CFAS Quiz 1

12/14/23, 6:21 PM SANTISAS, GERALD's Quiz History: MIDTERM QUIZ 1
MIDTERM QUIZ 1 Results for SANTISAS, GERALD

Score for this attempt: 39 out of 50
Submitted Nov 23 at 9:48am
This attempt took 44 minutes.
Original Score: 0 / 1 pts Regraded Score: 1 / 1 pts

Question 1
 This question has been regraded.
All of the following are events considered as exchange or reciprocal

transfer,
except
purchase of investment in equity securities
sale of equipment for non-interest bearing note
Correct! subscription on the entity’s own equity instrument
exchange of a note payable for an account payable
borrowing of money from a bank

Question 2
Which of the following correctly relates to accountable events?
I. An obsolete asset which has no use was received in exchange of an
existing asset. This transaction may be classified as an exchange.
https://uc-bcf.instructure.com/courses/33599/quizzes/176489/history?version=2 1/29
II. An entity exchanges a non-cash asset for another non-cash asset in an
exchange transaction with commercial substance. This is a reciprocal

transfer.
III. An entity issues its shares of stocks in exchange for a non-cash asset.
This
is a reciprocal transfer.
Correct! II
II, III
I, II, III

Question 3
The primary objective of financial reporting is to provide information:
About a firm's financing and investing activities
ou Answered About a firm's economic resources and obligations
About a firm's products and services
orrect Answer Useful in predicting cash flows

Question 4
Mr. Van owns a butcher shop, a restaurant, and a catering business.

Separate
financial statements are prepared for each business independent of the

other
businesses. What accounting principle or assumption is being applied in

this
situation?
Time period assumption
Correct! Separate entity assumption
Full-disclosure principle
Unit-of-measure assumption

Question 5
Which of the following statements best reflects the accounting assumption

of periodicity or time period?
I. A fiscal year begins in any month and ends in any month but covers a
period of 12 months
II. A calendar year begins on any month and ends on any month but
covers a period of 12 months
III. Technically, an accounting year is synonymous with an accounting

period.
IV. Accounting periods are usually equal in length.
I, II, III, IV
orrect Answer I, IV
ou Answered I, III, IV
II, III, IV

Question 6
An entity uses calendar year as its accounting period. The statement of

financial position prepared on December 31, 20x2 covers the period
December 31, 20x1 to December 31, 20x2
January 1, 20x1 to December 31, 20x2
ou Answered January 1, 20x2 to December 31, 20x2
orrect Answer From business’ inception up to December 31, 20x2
1 / 1 pts
Question 7
General-purpose financial statements are the products of
neither financial nor managerial accounting
Correct! financial accounting
managerial accounting.
both financial and managerial accounting.
1 / 1 pts
Question 8
The law that regulates the practice of accounting in the Philippines is the
Philippine Accountancy Act of 2004 also known as
R.A. Blg. 69
Correct! R.A. No. 9298
R.A. No. 8299
R.A. No. 9892

Question 9
The Board of Accountancy (BOA) shall be composed of
Six (6) members with a chairman for a total of six (6) individuals
Correct! chairman and six (6) members for a total of seven (7) individuals
chairman and fifteen (15) members
chairman and seventeen (17) members
0 / 1 pts
Question 10
In the absence of a GAAP addressing a particular transaction
ou Answered
Management should consider the most recent pronouncements of other
standard-setting bodies that use a similar conceptual framework to
develop accounting standards, other accounting literature and accepted
industry practices
orrect Answer
Management may use its judgment in developing a relevant and reliable
accounting policy
The entity should refer to the Conceptual Framework.
The entity should refer to its External Auditor.

Question 11
The following comments all relate to the recording process. Which of

these statements is correct?
The general ledger is a chronological record of transactions.
Correct!
The general ledger is posted from transactions recorded in the general
journal.
The trial balance provides the primary source document for recording
transactions into the general journal.
Transposition is the transfer of information from the general journal to the

general ledger.

Question 12
A systematic compilation of a group of accounts; also called a “book of

secondary entry”
trial balance
Correct! ledger
worksheet
journal

Question 13
The trial balance:
Is a formal financial statement.
Is used to prove that there are no errors in the journal or ledger.
ou Answered Provides a listing of every account in the chart of accounts.
orrect Answer Provides a listing of the balance of each account in active use.
1 / 1 pts
Question 14
Which of the following statements about adjusting entries is/are correct?
I. Every adjusting entry impacts both a balance sheet and a statement of
profit or loss and other comprehensive income account.
II. Every adjusting entry impacts comprehensive income.
III. If only year-end financial reports are prepared for both external and
internal users then adjusting entries need only to be prepared once a

year.
IV. Adjusting entries are necessitated by the accrual basis accounting. If

an
entity uses the pure cash basis of accounting, there is no need for
adjusting entries.
Correct! I, II, III, IV
I, II, III
II, III, IV
I, II, IV

Question 15
What is the authoritative status of the Conceptual Framework?
It has the highest level of authority. In case of a conflict between the

Conceptual Framework and a Standard or Interpretation, the Conceptual
Framework overrides the Standard or Interpretation.
If there is a Standard or Interpretation that specifically applies to a

transaction, it overrides the Conceptual Framework. In the absence of a
Standard or an Interpretation that specifically applies, the Conceptual
Framework should be followed.
Correct!
If there is a Standard or Interpretation that specifically applies to a
transaction, it overrides the Conceptual Framework. In the absence of a
Standard or an Interpretation that specifically applies to a transaction,
management should consider the applicability of the Conceptual
Framework in developing and applying an accounting policy that will result
in information that is relevant and reliable.
The Conceptual Framework applies only when IASB develops new or

revised Standards. An entity is never required to consider the Conceptual
Framework.

Question 16
They are interested in information that enables them to determine

whether amounts owing to them will be paid when due. They are likely to
be interested in an entity over a shorter period than lenders unless they
are dependent upon the continuation of the entity as a major customer.
investors
lenders
Correct! suppliers
public

Question 17
this information is useful in predicting future borrowing needs and how

future profits and cash flows will be distributed among those with an
interest in the entity; it is also useful in predicting how successful the entity
is likely to be in raising further finance.
economic resources
Correct! financial structure
liquidity and solvency
performance

Question 18
It is assumed that the entity has neither the intention nor the need to
liquidate or curtail materially the scale of its operations; if such an
intention or need exists, the financial statements may have to be prepared
on a different basis and, if so, the basis used is disclosed.
Growing Concern
Cash Basis
Accrual Basis
Correct! Going Concern

Question 19
Information has this quality when it influences the economic decisions of
users by helping them evaluate past, present or future events or

confirming,
or correcting, their past evaluations.
Predictive Value
Correct! Relevance
Reliability
Understandability

Question 20
Which of the following accounting concepts states that before a

transaction is recorded, sufficient evidence must exist to allow two or
more knowledgeable individuals to reach essentially the same conclusion
about the transaction?
Continuity assumption
Materiality constraint
Cost principle
Correct! Verifiability quality

Question 21
The basic elements of the financial position of an entity include the

following:
I. economic resources of an entity that are recognized in conformity with

GAAP
II. economic obligations of an entity that are recognized in conformity with

GAAP
III. gross increases in assets or gross decreases in liabilities recognized

and measured in conformity with GAAP
IV. the interest of owners in an entity which is the excess of an entity’

assets over its liabilities
V. gross decreases in assets or gross increases in liabilities recognized

and measured in conformity with GAAP
I, II, III, IV, V
I, II, III, IV
I, II, III
Correct! I, II, IV

Question 22
When a P300 asset with a six-year estimated useful life is recorded as an

expense at the date of purchase, this is an application of the:
matching principle
cost principle
Correct! materiality constraint
separate entity assumption

Question 23
Owners’ equity equals
capital minus liabilities
assets plus capital
Correct! assets minus liabilities
capital minus assets

Question 24
Increases in owners’ equity arise from
treasury stock acquisition
net losses for a period
Correct! nonreciprocal transfers to an entity from other than owners
transfers from a business to its owners

Question 25
Under this concept, a profit is earned only if the financial (or money)
amount of the net assets at the end of the period exceeds the financial (
or
money) amount of net assets at the beginning of the period, after

excluding
any distributions to, and contributions from, owners during the period. It
can
be measured in either nominal monetary units or units of constant
purchasing power.
Concept of capital
Concept of capital maintenance
Correct! Financial capital maintenance concept
Physical capital maintenance concept

Question 26
All of the following statements correctly refer to PAS 1 Presentation of

Financial
Statements, except
The objective of this Standard is to prescribe the basis for presentation of

general purpose financial statements, to ensure comparability both with the
entity’s financial statements of previous periods and with the financial
statements of other entities.
Correct!
PAS 1 shall be applied to all-purpose financial statements prepared and
presented in accordance with Philippine Financial Reporting Standards
(PFRSs).
The application of PFRSs, with additional disclosure when necessary, is

presumed to result in financial statements that achieve a fair presentation.
Inappropriate accounting policies are not rectified either by disclosure of

the accounting policies used or by notes or explanatory material.

Question 27
Which of the following is not an implied objective of financial reporting?
ou Answered to help allocate limited resources
orrect Answer to influence the market price of shares traded in the stock exchange
to reduce the risk of making economic decisions
to report on the stewardship of enterprise resources

Question 28
The presentation of comparative financial statements is
encouraged by PFRSs
Correct! required by PFRSs
not required by PFRSs but permitted due to industry standards
a violation of PFRSs
0 / 1 pts
Question 29
In assessing whether the going concern assumption is appropriate,

management takes into account all available information about the future,
which is at least, but is not limited to,
at least 5 years from the end of the reporting period.
ou Answered 3 to 5 years from the end of the reporting period.
orrect Answer 12 months from the end of the reporting period.
12 months to 3 years from the end of the reporting period.

Question 30
When the accrual basis of accounting is used, an entity recognizes items

as assets, liabilities, equity, income and expenses (the elements of
financial statements)
as cash is received and as cash is paid
ou Answered as cash is earned and as cash is incurred
when they provide relevant information to expected users
orrect Answer
when they satisfy the definitions and recognition criteria for those elements
in the Conceptual Framework and in the PFRSs.
1 / 1 pts
Question 31
Under PAS 1, an entity shall present a complete set of financial

statements
at least every three years when there are limited users.
at least annually, with or without comparative information
on as-needed basis, with or without comparative information
Correct! including comparative information at least annually.
1 / 1 pts
Question 32
Which of the following statements is incorrect regarding offsetting of

assets and liabilities in the statement of financial position?
Correct!
Assets and liabilities in the statement of financial position may be offset in
general.
Financial assets and financial liabilities shall be offset if the entity has both
the legal right of offset and the intention of settling the asset and liabilities
at a net basis.
An entity shall not offset assets and liabilities or income and expenses,
unless required or permitted by a PFRS.
Offsetting does not give rise to gain or loss recognition, which distinguishes
it from the derecognition of an instrument

Question 33
Which of the following financial statements is concerned with the entity at

a point in time?
Statement of changes in financial position
ou Answered Income statement
Cash flow statement
orrect Answer Balance sheet

Question 34
The statement of financial position may be presented
I. based on current and noncurrent classification
II. based on liquidity
III. mixture of current and noncurrent and liquidity
I, II
Correct! I, II, III
II

Question 35
An asset shall be classified as current when it satisfies any of the

following criteria, except
it is expected to be realized in, or is intended for sale or consumption in,

the entity’s normal operating cycle
it is held primarily for the purpose of being traded
it is expected to be realized within twelve months after the balance sheet

date
Correct! it is cash or a cash equivalent that is restricted

Question 36
. A liability shall be classified as current when it satisfies any of the

following criteria, except
it is expected to be settled in the entity’s normal operating cycle
it is held primarily for the purpose of being traded
it is due to be settled within twelve months after the balance sheet date
Correct!
the entity has an unconditional right to defer settlement of the liability for at
least twelve months after the balance sheet date.

Question 37
Which of the following item is not an element of working capital?
temporary investments
ou Answered good-in process
orrect Answer treasury stock
cash in bank
1 / 1 pts
Question 38
In which section of the statement of financial position should employment

taxes that are due for settlement in 15 months' time be presented,
according to PAS1 Presentation of Financial Statements?
Non-current assets
Non-current liabilities
Current assets
Correct! Current liabilities

Question 39
Which of the following accounts would not be classified under current

assets on the balance sheet?
Supplies
90-day Note Receivable
Prepaid Insurance
Correct! 2-year Note Receivable

Question 40
A corporation paid a six year insurance premium on January 1, Year 1 ,for

P12,000. It recorded the prepayment in two asset accounts –one with a
P2,000 debit balance and one with a P10,000 debit balance. Under which
of the following captions should the account with the P10,000 balance be
classified on a balance sheet dated January, Year 1?
Operational assets
Correct! Deferred charges
Other assets
Current assets

Question 41
The cost of a depreciable long-lived asset is expensed
when it is paid for.
Correct! as the asset benefits the company.
in the period in which it is acquired.
in the period in which it is disposed of.

Question 42
Amortization is the process of
valuing an asset at its fair value.
increasing the value of an asset over its useful life in a rational and
systematic manner.
Correct!
allocating the cost of an asset to expense over its useful life in a rational
and systematic manner.
writing down an asset to its fair value each reporting period.

Question 43
The statement of changes in equity may prominently display all of the

following, except
Effect of changes in accounting policies
Correction of prior period errors
Dividends to owners
Correct! Components of comprehensive income for the period

Question 44
The statement of changes in equity is prepared
as needed
as an integral part of the financial statements and as a supporting

document for the income statement
Correct!
as an integral part of the financial statements and as a supporting
document for the statement of financial position
as a supporting document for the financial statements but not an integral

part thereof
1 / 1 pts
Question 45
All of the following correctly relate to the notes, except
provide information that is not presented elsewhere in the financial

statements, but is relevant to an understanding of any of them.
Correct!
present the breakdown of aggregated items on the face of the statement
and to rectify any inappropriate accounting policies.
disclose the information required by PFRSs that is not presented

elsewhere in the financial statements
present information about the basis of preparation of the financial

statements and the specific accounting policies used

Question 46
An entity shall disclose all of the following in the notes, except
the amount of dividends proposed or declared before the financial

statements were authorized for issue but not recognized as a distribution to
owners during the period, and the related amount per share
ou Answered the amount of any cumulative preference dividends not recognized.
orrect Answer the domicile and legal form of the entity and a list of its incorporators.
the name of the parent and the ultimate parent of the group.
1 / 1 pts
Question 47
Which of the following is an acceptable method of reporting other

comprehensive income and its components?
In the notes only.
Correct! In a statement of profit or loss and other comprehensive income.
All of these
In a statement of changes in equity
1 / 1 pts
Question 48
According to PAS1 Presentation of financial statements, which TWO of

the following must be included in an entity's statement of financial
position?
Share capital and reserves analyzed by class
Property, plant and equipment analyzed by class
Deferred tax
Correct! Cash and cash equivalents

Question 49
Which information is normally not included in the “notes to financial

statements”?
A statement of compliance with GAAP
A statement of measurement basis for the financial statements and

accounting policies applied
Supporting information for line items presented and aggregated
Correct! A Statement of cash flows

Question 50
Which of the following statements about financial statements is incorrect?
They show the results of the stewardship of management of the resources

entrusted to it by the capital providers
Correct! They are the primary responsibility of the external auditor after audit
They are prepared at least annually and are directed to the common
information needs of a wide range of statement users
They provide information about the financial position, performance and

cash flows of an enterprise that is useful to a wide range of users in
making economic decisions
Quiz Score: 39 out of 50

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12/14/23, 6:21 PM SANTISAS, GERALD's Quiz History: MIDTERM QUIZ 1

MIDTERM QUIZ 1 Results for SANTISAS, GERALD

Original Score: 0 / 1 pts Regraded Score: 1 / 1 pts

 This question has been regraded.

All of the following are events considered as exchange or reciprocal

purchase of investment in equity securities

sale of equipment for non-interest bearing note

Correct! subscription on the entity’s own equity instrument

exchange of a note payable for an account payable

borrowing of money from a bank

Original Score: 0 / 1 pts Regraded Score: 1 / 1 pts

 This question has been regraded.

Which of the following correctly relates to accountable events?

I. An obsolete asset which has no use was received in exchange of an

existing asset. This transaction may be classified as an exchange.

II. An entity exchanges a non-cash asset for another non-cash asset in an

exchange transaction with commercial substance. This is a reciprocal

Original Score: 0 / 1 pts Regraded Score: 0 / 1 pts

 This question has been regraded.

The primary objective of financial reporting is to provide information:

About a firm's financing and investing activities

ou Answered About a firm's economic resources and obligations

About a firm's products and services

orrect Answer Useful in predicting cash flows

Original Score: 0 / 1 pts Regraded Score: 1 / 1 pts

 This question has been regraded.

Mr. Van owns a butcher shop, a restaurant, and a catering business.

financial statements are prepared for each business independent of the

businesses. What accounting principle or assumption is being applied in

Time period assumption

Correct! Separate entity assumption

Original Score: 0 / 1 pts Regraded Score: 0 / 1 pts

 This question has been regraded.

Which of the following statements best reflects the accounting assumption

III. Technically, an accounting year is synonymous with an accounting

IV. Accounting periods are usually equal in length.

Original Score: 0 / 1 pts Regraded Score: 0 / 1 pts

 This question has been regraded.

An entity uses calendar year as its accounting period. The statement of

December 31, 20x1 to December 31, 20x2

January 1, 20x1 to December 31, 20x2

ou Answered January 1, 20x2 to December 31, 20x2

orrect Answer From business’ inception up to December 31, 20x2

General-purpose financial statements are the products of

neither financial nor managerial accounting

Correct! financial accounting

both financial and managerial accounting.

Correct! R.A. No. 9298

R.A. No. 8299

R.A. No. 9892

Original Score: 0 / 1 pts Regraded Score: 1 / 1 pts

 This question has been regraded.

The Board of Accountancy (BOA) shall be composed of

chairman and fifteen (15) members

chairman and seventeen (17) members

In the absence of a GAAP addressing a particular transaction

The entity should refer to the Conceptual Framework.

The entity should refer to its External Auditor.

Original Score: 0 / 1 pts Regraded Score: 1 / 1 pts

 This question has been regraded.

The following comments all relate to the recording process. Which of

The general ledger is a chronological record of transactions.

Transposition is the transfer of information from the general journal to the

Original Score: 0 / 1 pts Regraded Score: 1 / 1 pts