17. Which of the following is not one of the current PFRSs?

a. PAS 3

b. PAS 7

c. PAS 8

d. PFRS 5

18. Under the cash basis of accounting, revenues are recorded

a. when they are earned and realized.

b. when they are earned and realizable.

c. when they are earned.

d. when they are collected.

19. Which of the following statements is incorrect?

a. Related party transactions and outstanding balances with other entities in a group are disclosed in an
entity’s financial statements.

b. Intragroup related party transactions and outstanding balances are not eliminated in the preparation
of consolidated financial statements of the group.

c. Related party relationships are a normal feature of commerce and business.

d. A related party relationship could have an effect on the profit or loss and financial position of an
entity. e. Knowledge of related party transactions, outstanding balances and relationships may affect
assessments of an entity’s operations by users of financial statements, including assessments of the
risks and opportunities facing the entity.

20. An entity’s ability to affect the financial and operating policies of an investee is through the presence
of I. Control

II. Joint control

III. Significant influence

a. I only b. I or III c. Any of I, II, or III d. I, II and III

21. Which of the following statements is correct?

I. The profit or loss and financial position of an entity may be affected by a related party relationship
even if related party transactions do not occur.

II. The mere existence of the relationship may be sufficient to affect the transactions of the entity with
other parties.

a. True, true b. True, false c. False, false d. False, true

22. All of the parties enumerated are related to an entity , except

a. the entity is a subsidiary, an associate, or a venture in a joint venture.

b. the party is a member of the key management personnel of the entity or its parent.

c. the party is a close member of the family of an individual having control, significant influence, or joint
control