Which is incorrect concerning the FRSC?

a. TheFRSC replaces the ASC as the standard setting body in the Philippines
b. The FRSC is composed of 15 members with a Chairman and 14 representatives from various sectors.
c. The Chairmanand members of the FRSC shall have a term of 3 years renewable for another term
d. Any member of the ASC shall be disqualified from being appointed to the FRSC.

25. Accounting information is considered to be relevant when it:

a. can be depended on to represent the economic conditions and events that is intended to represent
b. is capable of making a difference in a decision
c. is understandable by reasonably informed users of accounting information.
d. Is verifiable and neutral.

26. Which statement best describes generally accepted accounting principles?

a. they have been formulated mainly for the public sector
b. they have been developed on the basis of such factors as evidence, reason, custom, usage and to a significant extent,
practical necessity
c. they are the same as laws within our legal system
d. they do not apply to small enterprises

27. Subsequent to initial recognition, loans and receivables are measured at

a. Cost
b. Amortized cost using the straight line method
c. Amortized cost using the effective interest method
d. Fair value

28. Accounting for the interest in a non interest bearing note receivable is an example of what aspect of accounting theory?
a. Matching b. Verifiability
c. Substance over form d. Accounting entity

29. A company shows cash balance of P175,000 on its bank statement dated June 30. As of June 30, there are 55,000 of
outstanding checks and P37,500 of deposits in transit.
What is the correct cash balance on the company books as of June 30? d. 157,500

30. Based upon its assessment of collectability of its receivable, Eden company expects to
incur impairment loss (bad debts expense) of 20,000. On Jan. 1, 2009, the allowance for
doubtful accounts balance was 10,000. During 2009, Eden wrote off 18,000 of uncollectible
accounts and recovered 5,000 of bad debts written off in prior years. If credit sales for 2009
totaled 1,000,000, the allowance for bad debts at Dec. 31, 2009 should be:
a. 12,000 b. 17,000 c. 20,000 d. 30,000
31. A method of estimating doubtful accounts that emphasizes asset valuation rather than
income measurement is the allowance method based on
a. Aging the receivables c. Gross sales
b. Direct write off d. Credit sales less discounts and returns

32.When notes receivable is impaired, any collectible amount to be reported in the balance
sheet should
a. principal amount of the note
b. interest on the note
c. discounted value of the note
d. present value of the anticipated cash flows

33. The total amount of receivables of BOGAY reveals the following:

Accounts receivable 600,000
Customer’s credit balances (50,000)
Installment sales 100,000