No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

LEASES
INCOME TAXES
EMPLOYEE BENEFITS

1. The lessee may apply the operating lease model under what condition?
a. Short-term lease
b. Low value lease
c. Both short-term lease and low value lease
d. Under all circumstances

2. The cost of right of use asset comprises all, except

a. The present value of lease payments
b. Lease payment made to lessor on or before commencement date
c. Initial direct cost incurred by lessee
d. Cost of dismantling for which the lessee has no present obligation

3. Minimum lease payments may include the following, except:

a. Bargain purchase option
b. Guaranteed residual value
c. Periodic rental payments
d. Lease incentive

4. In computing depreciation of a right of use asset, the lessee should subtract

a. A guaranteed residual value and depreciate over the life of the asset
b. A guaranteed residual and depreciate over the term of the lease
c. An unguaranteed residual value and depreciate over the life of the asset
d. An unguaranteed residual value and depreciate over the term of the lease

5. The concept that is principally used to classify leases from the point of view of the
lessor is
a. Completeness
b. Neutrality
c. Prudence
d. Substance over form

6. The classification of a lease from the point of view of the lessor is normally carried
out
a. At the end of the lease term
b. At the inception of the lease
c. When the entity deems it necessary
d. After a “cooling off” period of one year

7. The basic accounting issue for a lessor is

a. Revenue recognition during the lease term
b. Expense recognition during the lease term
c. Computing depreciation over the lease term
d. Determination of the cost of the leased asset

8. Lessors are required to account for lease receipts from operation leases as
a. Revenue, at the end of the lease term
b. Income, on inception date of the lease
c. Income, on a straight-line basis over the lease term
d. Revenue, on a reducing balance basis over the lease term

1|P a g e RSORIANO/JM AGLINAO

 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

9. It is the profit for a period determined in accordance with the rules established by
taxation authorities upon which income taxes are payable
a. Accounting profit
b. Taxable profit
c. Net profit
d. Accounting profit before tax

10. It is the amount of income taxes payable in respect of taxable profit

a. Current tax expense
b. Tax expense
c. Deferred tax expense
d. Deferred tax benefit

11. These are differences between carrying amount of an asset or liability in the
statement of financial position and its tax base
a. Temporary differences
b. Timing differences
c. Permanent differences
d. Accounting differences

12. A pretax income always results when

a. Revenues exceed operating expenses
b. Revenues exceed the cost of goods sold
c. The gross margin exceeds operating expenses
d. The cost of goods sold exceeds operating expenses

13. The deferred tax attributable to a deductible temporary difference is known as

a. Current tax
b. Deferred tax asset
c. Deferred tax expense
d. Deferred tax liability

14. Current tax expense plus deferred tax expense is

a. A meaningless sum
b. Income tax expense
c. Tax deductible expense
d. Deferred tax asset

15. Which of the following methods is used in PFRS to account for defined benefit
pension plans?
a. Accumulated benefits method
b. Benefit-years-of-service method
c. Projected-unit-credit method
d. Vested years of service method

16. Remeasurement of the net defined benefit liability shall be composed of the
following, except
a. Actuarial gains and losses
b. Return on plan assets, excluding amounts included in the net interest
c. Change in the effect of the asset ceiling, net of interest
d. Settlement gain or loss

17. Which measure requires the use of future salaries in the computation of pension
obligation?
a. Accumulated benefit obligation
b. Defined benefit obligation
c. Restructured benefit obligation

2|P a g e RSORIANO/JM AGLINAO

 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

d. Vested benefit obligation

18. Which is not included in service cost?

a. Current service cost
b. Interest cost
c. Past service cost
d. Plan settlement gain or loss

19. The component of defined benefit cost includes all of the following, except
a. Plan contributions
b. Net interest
c. Remeasurements
d. Service cost

20. None but one of the following is not a component of benefit expense, except:
a. Actuarial gain or loss
b. Interest expense on asset ceiling
c. Interest income
d. Past Service cost

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3|P a g e RSORIANO/JM AGLINAO