INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC

Alimannao Hills, Peñablanca, Cagayan 3502

C OLLEGE OF B USINESS E
DUCATION
ACCOUNTANCY DEPARTMENT
QUALIFYING EXAM

Name: _________________________________________Year & Section: ______________________

Proctor: ________________________________________Score: _____________________________

1. Which statement is correct in describing the rank order of payments as specified by the
Uniform Partnership Act?
a. Payments to partners with loans to the partnership are ranked equally with payments to
other creditors.
b. Payments to partners with loans to the partnership are ranked ahead of payments to
partners without loans to the partnership.
c. Payments to other creditors are ranked ahead of payments to partners with loans to the
partnership.
d. After payments are made to other creditors and partners with loans to the partnership,
payment can be made to partners with capital interests.

2. Which of the following procedures is acceptable when accounting for a deficit balance in a
partner’s capital account during partnership liquidation?
a. A partner with a negative capital balance must contribute personal assets to the
partnership that are sufficient to bring the capital account to zero.
b. If a partner with a negative capital balance is personally insolvent, the negative capital
balance may be absorbed by those partners having a positive capital balance according to the
residual profit and loss sharing ratios that apply to all the partners.
c. If a partner with a negative capital balance is personally insolvent, the negative capital
balance may be absorbed by those partners having a positive capital balance according to the
residual profit and loss sharing ratios that apply to those partners having positive balances.
d. All the above procedures are acceptable.

3. A partnership dissolution differs from a liquidation in that

a. payments are made to creditors before partners receive value.
b. periodic payments to partners are made when cash becomes available.
c. a partner withdraws from the business and the enterprise continues to function.
d. full payment is made to all outside creditors before remaining cash is distributed to
partners in a final lump sum payment.

4. A partnership in liquidation has converted all assets into cash and paid all liabilities.
According to the Uniform Partnership Act, the order of payment
a. will have amounts due to partners with respect to their capital accounts take precedence
over amounts owed by partners other than for capital and profits.
b. will be according to the partners’ residual profit and loss sharing ratios.
c. will have amounts owed by partners other than for capital and profits take precedence
over amounts due to partners with respect to their capital accounts.
d. Will be by any manner that is both reasonable and rational for the partnership.

5. Which of the following results in dissolution of a partnership?

a. contribution of additional assets to the partnership by an existing partner
b. receipt of a draw by an existing partner
c. winding up of the partnership and the distribution of remaining assets to the partners
d. withdrawal of a partner from a partnership

6. The admission of a new partner under the bonus method will result in a bonus to
a. the old partners only.
b. the new partner only.
c. either the new partner or the old partners, but not both.
d. none of the above.

7. Under the bonus method, when a new partner is admitted to the partnership, the total
capital of the new partnership is equal to:
a. the book value of the previous partnership plus the fair market value of the consideration
paid to the existing partnership by the incoming partner

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b. the book value of the previous partnership plus any necessary asset write ups from book
value to market value plus the fair market value of the consideration paid to the existing
partnership by the incoming partner
c. the book value of the previous partnership minus any asset write downs from book to
market value plus the fair market value of the consideration paid to the existing partnership by
the incoming partner
d. the fair market value of the new partnership as implied by the value of the incoming
partner's consideration in exchange for an ownership percentage in the new partnership

8. Which of the following characterizes the bonus method, compared to the goodwill method,
when unrecorded intangibles are traceable to the previous partners?
a. The intangibles are actually recorded.
b. The legal significance of a change in ownership structure of the partnership is emphasized.
c. This method generally produces more equitable results if the former partners do not share
profits and losses in the same relationship to each other as they did before a new partner was
admitted.
d. The market value concept rather than the historical cost concept is emphasized.

9. The fair market value of a partnership can be implied by

a. adding the incoming partner's market value of consideration to the book value of the
existing partnership.
b. the tax basis of the old partner's assets added to the incoming partner's consideration.
c. The incoming partner's market value of consideration divided by the incoming partner's
percentage share in profit and loss.
d. The incoming partner's market value of consideration divided by the incoming partner's
percentage ownership share in the new partnership.

10. The following is the priority sequence in which liquidation proceeds will be distributed for a
partnership:
a. partnership drawings, partnership liabilities, partnership loans, partnership capital
balances.
b. partnership liabilities, partnership loans, partnership capital balances.
c. partnership liabilities, partnership loans, partnership drawings, partnership capital
balances.
d. partnership liabilities, partnership capital balances, partnership loans.

11. Which of the following statements is correct regarding a partner's debit capital balances?
a. The partner should make contributions to reduce the debit balance to whatever extent
possible.
b. If contributions are not possible, the other partners with credit capital balances will be
allocated a portion of the debit balance based on their proportionate profit-and-loss-sharing
percentages.
c. Partners who absorb another's debit capital balance have a legal claim against the
deficient partner.
d. All of these statements are correct.

12. The doctrine of marshaling of assets

a. is applicable only if the partnership is insolvent.
b. allows partners to first contribute personal assets to unsatisfied partnership creditors.
c. is applicable if either the partnership is insolvent or individual partners are insolvent.
d. provides that when the Uniform Partnership Act is adopted, amounts owed to personal
creditors and to the partnership for debit capital balances are shared proportionately from the
personal assets of the partners.

13. If a partnership has only non-cash assets, all liabilities have been properly disbursed, and
no additional liquidation expenses are expected, the maximum potential loss to the partnership
in the liquidation process is:
a. the fair market value of the non-cash assets
b. the book value of the non-cash assets
c. the estimated proceeds from the sale of the assets less the book value of the non-cash
assets
d. none of the above

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14. In a simple partnership liquidation, the last remaining cash distribution should be made
according to the ratio of
a. the individual partner’s profit and loss agreement.
b. the individual partner's capital accounts, increased by partner loans to the partnership.
c. the individual partner’s capital accounts, increased by partnership loans to the partners
and decreased by partner loans to the partnership.
d. the individual partner’s capital accounts, decreased by partnership loans to the partners
and increased by partner loans to the partnership.

15. If conditions produce a debit balance in a partner’s capital account when liquidation losses
are allocated
a. the partner receives further allocations of liquidation losses, but not gains.
b. the partner receives no further allocation of liquidation losses and gains.
c. the partner is no longer obligated to partnership creditors.
d. the partner has an obligation of personal net assets to the other partners.

Use the following information for questions 16, 17, & 18.

On June 30, 2006, the Warle, Xin, and Yates partnership had the following fiscal year-end balance
sheet:
Cash P 4,000 Accounts payable P 7,000
Accounts receivable 6,000 Loan from Xin 5,000
Inventory 14,000 Warle, capital(20%) 14,000
Plant assets-net 12,000 Xin, capital(30%) 10,000
Loan to Warle 6,000 Yates, capital(50%) 6,000
Total assets P 42,000 Total liab./equity P 42,000

The percentages shown are the residual profit and loss sharing ratios. The partners dissolved the
partnership on July 1, 2006,. and began the liquidation process. During July the following events
occurred:
* Receivables of P3,000 were collected.
* The inventory was sold for P4,000.
* All available cash was distributed on
July 31, except for P2,000 that was set aside for contingent expenses.

16. The book value of the partnership equity (i.e., total equity of the partners) on June 30,
2006 is
a. P60,000. c. P30,000.
b. P29,000. d. P42,000.

17. The cash available for distribution to the partners on July 31, 2006 is
a. P 2,000. c. P 7,000.
b. P 4,000. d. P11,000.

18. How much cash would Xin receive from the cash that is available for distribution on July
31?
a. P 0. c. P1,000.
b. P 600. d. P2,000.

19. Hara, Ives, and Jack are in the process of liquidating their partnership. Since it may take
several months to convert the other assets into cash, the partners agree to distribute all
available cash immediately, except for P10,000 that is set aside for contingent expenses. The
balance sheet and residual profit and loss sharing percentages are as follows:
Cash P 400,000 Accounts payable P 200,000
Other assets 200,000 Hara, capital (40%) 135,000
Ives, capital (30%) 216,000
Jack, capital (30%) 49,000

Total assets P 600,000 Total liab./equity P 600,000

How much cash should Ives receive in the first distribution?
a. P146,000. c. P153,000.
b. P147,000. d. P156,00

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Use the following information for questions 16, 17, & 18.
Callie is admitted to the Adams & Beal Partnership under the bonus method. Callie contributes
cash of P20,000 and non-cash assets with a market value of P30,000 and book value of P15,000
in exchange for a 20% ownership interest in the new partnership. Prior to the admission of Callie,
the capital of the existing partnership was P130,000 and an appraisal showed the partnership net
assets were fairly stated.

20. What will be Callie's initial capital balance?

a. P36,000 c. P35,000
b. P50,000 d. P30,000

21. Adams & Beal shared profits and losses at a ratio of 80/20, respectively.
Which of the following bonus amounts would be recorded?
a. P14,000 to Callie capital c. P2,800 decrease to Beal capital
b. P2,800 increase to Beal capital d. P7,000 increase to Adams capital

22. Assume the existing capital of a partnership is P100,000. Two partners currently own the
partnership and split profits 40/60. A new partner is to be admitted and will contribute net assets
with a fair value of P50,000. An appraisal of existing partnership assets indicates accounts
receivable overstated by P10,000, inventory overstated by P12,000 and land understated by
P25,000. What is the total capital of the new partnership if the bonus method is being used?
a. P153,000 c. P175,000
b. P128,000 d. P150,000

23. Assume that the capital of an existing partnership is P90,000 and all existing assets reflect
fair market values. If an incoming partner acquires a 40% interest in the partnership for P55,000,
the goodwill traceable to the incoming partner is
a. P15,000 c. P3,000
b. P5,000 d. P2,000

24. Assume that the capital of an existing partnership is P130,000 and that existing assets are
overvalued by P10,000. If an incoming partner acquires a 25% interest in the partnership for
P37,000, goodwill traceable to the incoming partner is ____.
a. P1,000 c. P3,000
b. P9,667 d. P5,000

25. Partners Able, Baker, and Chapman have the following personal assets, personal liabilities,
and partnership capital balances:

Able Baker Chapman

Personal assets P30,000 P 80,000 P60,000
Personal liabilities 25,000 50,000 72,000
Capital balances 50,000 (32,000) 70,000

Assume profits and losses are allocated equally.

After applying the doctrine of marshaling of assets, the capital balances for Able, Baker, and
Chapman, respectively, would be
a. P50,000, P(2,000), and P58,000. c. P49,000, 0, and P57,000.
b. P48,000, 0, and P58,000. d. P34,000, 0, and P54,000.

26. Partners Dalton, Edwards, and Finley have capital balances of P40,000, 90,000 and
P30,000, respectively, immediately prior to liquidation. Total remaining assets have a book value
of P160,000, the liabilities having been paid. Among these remaining assets is a machine with a
fair value of P35,000. The partners split profits and losses equally. Edwards covets the machine
and is willing to accept it for P35,000 in lieu of cash. The other partners have no designs on
specific assets, only cash in liquidation. How much cash, in addition to the machine, would be
first distributed to Edwards, before any of the other partners received anything?
a. P15,000 c. P166,667
b. P50,000 d. P300,000

Use the following information for questions 27-28.

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Assume that a partnership had assets with a book value of P240,000 and a market value of
P195,000, outside liabilities of P70,000, loans payable to partner Able of P20,000, and capital
balances for partners Able, Baker, and Chapman of P70,000, P30,000, and P50,000.

27. How much would Able receive upon liquidation of the partnership assuming profits and
losses are allocated equally?
a. P70, 000 c. P75,000
b. P90,000 d. P55,000

28. Refer to Scenario 2. How would the first P100,000 of available assets be distributed
assuming profits and losses are allocated equally?
a. P70,000 to outside liabilities, P20,000 to Able, and the balance equally among the partners
b. P70,000 to outside liabilities and P30,000 to Able
c. P70,000 to outside liabilities, P25,000 to Able, and P5,000 to Chapman
d. P40,000 to Able, P20,000 to Chapman, and the balance equally among the partners

29. Refer to Scenario 2. If all outside creditors and loans to partners had been paid, how would
the balance of the assets be distributed assuming that Chapman had already received assets
with a value of P30,000 assuming profits and losses are allocated equally?
a. Each of the partners would receive P25,000.
b. Each of the partners would receive P40,000.
c. Able: P70,000, Baker: P30,000, Chapman: P20,000
d. Able: P55,000, Baker: P15,000, Chapman: P5,000

QR and ST decided to combine their businesses and form a partnership. Below are their balance
sheets before any adjustments:

QR ST
Cash P48,400 P98,360
Accounts receivable 1,031,960 2,498,716
Inventories 528,160 1,144,448
Property, Plant & Equipment (net) 2,613,380 1,852,224
Other assets 8,800 15,840
_________ __________
Total Asstes P4,230,700 P5,609,588

Accounts Payable P787,3361 P1,072,060

Notes Payable 1,000,000 -
Mortgage Payable - 1,440,000
QR, Capital 2,443,364 -
ST, Capital - 3,097,528
____________ _________
Total Liabilities & Equity P4,230,700 P5,609,588

The partners agreed that the property, plant and equipment of QR is under depreciated by
P80,000 and thta of ST is over depreciated by P200,000. Accounts receivable of P108,000 in QR’s
book and P140,000 in ST’s book are uncollectible. The partnership decided to assume the
mortgage liability of St. The partnership agreement provides for a profit and loss ratio and capital
interest of 60% to QR and 40% to ST. St is willing to invest or withdraw cash from the partnership
top comply with the agreement.
30. Compute for the capital balances of QR and ST right after the formation.

a. P6,896,292 ; P4,597,528 c. P2,255,364 ; P1,503,576

b. P6,896,292 ; P3,157,528 d. P2,255,364 ; P3,157,528

31. Bel, Col, and Del, partners of the BCD partnership, shared profits and losses in the
ratio of 5:3:2, respectively. On december 31, 2008, the end of an unprofitable year, they decided
to liquidate the partnership. The partners capital account balances on the date were as follows:

Bel, capital P22,000

Col, capital 24,900
Del, capital 15,000

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 The liabilities in the balance sheet amounted to P30,000 including a loan of P10,000 payable to
Bel. The cash balance was P6,000. The partners planned to realize the non-cash cash assets in
installment and to distribute cash as it becomes available. All three partners are solvent.
If Bel received a total of P20,000 as a result of liquidation, what was the total amount realized by
the partnership on the non-cash assets?
a. P85,900 c. P67,900
b. P91,900 d. P61,900

For question number 32-33, use the following information:

Donald, Anne, and Todd have the following capital balances; P40,000, P50,000 and P30,000
respectively. The partners share profits and losses 20%, 40%, and 40% respectively.
32. Anne retires and is paid P80,000 based on the terms of the original partnership
agreement. If the bonus method is used, what is the capital of the remaining partners?
A) Donald, P40,000; Todd, P30,000 C) Donald, P50,000; Todd, P50,000
B) Donald, P30,000; Todd, P10,000 D) Donald, P80,000; Todd, P70,000

33. What is the total partnership capital after Anne retires receiving P80,000 and using the
bonus method?
A) P20,000. C) P60,000.
B) P40,000. D) P80,000

34. The partnership contract for Mulengleng and Muttaleng,LLP provides that
Mulengleng is to receive a bonus of 20% of net income (after the bonus) and that the remaining
net income is to be divided equally. If the partnership income before the bonus for the year is
P57,600, Mulengleng’s share of this pre-bonus income is:
A) P28,800. C) P34,560.
B) P33,600. D) P43,200.

35. Kay and Loy, partners who share profits and losses equally decided to liquidate their
partnership business in installment. The balance sheet showed Cash, P35,000; Liabilities,
P20,000; Kay capital, P71,000; and Loy capital, P54,000. Anticipated liquidation expenses
amounts to P10,000.
How much cash can be distributed safely to each partner at this point?
Kay Loy Kay Loy
a. P5,000 P -0- c. P3,000 P-0-
b. P5,000 P 500 d. P5,000 P1,000

36. Which of the following correctly relate(s) to the Monetary/ Stable monetary/ Monetary Unit
concept?
I. assets, liabilities, equity, revenues and expenses should be stated in terms of a unit of
measure which is the peso in the Philippines.
II. the purchasing power of the peso is stable or constant and that its instability is
insignificant and therefore ignored.
a. I c. I and II
b. II d. None

37. To be relevant, information should have which of the following?

a. Verifiability. c. Understandability.
b. Confirmatory value. d. Costs and benefits.

38. The PFRSs do not apply to

a. sole proprietorships. d. non-profit organizations.
b. partnerships. e. The PFRSs apply to all of these
c. cooperatives. entities.

39. "Aanhin mo pa ang damo kung patay na ang kabayo.”

a. Materiality c. Timeliness
b. Relevance d. Biological asset - Horse

40. This refers to financial statements that are intended to meet the needs of users who are
not in a position to require an entity to prepare reports tailored to their particular information
needs.
a. All-purpose financial statements c. Managerial reports
b. General purpose financial statements d. Unisex financial statements

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41. A complete set of financial statements does not include a
a. statement of financial position c. statement of retained earnings
b. statement of comprehensive income d. notes

42. Which of the following is an acceptable method of reporting other comprehensive income
and its components?
a. In a statement of profit or loss and other comprehensive income.
b. In a statement of changes in equity
c. In the notes only.
d. All of these

43. Which of the following may be included in the cost of inventories?

a. Storage costs of part-finished goods
b. Abnormal amount of wasted costs of materials, labor and factory overhead
c. Recoverable purchase taxes
d. Administrative costs

44. Which of the following cost formulas is not allowed under PAS 2?
a. FIFO c. Specific identification
b. Weighted average d. LIFO
e.

45. Entity A, a trading entity, buys and sells Product Z. Movements in the inventory of Product
Z during the period are as follows:

Unit
Date Transaction Units Total cost
cost
Feb. 1 Beginning inventory 100 ₱15 ₱1,500
7 Purchase 300 18 5,400
12 Sale 320
21 Purchase 200 21 4,200

How much is the cost of sales under the FIFO cost formula?
a. 5,460 c. 5,640
b. 5,840 d. 4,860
e.

46. Interest expense that is paid in cash is presented in the statement of cash flows under
a. operating activities. c. financing activities
b. investing activities d. a or c

47. When it is difficult to distinguish a change in accounting policy from a change in

accounting estimate, the change is treated as
a. a change in an accounting estimate. c. a correction of prior period error.
b. a change in an accounting policy. d. not accounted for.

48. ABC Co. completes the draft of its December 31, 20x1 year-end financial statements on
January 31, 20x2. On February 5, 20x2, the board of directors reviews the financial statements
and authorizes them for issue. The entity announces its profit and selected other financial
information on February 23, 20x2. The financial statements are made available to shareholders
and others on March 1, 20x2. The shareholders approve the financial statements at their annual
meeting on March 18, 20x2 and the approved financial statements are then filed with a
regulatory body on April 1, 20x2. Events after the reporting period are those occurring
a. from December 31, 20x1 to February 5, 20x2.
b. from January 1, 20x2 to February 5, 20x2.
c. from January 1, 20x2 to February 23, 20x2.
d. from January 1, 20x2 to March 18, 20x2.

49. These are differences that do not have future tax consequences.
a. Permanent differences c. Temporary differences
b. Taxable differences d. Deductible differences

50. This type of difference will give rise to deferred tax asset.
a. Taxable temporary difference c. Deductible temporary difference
b. Permanent difference d. No difference
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51. In accounting parlance, depreciation means
a. the amount derived by dividing the cost of an asset over its useful life.
b. the amount derived by multiplying the cost of an asset by its useful life.
c. the systematic allocation of the depreciable amount of an asset over its useful life.
d. the decline the in the value of an asset during the period.

52. It is a type of retirement plan where the employer assures a definite amount of benefit to
be received by the employee. The risk that funds needed to pay the agreed benefits may be
insufficient is retained by the employer.
a. Defined contribution plan c. Leche plan
b. Defined benefit plan d. Plan vs. zombies

53. The government extends a repayable loan to Entity A. The loan pays interest at market
rate. Entity A should account for the government loan using which of the following standards?
a. PAS 20 c. PFRS 9
b. PAS 41 d. PFRS 16

Use the following information for the next two questions:

On December 1, 20x1, Entity A sells goods to Entity B, on credit, for a total sale price of $1,000.
Entity B settles the account on January 6, 20x2. Entity A’s functional currency is the Philippine
peso (₱).The relevant exchange rates are as follows:
Dec. 1, 20x1 Dec. 31, 20x1 Jan. 6, 20x2
₱50:$1 ₱52:$1 ₱47:$1

54. How much is the foreign exchange gain (loss) to be recognized by Entity A on December
31, 20x1?
a. 2,000 c. (2,000)
b. 1,000 d. (1,000)

55. How much is the foreign exchange gain (loss) to be recognized by Entity A on January 6,
20x2?
a. 3,000 c. (3,000)
b. 5,000 d. (5,000)

56. According to PAS 23, borrowing costs are capitalized when

a. they relate directly to the acquisition, construction or production of a qualifying asset.
b. the entity chooses to capitalize them.
c. they are material and are expected to be incurred over more than one reporting period.
d. all of these

57. Which of the following are not related parties?

a. A parent and its subsidiary
b. Two or more subsidiaries with the same parent
c. A company and its Chief Executive Officer
d. Two co-venturers of a common joint venture business

58. According to PAS 27, which of the following is required to present separate financial
statements?
a. A publicly-listed entity c. An entity with an investment in
b. A parent associate
d. None of these

59. On January 1, 20x1, Entity A acquires 25% interest in Entity B for ₱800,000. Entity B
reports profit of ₱1,000,000 and declares dividends of ₱100,000 in 20x1. How much is the
carrying amount of the investment in associate on December 31, 20x1?
a. 800,000 c. 1,000,000
b. 1,250,000 d. 1,025,000

60. Entity A operates in a hyperinflationary economy. Entity A has the following assets before
restatement on December 31, 20x1:
Accounts receivable, net ₱300,000
Building, net 900,000

The building was acquired on May 21, 20x0. The general price indices are as follows:
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May 21, 20x0 100
Average – 20x2 180
December 31, 20x1 150

What are the restated amounts of the assets?

Accounts receivable Building
a. 250,000 1,350,000
b. 286,667 1,478,932
c. 300,000 1,350,000
d. 300,000 900,000

61. Which of the following is classified as an equity instrument rather than a financial liability?
a. Preference shares that are mandatorily redeemable
b. A contract that is settled by the delivery of a variable number of the entity’s own equity
instruments in exchange for a fixed amount of cash or another financial asset.
c. A contract that is settled by the delivery of a fixed number of the entity’s own equity
instruments in exchange for a variable amount of cash or another financial asset.
d. Shares issued but were subsequently reacquired.

62. Entity A issues convertible bonds with face amount of ₱2,000,000 for ₱2,600,000. Each
₱1,000 bond is convertible into 10 shares with par value of ₱60 per share. On issuance date, the
bonds are selling at 102 without the conversion option. What is value allocated to the equity
component on initial recognition?
a. 2,040,000 c. 560,000
b. 540,000 d. 460,000

63. Entity A had the following instruments outstanding all throughout 20x1:

12% convertible bonds payable issued at face amount, each

₱1,000 bond is convertible into 30 ordinary shares ₱2,000,000
Ordinary shares, ₱10 par, 100,000 shares issued and
outstanding 1,000,000

Profit for the year is ₱800,000. Entity A’s income tax rate is 30%.

What is the diluted earnings per share in 20x1?

a. 6.28 c. 6.15
b. 6.05 d. 5.98

64. Which of the following is correct regarding the provisions of PAS 34?
a. All entities should publish quarterly interim reports.
b. All publicly-listed entities should publish quarterly interim reports.
c. All publicly-listed entities should publish semi-annual interim reports.
d. PAS 34 does not require any entity to publish interim reports, and how often.

65. If a cash-generating unit (CGU) is impaired, the impairment loss is allocated first to
a. the goodwill in that CGU.
b. the noncurrent assets in that CGU.
c. the current assets in that CGU.
d. a and b

66. The amount at which an asset is recorded in the books of accounts minus any
accumulated depreciation and accumulated impairment losses is referred to as

a. fair value. d. amortized cost.

b. cost.
c. carrying amount.
67. Which of the following analysis on asset impairment is most likely to have been made by a
CPA? (where: RA = recoverable amount; FVLCD = fair value less costs of disposal; VIU = value in
use; CA = carrying amount; IL = impairment loss; > = greater than; < = less than)
a. if “FVLCD > CA,” then, “IL = 0”
b. if “FVLCD < VIU,” then, IL = > 0”
c. if “FVLCD > VIU,” then, “RA = FVLCD,” now, if “CA > RA,” then “IL = RA – CA”
d. if “FVLCD > VIU,” then, “RA = VIU,” now, if “CA < RA,” then “IL = RA – CA”

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 68. Which of the following statements is correct?
a. A provision is recognized only when it represents a present obligation.
b. An event or transaction that meets both the “probable outflow of economic benefits” and
“reliable measurement” criteria is always recognized.
c. A contingent asset that is possible is ignored.
d. A contingent liability that is possible is ignored.

69. Intangible assets are measured as follows:

Initial measurement Subsequent measurement
a. cost fair value
b. cost cost model or revaluation model
c. cost cost model or fair value model
d. fair value cost model or revaluation model

70. Which of the following properties falls under the definition of investment property?
I. Land held for long-term capital appreciation
II. Property occupied by an employee paying rent at market rate
III. Property being constructed on behalf of third parties
IV. A building owned by an entity and
leased out under an operating lease
a. I and II c. II and IV
b. I and IV d. II, III and IV

Prepared by:

MARK JOHN D. GONZALES, CPA

Program Coordinator

Noted by:

CB RONIE E. SUGAROL, MPBM

Dean, Business Education/School Overseer

Reviewed by:

DAN PAOLO E. RAMOS, MSHM

QA Moderator for Academics and Administration

Approved by:

PRESENITA C. AGUON, Ph.D.

Vice-President for Academic Affair

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