Easy

1. A primary source of shareholder's equity is

A. Income retained by the corporation.

B. Appropriated retained earnings.

C. Contributions by stockholders.

D. Both income retained by the corporation and contributions by stockholders

2. The general guidelines used in accounting practice that are based on substantial authoritative support
are called

A. Accounting Postulates C. Accounting Procedures

B. Accounting Conventions D. Accounting Principles

3. The specific methods used by accountants in carrying out the general guidelines provided by GAAP,
including the numerous rules specifying how financial data should be recorded, classified, summarized
and reported are referred to as

A. Accounting Postulates C. Accounting Procedures

B. Accounting Conventions D. Accounting Principles

4. Which of the following statements is/are incorrect? (All are correct)

I. A CPA shall be permanently exempted from CPE requirements upon reaching the age of 60.

II. The total CPE credit units shall be 60 units for three years provided that a minimum of 15 credit units
shall be earned each year.

III. The CPE is required for the renewal of CPA CPA license and accreditation of CPA CPA to practice the
accountancy profession.

5. Is a global phenomenon intended to bring about transparency and a higher degree of comparability in
financial reporting in order to achieve the goal of one uniform and globally accepted financial reporting
standards. (IFRS)
Average

1. Which of the following is/are not true?

A. A subscriber name may appear in the article of incorporation but he may not be an incorporator of
tbe corporation.

B. As a rule, majority of the incorporators of a corporation formed under the Philippine laws, must be
citizen of the Philippines.

C. The by-laws of a corporation may validly provide that one may be a president and secretary or
president and treasurer at the same time.

D. A corporation may be formed for more than one purpose.

2. In the special case where transfers of noncash assets to a corporation are made by its founders or
principal stockholders, such assets are permitted to be measure at

A. Fair value on the date of transfer

B. Fair value on the balance sheet date

C. An amount approved approved by the board of directors

D. Cost to the founders or principal stockholders.

3. The arbitrarily value assigned to a share of stock is called

A. Market value C. Liquidation value

B. Par value D. Book value

4. What is the underlying purpose of the interest on capital balances component of allocating
partnership profits and and losses?

A. Compensate partners who contribute economic resources to the partnership.

B. Reward labor and expertise contributions

C. Reward for special responsibilities undertaken

D. None of the above.

5. What is the world's oldest city?

A. Damascus B. Athens C. Jerusalem D. Jericho

Difficult

1. Which is incorrect concerning accounting for capital stock transactions?

A. When shares with par value are sold, the proceeds should be credited to the capital stock account to
the extent of the par value of the shares with any with any excess being reflected as additional paid in
capital.

B. If shares are issued for a consideration other than cash, the proceeds should be measured by the fair
value of the shares issued.

C. When shares are issued for services received, the measure should be the fair value of such services.

D. In case shares are issued for outstanding liabilities, the amount of the liabilities set off should be the
measure for recording.

2. A "secret reserve" will be created if

A. Inadequate depreciation is charged to income.

B. A capital expenditure is charged to expense.

C. Liabilities are understated.

D. Shareholders' equity is overstated.

3. The principle that a a person is free to choose those whom he wants to be associated in the
partnership is

A. Res perit domino C. Solutio indebiti

B. Delectus personae D. Negotiorum gestio

4. Which of the following is not a qualification of an incorporator?

A. They must be natural persons. C. Majority must be citizens of the Philippines

B. They must be of legal age. D. Must be subscriber to atleast one share

5. Persephone is the daughter of Zeus and ________

A. Hera B. Demeter C. Hestia D. Gaea