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Bustarga Score_______

1. Which statement is/are FALSE? Statement I: the framework is not a Philippine Financial Reporting Standard (PFRS) Statement II: In case of conflict between framework and a PFRS, PFRS prevails a. I only b. II only c. Both I and II d. Neither I nor II 2. Individuals interested about the continuance of an entity a. Lenders b. Employees c. Suppliers and other trade creditors d. Customers 3. Which statement is/are TRUE? Statement I: Historical cost is equal to acquisition cost Statement II: Current cost is equal to fair market value Statement III: Present value is equal to discounted value using an imputed interest rate a. I and III b. II and III c. I and II d. I, II and III 4. Which of these are subject to reversal? I. Accruals II. Prepaid expense using asset method III. Unearned income using liability method a. I only b. I and II c. II and III d. I, II and III 5. Cost formulas used on items that are ordinarily interchangeable is/are a. Specific identification method b. FIFO c. FIFO and Weighted Average Method d. Weighted Average Method 6. The cost of purchase of inventory does not include a. Purchase price b. Import duties and taxes c. Freight, handling and other cost directly attributable to acquisition d. Trade discount, rebate and other similar item 7. This means correcting the recognition, measurement and disclosure of amounts of elements of the financial statements as if a prior period error had never occurred. a. Retrospective application b. Retrospective restatement c. Prospective application d. Prior period adjustment 8. Dividends proposed or declared after the reporting period a. Should not be recognized as liability at the end of the reporting period 1

b. Classified as a non-adjusting event, requiring disclosure c. Both a and b d. Neither a nor b 9. Which statement is/are TRUE? Statement I: Permanent differences are revenues and expenses that are recognized in determining accounting profit but do not have tax consequences. Statement II: Deferred tax assets and liabilities should be discounted a. I only b. II only c. Both I and II d. Neither I nor II 10. Excluded from the cost of Property, Plant and Equipment is/are? I. Administration and general overheads II. Abnormal costs III. Cost incurred before the asset is ready for use a. I and II b. I and III c. II and III d. I, II and III 11. The following are part of the land account, except a. Cost of survey b. Mortgages assumed by the buyer in connection with the purchase c. Brokers commission d. Unpaid taxes after the date of acquisition 12. The following expenditures are part of the building account, except a. Construction permit b. Cost of sidewalk that is part of the blueprint for construction c. Temporary houses for construction offices d. Post insurance cost 13. What is the approach prescribed by PFRS 8 in identifying an operating segment a. Matrix approach b. Geographical segment approach c. Management approach d. Risks and Rewards approach 14. Which of the following statements is not true? a. A sales journal normally would have a cash debit column b. A sales journal generally records credit sales only c. Posting from the sales journal to the accounts receivable subsidiary ledger should occur frequently d. Each entry in the sales journal records the same information found in the traditional debit-credit format. 15. Generally, recognition criteria are met and revenues are recognized a. At the point of sale b. When cause and effect are associated c. At the point of cash collection d. At appropriate points throughout the operating cycle 16. A company providing maintenance services on equipment for a fixed periodic fee would a. Recognize an equal amount of service revenue for each act b. Recognize service revenue over the fixed period by the straight-line method c. Recognize service revenue in proportion to the direct costs to the provider of the services to perform each act 2

d. Recognize service revenue only when the fixed period has ended. 17. Which of the following can be considered as retrospective restatement? a. From FIFO to weighted average inventory method b. From cost model to fair value model c. Change in percentage used for warranty obligations d. Understatement in depreciation in the previous period that was corrected in the current period 18. If an entity, using direct write-off method, recovers a previously written-off account in a subsequent period, the entries may include a credit to a. Allowance for bad debts b. Retained earnings c. Miscellaneous income d. Cash 19. When special journals are used, recovery of previously written-off accounts will be recorded in a. Cash receipts journal b. Sales journal c. Cash receipts journal and general journal d. Cash disbursements journal 20. Which of the following type of accounts measure economic flows over a period of time? a. Permanent accounts b. Temporary accounts c. Contra accounts d. Adjunct accounts 21. When special journals are used for a merchandising company, recognizing accrued interest income is recorded in the a. Sales journal b. Cash receipts journal c. Cash disbursement journal d. General journal 22. Which of the following is an adjunct account? a. Allowance for sales discount b. Accumulated depreciation c. Allowance for impairment loss d. Freight in 23. Objective evidence of impairment of loan includes all of the following , except a. Breach of contract b. Insignificant financial difficulty of the issuer c. Debt restructuring d. Borrower is entering bankruptcy 24. The account Notes Receivable Discounted is measured at the a. Net proceeds from discounting the note b. Maturity value of the note c. Face amount of the note d. Carrying amount of the note 25. The following might be considered in determining an intangible assets useful life, except a. Product life cycle for the asset b. Whether the intangible asset is purchased or internally generated c. Legal limits on the use of the asset d. Period of control over the asset 26. These are the main categories of employee benefits, except 3

a. Short-term employee benefits b. Pre-employment benefits c. Termination benefits d. Other long-term benefits 27. Interim financial report means a financial report containing I. A complete set of financial statements II. A set of condensed financial statements a. I only b. II only c. Both I and II d. Neither I nor II 28. Even if there is no indication of impairment an entity shall test for impairment: I. An intangible asset with an indefinite useful life II. An intangible asset not yet available for use III. A CGU to which goodwill has been allocated a. I and II b. II and III c. I and III d. I, II and III 29. Examples of provisions are the following, except a. Sale or termination of a line of business b. Closure if business locations in a country or region c. Relocation of business activities d. Provision for product and service warranties 30. Which statement is/are FALSE Statement I: if an entity cannot distinguish the research phase from the development phase, costs are expensed as incurred. Statement II: an in-process research and development project acquired in a business combination is recognized as an asset, if it meets the definition of an asset and its fair value can be measured reliably. a. I only b. II only c. Both are true d. Both are false 31. All of the following are examples of investment property, except a. Land held for long-term capital appreciation b. Constructed for third party Construction in progress c. Property under development or construction to be held to earn rentals d. Investment property being redeveloped for continued use as investment property 32. If the discounting of note is with recourse treated as a conditional sale, the entry to record the discounting may include a credit to a. Interest expense b. Notes receivable c. Interest income d. Cash 33. Which statement concerning inventory estimation is/are TRUE? Statement I: purchase discount is deducted from purchases at retail only Statement II: abnormal shortage is deducted from goods available for sale at cost only a. I only b. II only c. Both I and II 4

d. Neither I nor II 34. Which statement is/are FALSE? Statement I: normally, compensating balance is not legally restricted Statement II: there is a bank overdraft when the cash balance per ledger is negative a. I only b. II only c. Both I and II d. Neither I nor II 35. Which of the following statements concerning the objective of financial reporting is correct? a. The objective are intended to be specific in nature b. The objectives are directed primarily toward the needs of internal users of accounting information c. The objectives were the end result of the FASBs conceptual framework project d. The objectives encompass not only financial statement disclosures, but other information as well 36. Which one of the following statements is incorrect? a. The accounting function should be separated from the custodianship of a companys assets b. Certain clerical personnel in a company should be rotated among various jobs c. The responsibility of receiving merchandise and paying for it usually should be given to one person. d. A companys personnel should be given well defined responsibilities 37. Noncurrent asset classified as held for sale shall be presented in the statement of financial position as a. Current asset b. Other current asset c. Noncurrent investment\ d. Fixed asset 38. Under the cash basis of accounting a. Revenues are recorded when they are earned b. Accounts receivable would appear on the balance sheet c. Depreciation of assets having and economic life of more than one year is recognized d. The matching principle is ignored 39. A conceptual framework of accounting should a. Lead to uniformity of financial statements among companies within the same industry b. Eliminate alternative accounting principles and methods c. Guide the AICPA in developing generally accepted auditing standards d. Define the basic objectives, terms and concepts of accounting 40. Proper application of accounting principles is most dependent upon the a. Existence of specific guidelines b. Oversight of regulatory bodies c. External audit function d. Professional judgment of the accountant 41. Which if the following would not be considered an element of working capital? a. Time deposit b. Organization costs c. Accrued interest on notes payable d. Work in process inventories 5

42. PAS 34 encourages publicly traded entities to provide interim financial reports a. At least at the end of the half year and within 60 days of the end of the interim period b. Within a month of the half year-end c. On a quarterly basis d. Whenever the entity wishes 43. An entity shall measure a noncurrent asset or disposal group as held for sale at a. Carrying amount b. Fair value less cost to sell c. Carrying amount or fair value less cost to sell whichever is higher d. Carrying amount or fair value less cost to sell whichever is lower 44. Barney Companys current ratio is 2:1. Which if the following transactions would normally increase Barneys current ratio? a. Purchasing inventory on account b. Borrowing money by signing a long-term note c. Collecting an accounts receivable d. Purchasing land for cash 45. What accounting concept justifies the use of accruals and deferrals a. Going concern assumption b. Corporate form of organization c. Consistency characteristic d. Arms length transactions 46. A trial balance is useful because it indicates that a. Owners equity is correct b. Net income is correct c. All entries were made correctly d. Total debits equal total credits 47. An entity shall disclose for each reportable segment all of the following specified amounts included in the measure of profit or loss, except a. Revenue from external customers b. Revenue from transactions with other operating segments of the same entity c. Distribution costs d. Interest revenue and interest expense shown separately 48. The principal qualitative characteristics f accounting information are a. Relevance and reliability b. Consistency and comparability c. Understandability and comparability d. Relevance, reliability, comparability and understandability 49. The responsibility of the Emerging Issues Task Force (EITF) is to a. Issue statements which reflect a consensus of the EITF on how to account for new financial reporting issues where guidance is needed quickly b. Do research on financial reporting issues that are being addressed by the AICPA c. Respond to groups lobbying the FASB on issues that affect a particular industry d. Develop concept statements the AICPA can use as a frame of reference to solve future problems 50. The device by which a corporation transfers a part of its assets to a new entity in exchange for shares of the new entity, after which the corporation distributes such shares to its shareholders without any surrender of any shares is known as a. Spin off b. Split up c. Split off 6

d. Split on

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