Question 1

1 / 1 pts
True or False 
An arrangement is considered a joint arrangement only if all the parties have joint
control of the arrangement.

  
True
 
  
False
 
 
Question 2
1 / 1 pts
A joint arrangement is either a joint operation or a joint venture.
 

  
True
 
  
False
 
 
Question 3
1 / 1 pts
When the transaction with the joint venture is downstream, the entire unrealized
profit will be eliminated.

  
True
 
  
False
 
 
Question 4
1 / 1 pts
Spot rate is the rate at which currencies can be exchanged at some future date.
 

  
True
 
  
False
 
 
Question 5
1 / 1 pts
A foreign exchange rate is the price of a currency expressed in terms of another
currency.
 

  
True
 
  
False
 
 
IncorrectQuestion 6
0 / 1 pts
Foreign currency transaction is the process of expressing monetary amounts that are
stated in terms of a foreign currency into the currency of the reporting entity.
 

  
True
 
  
False
 
 
Question 7
1 / 1 pts
A sales agency is self-contained business that acts only on behalf of the home office.

  
True
 
  
False
 
 
Question 8
1 / 1 pts
A branch is a self contained business which acts independently but subject to the
control of the home office.

  
True
 
  
False
 
 
IncorrectQuestion 9
0 / 1 pts
Transactions between a branch and an external party are recorded In the regular
manner.

  
True
 
  
False
 
 
IncorrectQuestion 10
0 / 1 pts
Excess freight on inter-branch transfer of merchandise is added to the cost of the
inventory of the branch.

  
True
 
  
False
 
 
Question 11
1 / 1 pts
Transactions between a home office and its branch are accounted for in reciprocal
accounts. These accounts are for internal reporting purposes only and are eliminated
when preparing general-purpose financial statements.
 

  
True
 
   
False
 
 
Question 12
1 / 1 pts
Realized gross profit is computed by multiplying gross profit rate by collections of
accounts receivable.

  
True
 
  
False
 
 
Question 13
1 / 1 pts
Merchandise received as trade- in is recognized at “fair value” and in determining
realized gross profit, such fair value of the traded-in-merchandise is considered as
part of collections.

  
True
 
  
False
 
 
Question 14
1 / 1 pts
Deferred gross profit end is equal to the balance of the Installment account
receivable, and multiply by the gross profit rate.

  
True
 
  
False
 
 
Question 15
1 / 1 pts
The “installment sales method” maybe used when the entity uses the “income tax
basis” of accounting.
   
True
 
  
False
 
 
Question 16
1 / 1 pts
A consignor recognizes revenue from a consignment arrangement when the goods
are sent to a consignee.

  
True
 
  
False
 
 
Question 17
1 / 1 pts
Consigned goods are included in the consignee’s inventory

  
True
 
  
False
 
 
Question 18
1 / 1 pts
Freight and other incidental costs of transferring consigned goods to the consignee
form part of the cost of the consigned goods.

  
True
 
  
False
 
 
Question 19
1 / 1 pts
PFRS 4 applies to insurance and reinsurance contracts issued by an insurer
reinsurance contracts that it holds, and contracts that it issues with discretionary
participation feature (PDF)
 

  
True
 
  
False
 
 
Question 20
1 / 1 pts
Insurance risk is risks including financial risk, transferred from the holder a contract
to the issuer

  
True
 
  
False
 
 
IncorrectQuestion 21
0 / 1 pts
PFRS 4 regularly permits insurance companies to continue using their own
accounting policies.

  
True
 
  
False
 
 
Question 22
1 / 1 pts
If the carrying amount of insurance liability, net of deferred acquisition cost is less
than its current estimate, the deficiency in insurance liability is recognized in profit or
loss.
 

  
True
 
  
False
 
 
Question 23
1 / 1 pts
Under the 24th method it is assumed that policies written during any month were
issued at the end of that month.

  
True
 
  
False
 
 
Question 24
1 / 1 pts
Gross single premiums from the life insurance contracts as recognized are revenue
at the inception of the contract.

  
True
 
  
False
 
 
Question 25
1 / 1 pts
Gross regular premiums from life insurance contracts are recognized as revenue
when they become payable by the policyholder.

  
True
 
  
False
 
 
IncorrectQuestion 26
0 / 1 pts
Premiums from short-duration non-life insurance contracts are recognized using the
24th method, including those contracts covering marine cargo risks where premiums
for the last 2 months of the  year and recognized as revenue in the following year.

  
True
 
  
False
 
 
Question 27
1 / 1 pts
Insurance liability represents as insurer’s net contractual rights under an insurance
contracts
 

  
True
 
  
False
 
 
Question 28
1 / 1 pts
Products warranties issued by another party for goods sold by a manufacturer is an
example of insurance contract.

  
True
 
  
False
 
 
Question 29
1 / 1 pts
A pure risk may produce a gain or loss
 

  
True
 
   
False
 
 
Question 30
1 / 1 pts
The principal objective of every insurance contract is to provide financial protection
to the insured is case of occurrence of an uncertain future event.

  
True
 
  
False
 
 
Question 31
1 / 1 pts
Multiple Choice Theory
A joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the arrangement.

  
Joint arrangement
 
  
Joint venture
 
  
Elbow joint
 
  
Joint operation
 
 
Question 32
1 / 1 pts
A joint arrangement whereby the parties that have joint control of the arrangement
have rights to the assets, and obligations for the liabilities, relating to the
arrangement.

  
Joint Operation
 
   
Elbow joint
 
  
Joint arrangement
 
  
Joint venture
 
 
IncorrectQuestion 33
0 / 1 pts
In a joint arrangement ,which of the following establishes joint control by the parties?

  
Mutual sharing of control
 
  
Ownership interest of more than 20%
 
  
Stock certificate
 
  
Contractual arrangement
 
 
Question 34
1 / 1 pts
For importing and exporting transactions, recognizing in the income statement FX
transactions gains or losses resulting from adjustments made at intervening financial
reporting dates is not

  
Essentially current-value accounting
 
  
None of the above
 
  
A disregarding of the realized versus unrealized concept.
 
  
Essentially current-value accounting
 
  
Consistent with the one-transaction perspective
 
 
Question 35
1 / 1 pts
A domestic exporter has foreign currency receivables. The exporter’s risk exposure
is that the

  
Foreign currency will strengthen.
 
  
none of the above
 
  
Peso will weaken
 
  
Indirect exchange rate will decrease
 
  
Direct exchange rate will decrease
 
 
Question 36
1 / 1 pts
A domestic importer whose transactions are in foreign currency has risk exposure
that the

  
Indirect exchange rate will decrease
 
  
Foreign currency will strengthen.
 
  
None of the above
 
  
Peso will weaken
 
  
Direct exchange rate will decrease
 
 
Question 37
1 / 1 pts
For external reporting, the individual financial statements of the home office and the
branch are combined

  
By using complex consolidation procedures
 
  
By adding together similar items of assets, liabilities, income and expenses
 
  
By recognizing the home’s office own assets, liabilities, income and expenses plus
its share in the branch’s assets, liabilities, income and expenses
 
  
By adding together similar items of assets, liabilities, income and expenses and
eliminating reciprocal accounts.
 
 
Question 38
1 / 1 pts
The depreciation expense on equipment being used by the branch but carried in the
books of the home office is recorded in the branch’s books as

  
Not recorded
 
  
Debit to investment in branch and credit to accumulated depreciation
 
  
Debit to depreciation expense and credit to home office account.
 
  
Debit to depreciation expense and credit to investment in branch
 
 
IncorrectQuestion 39
0 / 1 pts
A debit memo received from the home office is recorded by the branch as

  
Debit to home office account
 
  
Credit to home office account
 
  
Debit to investment account
 
  
Debit to allocated expense
 
 
Question 40
1 / 1 pts
Under the installment sales method, gross profit from an installment sale is

  
Initially deferred and amortized over the period of settlement using the effective
interest method
 
  
Recognized only when collection exceed the cost of goods sold.
 
  
Initially deferred and periodically recognized as the installment payments are
received by multiplying the gross profit rate by the installment received.
 
  
Recognized in full at the point of sale
 
 
Question 41
1 / 1 pts
Under the installment sales method, realized gross profit is computed as

  
Gross profit rate divided by collection on sale
 
  
Sale price less Cost of goods sold
 
  
Excess of collection over cost of goods sold
 
  
Gross profit rate multiplied by collection on sale
 
 
IncorrectQuestion 42
0 / 1 pts
Which of the following may represent the realized gross profit under the installment
sales method?

  
Decrease in installment account receivable less defaulted receivable
 
  
Total collection less collection pertaining to interest
 
  
Decrease in deferred gross profit
 
  
Collection divided by gross profit rate
 
 
IncorrectQuestion 43
0 / 1 pts
Gross profit rate based on sale is computed as

  
Gross profit divided by cost of sales
 
  
All of these
 
  
Gross profit divided by sales
 
  
Deferred gross profit divided by collection
 
 
IncorrectQuestion 44
0 / 1 pts
Gross profit rate based on cost is computed as

  
Deferred gross profit divided by collection
 
  
Gross profit divided by cost of sales
 
  
All of these
 
  
Gross profit divided by sales
 
 
Question 45
1 / 1 pts
Goods on consignment should be included in the inventory of

  
Both the consignor and consignee.
 
  
Neither the consignor nor the consignee.
 
  
The consignee but not the consignor
 
  
The consignor but not consignee.
 
 
Question 46
1 / 1 pts
Consignor Co. paid the in-transit insurance premium for consignment goods shipped
to Consignee Co. In addition, Consignor advanced part of the commission that will
be due when Consignee sells the good. Should Consignor include the in-transit
insurance premium and the advanced commissions in inventory costs?

  
Insurance Premium     Advanced Commission 
           Yes                                            Yes
  
Insurance Premium     Advanced Commission 
           Yes                                            No
  
Insurance Premium     Advanced Commission 
           No                                             Yes
  
Insurance Premium     Advanced Commission 
           No                                             No
 
Question 47
1 / 1 pts
Black Co., a consignee, paid the freight costs for goods shipped from White Co., a
consignor. These freight costs are to be deducted from Black’s payment to White
when the consignment goods are sold. Until Black sells the goods, the freight costs
should be included in Black’s

  
Selling expense
 
  
Cost of goods sold
 
  
Receivable
 
  
Freight-out
 
 
Question 48
1 / 1 pts
In accounting for sales on consignment, sales revenue and the related cost of goods
sold should be recognized by the

  
Consignee when the goods are shipped to the third party.
 
  
Consignee when cash is received from the customer.
 
  
Consignor when notification is received that the consignee has sold the goods
 
  
Consignor when the goods are shipped to the consignee.
 
 
Question 49
1 / 1 pts
Which of the following contracts is outside the scope of PFRS 4?

  
Insurance and reinsurance contracts that an insurer issues.
 
  
Reinsurance contacts that an insurer holds.
 
  
Product warranties
 
  
Financial instruments with discretionary participation feature that an insurer issues
 
 
Question 50
1 / 1 pts
According to PFRS 4, it is a contract under which one party accepts significant
insurance risk from another party by agreeing to compensate the policyholder if a
specified uncertain future events adversely affects the policyholder.

  
Insurance swap
 
  
Financial guarantee
 
  
Reinsurance contract
 
  
Insurance contract
 
 
Question 51
1 / 1 pts
According to PFRS 4, it is an uncertain future event that is covered by an insurance
contract and creates insurance risk.

  
Adverse event
 
  
Risk generating event
 
  
Hazard
 
  
Insured event
 
 
Question 52
1 / 1 pts
According to PFRS 4, it refers to the party that has an obligation under an insurance
contract to compensate a policyholder if an insured event occurs.

  
Obligee
 
  
Any of these
 
  
Policyholder
 
  
Insurer
 
 
Question 53
1 / 1 pts
According to PFRS 4, it refers to the party that has a right to compensation under an
insurance contract if an insured event occurs

  
Insurer
 
  
Obligee
 
  
Policyholder
 
  
Any of these
 
 
Question 54
1 / 1 pts
Risk (or uncertainty) is a fundamental element of an insurance contract. Which of the
following is uncertain at the inception of an insurance contract?

  
The level of indemnification that the insurer will need to pay the insured if the event
occurs
 
  
The occurrence of an insured event
 
  
All of these
 
  
The timing of the event
 
 
Question 55
1 / 1 pts
According to PFRS 4, it is the risk of a possible future change in one or more of a
specified interest rate, financial instrument price, commodity price, foreign exchange
rate, index of prices or rates, credit rating or credit index or other variable, provided
in the case of a non-financial variable that the variable is not specific to a party to the
contract.

  
Lapse or persistency risk
 
  
Financial risk
 
  
Insurance risk
 
  
Expense risk
 
 
Question 56
1 / 1 pts
According to PFRS 4, it is risk other than financial risk, transferred from the holder of
a contract to the issuer.

  
Insurance risk
 
  
Speculative risk
 
  
Financial risk
 
  
Pure risk
 
 
Question 57
1 / 1 pts
This refers to the legal principle that the insured must be benefited by the insured
property’s existence and prejudiced by its destruction. It is a requisite in the
enforceability of an insurance contract.

  
Principle of insurance interest
 
  
Principle of contribution
 
  
Principle of utmost good faith
 
  
Principle of indemnity
 
 
IncorrectQuestion 58
0 / 1 pts
This refers to the legal principle that all material facts concerning an insurance
contract must be made known to the contracting parties.

  
Principle of utmost good faith
 
  
Principle of full disclosure
 
  
Principle of contribution
 
  
Principle of indemnity
 
 
Question 59
1 / 1 pts
When a loss is caused by more than one loss events, the closest cause, not the
furthest cause, is taken into consideration when determining the extent of the
insurer’s liability. This is an application of which legal principle of insurance?

  
Principle of proximate cause
 
  
Principle of contribution
 
  
Principle of indemnity
 
  
Principle of loss maximization
 
 
Question 60
1 / 1 pts
PFRS 4 expressly:

  
Requires a test for the adequacy of recognized insurance liabilities
 
  
All of these
 
  
Prohibits provisions for possible claims under contracts that are not in existence at
the reporting date (referred to as catastrophe or equalization provisions)
 
  
Prohibits the off-setting of reinsurance assets against the related insurance liabilities;
or income or expense from reinsurance contracts against the expense or income
from the related insurance contracts.
 
 
Question 61
2 / 2 pts
Multiple Choice Problem
Question 1-4
A, B and C agreed to form a joint operation. Profit or loss of the joint operation shall
be divided equally. Separate books for the joint operation shall be set up and
maintained by B, the appointed manager of the joint operation. The following were
the transactions during the year:
a. Inventory costing P100 was sent by A to B
b. Freight paid by A on the inventories sent to B amounted to P5.
c. Cash of P200 was sent by C to B to be used to purchase additional inventory.
d. B purchased additional inventory amounting to P250, P50 of which were made on
account of B.
e. Cash sales made by B amounted to P800.
f. Operating expenses amounting to P55 were paid by B using its own cash
g. Unsold inventory at year-end amounted to P30.
1. The profit or loss of the joint operation is

  
445
 
  
425
 
  
420
 
  
400
 
 
Question 62
2 / 2 pts
2. The cost of goods sold is

  
75
 
  
300
 
  
325
 
  
355
 
 
Question 63
2 / 2 pts
3. The cash left to be used as settlement to A,B, & C is a

  
900
 
  
800
 
  
830
 
  
770
 
 
Question 64
2 / 2 pts
4. The cash received by C is 
   
340
 
  
275
 
  
310
 
  
245
 
 
Question 65
2 / 2 pts
Question 5-8 
On November 1, 20x4, a Philippine company received an order for 100 units of
inventory for $50,000 from a US firm. Th Philippine Company shipped the goods and
billed the US firm on December 1,20x4. The Philippine Company received the
customer’s remittance in full on March 1, 20x5. The customer’s remittance in full on
March 1, 20x5. The company’s accounting period ends on December 31. Assume
further that the Philippine Company did not engage in any form of hedging activity.
The spot rates for US dollars at various dates are as follows:
                                          Buying Spot Rate     Selling Spot Rate
Nov. 1, 20x4                        P39.80                           P40.25
Dec. 1, 20x4                        P40.00                           P40.55
Dec. 31,20x4                      P40.70                           P40.80
March 1,20x5                     P40.60                           P40.65
5. The entry of the Philippine firm on December 1, 20x4 is

  
Debit cash P2,000,000
 
  
Debit cash P2,027,500
 
  
Debit accounts receivable P2,027,500
 
  
Debit accounts receivable P2,000,000
 
 
Question 66
2 / 2 pts
6. On December 31, 20x4, amount credited to foreign currency transaction gain
account is

  
40,000
 
  
50,000
 
  
30,000
 
  
35,000
 
 
Question 67
2 / 2 pts
7. The debit to cash on March 1, 20x5 is

  
2,050,000
 
  
2,030,000
 
  
2,040,000
 
  
2,035,000
 
 
Question 68
2 / 2 pts
8. The debit to Foreign Currency Transaction loss on March 1, 20x5 is

  
zero
 
   
P5,000
 
  
P25,000
 
  
P30,000
 
 
Question 69
2 / 2 pts
Question 9-18
The following information was taken from the records of a branch:
Sales by branch                                                     700,000
Billings to branch by home office                      625,000
Operating expenses                                           100,000
Ending inventory at billed price                         250,000
The following information was taken from the records of the home office:
Branch current account                                 650,000
Shipments to branch                                        500,000
Allowance for mark-up - Unadjusted           125,000
9. The billing rate based on cost or mark-up percentage based on cost

  
120%
 
  
150%
 
  
140%
 
  
125%
 
 
Question 70
2 / 2 pts
10. Sales of the branch to be included in the combined financial statements

  
1,200,000
 
  
700,000
 
  
1,325,000
 
  
750,000
 
 
Question 71
2 / 2 pts
11. Realized mark-ups

  
125,000
 
  
100,000
 
  
75,000
 
  
50,000
 
 
Question 72
2 / 2 pts
12. Cost of goods sold of branch to be included in the combined financial statements

  
300,000
 
  
375,000
 
  
250,000
 
  
500,000
 
 
Question 73
2 / 2 pts
13. Ending inventory of branch to be included in the combined financial statements

  
200,000
 
  
150,000
 
  
250,000
 
  
125,000
 
 
Question 74
2 / 2 pts
14. Unrealized mark-ups in ending inventory

  
75,000
 
  
100,000
 
  
25,000
 
  
50,000
 
 
Question 75
2 / 2 pts
15. Ending balance of the “allowance for mark-ups account before combining the
financial statements

  
75,000
 
  
50,000
 
  
60,000
 
  
25,000
 
 
Question 76
2 / 2 pts
16. Individual profits of the branch

  
250,000
 
  
225,000
 
  
300,000
 
  
175,000
 
 
Question 77
2 / 2 pts
17. True profits of the branch

  
300,000
 
  
225,000
 
  
175,000
 
  
250,000
 
 
Question 78
2 / 2 pts
18. Adjusted balance of the Branch Current account immediately prior to combining
the financial statements

  
625,000
 
  
950,000
 
  
875,000
 
  
900,000
 
 
Question 79
2 / 2 pts
Question 19-24
ABC Co. uses the installment sales method. On January 1, 20x3 ABC Co.’s records
show the following balances:
Installment receivable - 20x1                    400,000
Installment receivable - 20x2                1,200,000
Deferred gross profit - 20x1                         88,000
Deferred gross profit - 20x2                      288,000
 
On December 31, 20x3, ABC Co’s records show the following
balances before adjustments for realized gross profit:
Installment receivable - 20x1                           -
Installment receivable - 20x2                   480,000
Installment receivable - 20x3               1,200,000
Deferred gross profit - 20x1                        88,000
Deferred gross profit - 20x2                     288,000
Deferred gross profit - 20x3                     750,000
Installment sales in 20x3 were made at 33 1/3 above cost.
19. The installment sale in 20x3 is 

  
2,600,000
 
  
2,500,000
 
  
2,800,000
 
  
3,000,000
 
 
Question 80
2 / 2 pts
20. Cash collection in 20x3 for the 20x1 installment

  
300,000
 
  
400,000
 
  
zero
 
  
480,000
 
 
Question 81
2 / 2 pts
21. Cash collection in 20x3 for the 20x2 installment sale is

  
1,200,000
 
  
720,000
 
  
400,000
 
  
480,000
 
 
Question 82
2 / 2 pts
22. Cash collection in 20x3 for the 20x3 installment sale 

  
3,000,000
 
  
1,800,000
 
  
2,000,000
 
  
1,200,000
 
 
Question 83
2 / 2 pts
23. The gross profit rate based on sales 

  
   20x1                    20x2
    25%                     25%
  
   20x1                    20x2
    22%                     25%
  
   20x1                    20x2
    24%                     22%
  
   20x1                    20x2
    22%                     24%
 
Question 84
2 / 2 pts
24. Total realized gross profit is 20x3

  
450,000
 
  
810,300
 
  
622,800
 
  
710,800
 
 
Question 85
2 / 2 pts
Question 25-31
On June 1, 20x4, Jonathan Company shipped 25 television sets to Binaluyo D’Great,
Inc. on consignment. The sets are to be sold at an advertised price of P20,000. The
cost of each set to the consignor was P10,000.
The cost of shipment paid by the consignor was P7,500.
The consignor agreed to absorb the consignee’s expenditure for freight and also to
allow the consignee P1,000 for delivery and installation of each set.
Commission is to be 25% of the sales price. On June 30, 20x4, Binaluyo D’Great
submitted the following summary of consignment sales:

Sets received  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   
25
Sets sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
8
Sets returned to consignor (defective) . . .                 
 2             10
Sets on hand  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     
15
Charges: 
              Freight-in . . . . . . . . . . . . . . . . . . . . . .  . . . . 
P5,000
              Advertising expense . . . . . . . . . . . . . . .       
2,000
             Deliveries and installation expense . .           
8,000
              Repairs expense - on units expense . .         
4,000
              Commissions, 25% of sales . . . . . . . . . .     
40,000
              Remittance . . . . . . . . . . . . . . . . . . . . . . . .  .
.             25,000

25. Sales amounted to

  
P100,000
 
  
P160,000
 
  
P80,000
 
  
P200,000
 
 
Question 86
2 / 2 pts
26. Commission amounted to 

  
P50,000
 
  
P40,000
 
  
P25,000
 
  
P20,000
 
 
Question 87
2 / 2 pts
27. Total due to consignor is

  
P25,000
 
  
P200,000
 
  
P101,000
 
  
P100,000
 
 
Question 88
2 / 2 pts
28. Balance due to consignor after remittance is 

  
zero
 
  
P75,000
 
  
P25,000
 
  
P76,000
 
 
Question 89
2 / 2 pts
29. Items on hand is 

  
17 units
 
  
12 units
 
  
13 units
 
  
15 units
 
 
IncorrectQuestion 90
0 / 2 pts
30. Cost of consigned goods sold is 

  
80,000
 
  
83,000
 
  
90,000
 
  
85,000
 
 
Question 91
2 / 2 pts
31. Net income on consignment sales in

  
25,000
 
  
21,000
 
   
46,000
 
  
18,000
 
 
Question 92
2 / 2 pts
Question 32-34
Erlinda Magalona insurance is an insurer which conducts general insurance
business. For the year ended December 31,20x4, its total gross premiums written on
vehicle insurance policies were P3,000,000, of which P300,000 was ceded out to
reinsurers.
By December 31, 20x3, the unearned premium reserve was P960,000. as of
December 31, 20x4, an unearned premium reserve amount of P1,200,000 is
considered necessary.

32. On December 31, 20x4, the net premium amounted to:

  
P900,000
 
  
P2,700,000
 
  
Nil
 
  
P9,000,000
 
 
Question 93
2 / 2 pts
33. The increased in unearned premium reserved amounted to:

  
Nil
 
  
P240,000
 
   
P960,000
 
  
P1,200,000
 
 
Question 94
2 / 2 pts
34. The earned premium amounted to :

  
Nil
 
  
P2,700,000
 
  
P2,460,000
 
  
P9,000,000
 
 
Question 95
2 / 2 pts
Question 35-36
Elizabeth De Leon, Insurance Company have one-year vehicle insurance policy with
a premium of P37,500 is written on October 1, 20x4 and the risk covered is up to
September 30, 20x5 , then for an insurer with a financial year that ends on
December 31, the unexpired risk period of this policy at the year-end if from January
1 ,20x5 to September 30,20x5 .
If the insurer has another similar (second) policy (premium of P50,000) that is written
on December 1, 20x4.
35. On December 31, 20x4, the unearned premium for the first policy (insurance rate
of 35%)

  
P18,750
 
  
P37,500
 
   
Nil
 
  
P28,151
 
 
Question 96
2 / 2 pts
36. The increased in unearned premium reserved amounted to:

  
P45,890
 
  
P50,000
 
  
P4,110
 
  
Nil
 
 
Question 97
2 / 2 pts
Question 37-38

The following relates to major insurance premiums written by Jennifer Talosig-Tan and Portia
Nacinopa Insurance Company has its financial year ended December 31, 20x7:

First Quarter . . . . . .                           P 31,250

Second Quarter . . . . .                           25,000

Third Quarter . . . . .                                93,750

Fourth Quarter . . . .                              62,500

                                                               P212,500

As January 1, 20x7, the unearned premium reserve balance amounted to P150,000. Using the
1/8th method, compute the unearned premium reserve as of December 31, 20x7 amounted to
P126,562.5, computed as follows:

                                          Premiums    Unexpired period     Unearned Premium Reserve

First Quarter            P31,250                     1/8                                  P  3,906.25

Second Quarter         25,000                     3/8                                       9,375.00

Third Quarter              93,700                    5/8                                   58,593.75

Fourth Quarter           62,500                    7/8                                  54,687.50

                                     P212,500                                                    P 126,562.50

37. Using the 1/8th, the unearned premium reserve as of December 31, 20x7 amounted:

  
P212,500.00
 
  
P85,937.50
 
  
P126,562.60
 
  
P54, 687.50
 
 
Question 98
2 / 2 pts
38. In relation No. 37, the premium revenue (rounded) for 20x7 amounted to:

  
P23,437.50
 
  
P212,500.00
 
  
P85,937.50
 
  
P126,562.50
 
 
IncorrectQuestion 99
0 / 2 pts
Question 39-41
X Insurance Co. offers fire insurance On January 1, 20x1, it received notice from its
broker of a sale of one-year fire insurance for a premium of P1,000. Brokers
commission is 10%.
39. The debit to insurance receivable- direct is

  
P1,100
 
  
zero
 
  
P1,000
 
  
P900
 
 
Question 100
2 / 2 pts
40. The debit to commission expense is

  
P100
 
  
P1,000
 
  
zero
 
  
P90
 
 
IncorrectQuestion 101
0 / 2 pts
41. The credit to gross premium revenue -direct

  
P1,000
 
  
P100
 
  
P900
 
  
zero
 
 
IncorrectQuestion 102
0 / 2 pts
Question 42-45
On April 1, 20x1, R Insurance Co. Writes fire insurance policies for a total premium
of P36,000. During the same period, total premiums of P12,000 were ceded to
reinsurers.
42. Using the 24thmethod the net  premium earned for the year ended December 31.
20x1.

  
25,500
 
  
8,500
 
  
36,000
 
  
17,000
 
 
Question 103
2 / 2 pts
43. The unearned portion on December 31, 20x1 is

  
35,500
 
  
10,500
 
  
7,000
 
  
8,500
 
 
Question 104
2 / 2 pts
44. The unearned portion by reinsurers on December 31, 20x1 is

  
7,000
 
  
3,500
 
  
10,500
 
  
8,500
 
 
Question 105
2 / 2 pts
45. The provision for unearned premiums net, December 31, 20x1

  
3,500
 
  
7,000
 
  
P10,500
 
  
8,500