1. Which of the following is not a related party of an entity?

Answer: A bank providing loan to the entity

2. Close family members of an individual include all of the following, except

Answer: Brothers and sisters of the individual

3. Financial statements shall include disclosure of material transactions between related

parties, except

Answer: Sales of inventory by a subsidiary to the parent when consolidated financial statements
are prepared.

4. An entity has cosigned the mortgaged note on the home of its president guaranteeing
the indebtedness in the event that the president should default. The entity considers the
likelihood of default to be remote. How should the guarantee be treated in the financial
statements?

Answer: Disclosed only

5. ABC Company has three lines of business, each of which was determined to be
reportable segment. ABC Company sales aggregated P8,250,000 in the current year, of
which Segment No. 1 contributed 40%. Traceable costs were P1,500,000 for Segment
No. 1 out of a total of P4,500,000 for the entity as a whole. For external reporting, ABC
allocates common costs of P1,250,000 based on the ratio of a segment's income before
common costs to the total income before common costs. Calculate the segment
income before Common Costs.

Answer: 1,800,000

6. An entity shall disclose which of the following general information?

Answer: Factors used to identify the reportable segments and types of products and services

7. ABC Company has four manufacturing divisions, each of which has been determined to
be a reportable segment. Common costs are appropriately allocated on the basis of
each division's sales in relation to ABC's aggregate sales. ABC's Alpha division
accounted for 60% of ABC's total sales in the current year. For the current year ended
December 31, ABC had sales of P10,500,000 and traceable costs to Alpha of P3,450,000.
In the current year, ABC incurred costs of P750,000 that were not directly traceable to
any of the divisions. In addition, the Alpha division incurred interest expense of P375,000.
It is an entity policy that interest expense is included in the measure of profit or loss that
is reviewed by the chief operating decision maker. In reporting supplementary segment
information, what amount should be disclosed as Alpha's profit for the current year?
Answer: 2,025,000

8. Which of the following would not be considered key management personnel

compensation?

Answer: Reimbursement of out-of-pocket expenses

9. If a financial report contains both the consolidated financial statements of a parent and
the parent's separate financial statements, segment information is required in

Answer: The consolidated financial statements only

10. Operating segments that do not meet any of the quantitative thresholds

Answer: May be considered reportable and separately disclosed if management believes that
information about the segment would be useful to the statement users.

11. Which is true concerning the 75% overall size test for reportable segments?

Answer: The total external revenue of all reportable segments is 75% or more of the entity's
external revenue

12. ABC Company has three lines of business, each of which was determined to be
reportable segment. ABC Company sales aggregated P8,250,000 in the current year, of
which Segment No. 1 contributed 40%. Traceable costs were P1,500,000 for Segment
No. 1 out of a total of P4,500,000 for the entity as a whole. For external reporting, ABC
allocates common costs of P1,250,000 based on the ratio of a segment's income before
common costs to the total income before common costs. In its financial statements for
the current year, what amount should ABC report as profit for Segment No. 1?

Answer: 1,200,000

13. Which of the following best indicates that two parties are related for purposes of PAS 24?

Answer: One party has the ability to affect the financial and operating decisions of the other
party through control, significant influence or joint control.

14. Which of the following is not specified as a separate related party disclosure?

Answer: An entity that has a common director with the entity.

15. ABC Company, a publicly owned entity, is subject to the requirements of PFRS 8. In its
income statement for the year ended December 31, 2021, ABC reported revenue of
65,000,000 including intersegment sales of 7,250,000, expenses of 47,000,000 and net
income of 18,000,000. Expenses include payroll costs of 15,000,000. ABC's combined
identifiable assets of all operating segments on December 31, 2021 totaled 40,000,000.
External Revenue of reportable operating segments must be at least?
Answer: 43,312,500

16. Which is not a required minimum related party disclosure?

Answer: The amount of similar transaction with unrelated parties to establish that comparable
related party transactions have been entered into at arms length

17. What is the overriding consideration when determining the existence of a related party
relationship?

Answer: The ability of one party to affect decisions of another party regarding the relevant
activities through the existence of control, joint control or significant influence.

18. An entity that entered into a related party transaction would be required to disclose all of
the following information, except

Answer: Nature of any future transaction planned between the parties and the terms involved.

19. In financial reporting for operating segments, an entity shall disclose all of the following,
except

Answer: The title of the chief operating decision maker

20. ABC Company has four manufacturing divisions, each of which has been determined to
be a reportable segment. Common costs are appropriately allocated on the basis of
each division's sales in relation to ABC's aggregate sales. ABC's Beta division accounted
for 40% of ABC's total sales in the current year. For the current year ended December 31,
Beta had sales of P7,000,000 and traceable costs of P3,750,000. In the current year, ABC
incurred costs of P900,000 that were not directly traceable to any of the divisions. In
addition, the Beta division incurred interest expense of P420,000. It is an entity policy
that interest expense is included in the measure of profit or loss that is reviewed by the
chief operating decision maker. In reporting supplementary segment information, what
amount should be disclosed as Beta's profit for the current year?

Answer: 2,470,000

21. Unrelated parties include of the following, except

Answer: Key management personnel and close family members of such individuals

22. Related parties include all of the following, except

Answer: Two entities that have a common director

23. ABC Company, a publicly owned entity, is subject to the requirements of PFRS 8. In its
income statement for the year ended December 31, 2021, ABC reported revenue of
65,000,000 including intersegment sales of 7,250,000, expenses of 47,000,000 and net
 income of 18,000,000. Expenses include payroll costs of 15,000,000. ABC's combined
identifiable assets of all operating segments on December 31, 2021 totaled 40,000,000.
In its financial statements, ABC should disclose major customer data if sales to any
single customer amount to at least?

Answer: 5,775,000

24. Which is not a mandated related party disclosure?

Answer: Names of all the associates that an entity has dealt with during the year

25. According to PAS 24, related party disclosures are necessary

Answer: To indicate the possibility that an entity's financial position and performance might
have been affected by the existence of such relationship.

26. The following information pertains to ABC Company and its divisions for the current year:

Sales to Unaffiliated Customers - 25,000,000

Intersegment Sales of Products similar to those sold to unaffiliated customers - 3,000,000

Interest earned on loans to other operating segments- 350,000

ABC and all of its divisions are engaged solely in manufacturing operations.

What is the minimum amount of revenue required to be sold to a major customer for purposes
of disclosure?

Answer: 2,500,000

27. All of the following fall within the definition of an entity's related party, except

Answer: The partner of a key manager is a major supplier of the entity

28. ABC Company and its divisions are engaged solely in manufacturing. The following data
pertain to the industries in which operations were conducted for the current year:

S- 2,400,000

T- (345,000)

U- 72,000

V- (1,200,000)

W- (234,000)

Calculate the minimum profit or loss in order for a segment to be considered as reportable.
Answer: 247200

29. The term chief operating decision maker

Answer: Refers to a function of allocating resources to the operating segments and assessing
their performance

(29 ra sya tanan kay naay item dara nga worth 2 points.)