According to PAS 24, related party disclosures are necessary

a. because related party transactions may have resulted to assets and liabilities that were recognized in
the financial statements of the reporting entity.

b. to notify users of financial statements of the fact that related party transactions may not have been
made on arm’s length basis.

c. to indicate the possibility that an entity’s financial position and performance might have been affected
by the existence of such relationship.

d. in order to eliminate or minimize the effects of related party transactions on the financial statements
of the reporting entity.

2. What is overriding consideration when determining the existence of a related party relationship? a.
The ability of one party to affect decisions of another party regarding relevant activities through the
existence of control, joint control or significant influence.

b. The presence of relationship either by consanguinity or affinity.

c. The presence of a significant interest by one party over the other.

d. The presence of significant business transactions and economic dependence between the parties.

3. Mr. Y and Ms. Z share joint control over Ventures, Inc. Which of the following are related parties? a.
Mr. Y and Ms. Z c. Ventures, Inc. and PAS 24

b. Ventures, Inc. and Mr. Y d. none of these

4. Entity A is the parent company of Entity B. Which of the following is required to be disclosed in the
group’s (Entity A and B’s) consolidated financial statements?

a. the related party relationship between Entity A and Entity B

b. the related party transactions during the period

c. the outstanding balances in (c)

d. all of these

5. Catalyst Co. is engaged in business process outsourcing. Catalyst subcategorizes its main services into
four: Information Technology, After-sales Support, Accounting, and Offsite Data Management. Catalyst
operates in five major geographical areas: Southeast Asia, North America, South America, Australia and
Europe. Internal reports are based on these five geographical areas. What is the most appropriate basis
of segment reporting for Catalyst?

a. On the basis of the main services provided.

b. On the basis of the geographical areas of operations.

c. On the basis of the domicile country of Catalyst and the rest of the world.

d. Any of these.
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6. Segment A qualifies under the 10% test of total revenues but not on the profit or loss and total assets
tests. Segment A

a. is not a reportable segment.

b. is nonetheless included in the “all others” segment.

c. may be reported as a separate segment.

d. all of these

7. Entity A wants to publish quarterly interim financial reports. Which of the following standards may
Entity A apply in preparing and presenting its interim financial reports?

a. PAS 1 c. PFRS 1

b. PAS 34 d. a or b

8. If an entity does not prepare interim financial reports,

a. its annual financial statements would not conform to the PFRSs.

b. its annual financial statements should not be described to have been prepared in accordance with
PFRSs

c. the conformance of its annual financial statements with the PFRSs is not affected.

d. a and b

9. 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.

10. Interim financial reports prepared in accordance with PAS 34 shall, at a minimum, include a. semi-
annual interim financial statements.

b. complete set of financial statements.

c. condensed set of financial statements.

d. a statement of financial position and an income statement.