PAS 1 Presentation of Financial Statements

TRUE OR FALSE
1. The application of PFRSs, with additional disclosure when necessary, is presumed to result in
financial statements that achieve a fair presentation. __True__________
2. According to PAS 1, an entity shall make an explicit and unreserved statement of compliance
with the PFRSs in the notes only if the entity complies with all the requirements of PFRSs.
____False_________
3. PAS 1 encourages, but does not require, the presentation of the preceding year’s financial
statements as comparative information to the current year’s financial statements.
___False______
4. According to PAS 1, assets and liabilities or income and expenses are offset, unless separate
presentation is required or permitted by a PFRS. ____True__________
5. According to PAS 1, PFRSs apply to financial statements as well as to other information presented
in an annual report, a regulatory filing, or another document. ____True_________

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6. According to PAS 1, the line item “Cash and Cash Equivalents” should always be presented first in

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the statement of financial position. __False_____________

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7. PAS 1 prescribes an order or format of presenting items in the financial statements.

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__True________

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8. An entity may omit the notes when presenting general purpose financial statements.
__False_______
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9. If profit or loss is P100 while other comprehensive income is P20, total comprehensive income
must be P130. _____False_________
10. PAS 1 encourages, but does not require, the disclosure of an entity’s domicile and legal form, its
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country of incorporation and the address of its registered office and a description of the nature
of its operations and its principal activities. ____True___________
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PAS 2 Inventories

TRUE OR FALSE
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1. According to PAS 2, inventories are measured at net realizable value. __True___________

2. According to PAS 2, net realizable and fair value less costs to sell are the same.
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__False__________
3. Storage costs of part-finished goods may be included in the cost of inventory, but not storage
costs of finished goods. __True___________
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4. Trade discounts are added to the cost of inventories. ____False__________

5. Import duties, freight-in and non-refundable purchase taxes form part of the cost of inventories.
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____True___________
6. Raw materials inventory is not written down below cost if the finished goods to which they will
be incorporated are expected to be sold at or above cost. ____True_________
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7. Reversals of inventory write-downs may exceed the amount of the original write-down
previously recognized. ____False__________
8. The cost of factory management is included in the cost of inventory. __True___________
9. The maintenance costs of a machine used in the manufacturing process are not included in the
cost of inventories. _____False___________
10. If the cost of an inventory is P8 while its net realizable value is P6, the amount of write-down is
P2. ___True____________

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This study source was downloaded by 100000833219991 from CourseHero.com on 10-20-2021 04:28:48 GMT -05:00

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