c. 20,000 shares 3,100,000 2,900,000
5,000,000 4,800,000

hero company sold 10,000 shares of security B on january 15, 2020 for 120 pesos per share incurring P50,000 in b
Trading securities are equity securities designated at fair vale through profit or loss
What amount should be reporte as loss on sale of trading investment in 2020?

450,000
400,000
 250,000
200,000

28. Hero Company

On Januray 1, 2020 HERO COMAPNY PURCHASED 30,000 SHARES OF THOR TRADINGS 120,000 OUTSTANDING ORDIN

ON DECEMBER15, 2020 thor trading paid P400,000 in dividends to its ordinary shareholders. thors net income for the y

in its 2020 income statement, what amount of income from the investment should hero company report?

300,000
360,000 1.2M x 0.25= 300k
100,000 i think it's 300k 30k/120k= 0.25
160,000

29
quisition cost amounted to P30,000. The bonds were purchased to yield 10% interest

e uses the effective interest method of amortization.

financial instrument is clasified as a financial asset at fair value through other comprehensice income. The direct aqusition cos

of unrealized ain should be recognized in the Profit or Loss statement?

rket value on December 31, 2019.

share incurring P50,000 in brokerage commission and taxes.

0,000 OUTSTANDING ORDINARY SHARES FOR P200 PER SHARE.

ers. thors net income for the year ended december 31,2020 was P1,200,000 earned evenly throughout the year

mpany report?
me. The direct aqusition costs inccured amounted to P700,000.