DEPARTMENT OF ACCOUNTANCY, BUSINESS LAW & TA (OMPREHENSIVE EXAMINATION REVIEW IN FUNDAMENTAL: ACCOUNTING 3 = score: i PART 1 INSTRUCTIONS": me es You are given 30 mltiplechoiee questions which you are to arewer By letter choice on the space provided. You are only allowed to shade. 0 black ball point pew only. Erasures 2. Place all your belongings in front of the class.’ You mus following: clean worksheet(s), ball pen, porket calculator and thé 3. Turn off your cell phones white taking the examination. Ceit phones are mat to he used as ealeulators. Vou ace 20 place youi cell phones iaslde your’ to be placed in fronit of the class together with your other belougings: 4. Going to the comfort room during the examination session is aot have (o go to the comfort room before taking the exam. TIONS, Users of Fanci reports include al of te following except 2. enti, . bh governmem apenies {J none of the above, i..all of these israport on conomic entities rather than on industries ur members of socity a consuthes indore, rainer thin on seanomieenfis or members of society as consumer ©. geonomie entities and’ industrics, rather than on members of society as consurh «&_esonovniz entities, members of society as consumers, and indus, Wich of the following statements igor gPobjcctive of financial reporting? {Provide information on the liguiation value of an enti 5. Provide fnfurmation about em enfity’s resources, eli thet, ‘© vie information that is usefil in investment and credit decisions “1 rovide tration that i sefl in esessng eash flaw prospect, Underlying the objective of providing information for uses isthe notion that {users have no specialized accounting knowledge, 1 users have n vary base, ntodvctory knowledge of accounting, users have reasonable proficiency in accounting «i users have the expertise oF qualified accountant od The overriding esterion by sshich accounting infonnation can be judged is tat © tsefuines Tor decision making. by freed ©. timeliness > compart. The quality of information that gives assurance thai is reasoneb fre of eroe faithful zepresctation is a. relevance : O sctiabiny. ©. verifably @. newcalty. EG Who are the principal quaiatve characterises of ufo accouninsinvorma the Frameveurk? @ Understandabitity, relevance, reliability and comparability +, Understandabiliy,relevence, reliability and completeness €. Relevance and reliability Relevance, elisbilty, comparability and timelines Comparability of finensal reporting is achtved if = 4 the Finan cepors aatyia 16, 5000 Bow) o00b taisooe 2 Pied oaee oes “ge ho e000 (deoe®) “a sao ve the financial reports of the samme enity can be compared overtime, @ bout (ay and (by. AL. either (a) or (b) is achieved, ‘iuuneia! informa exhibits ths characierste of gomparability when {expenses are reported as chorges against revenue in the period i which th Coites apply consistent necounting treatment from perind to perind. ‘comparative figutes for the previous accounting period are cisclosed. useful for anlyng al ofthe following except. figs , soletiey 8 prota 4 financial Newibily TIncHeC ASSO a businss are equa e- é a. Garentasets mina eure iis, -b. “total asses pls total bili teal assets minus ei © none ofthese. he reno fon of pregenting a balance Set Lists liabilities ond equity dicetly below assets, b. tists assots and liabilities on the left and equity of the right. ¢ isis assets onthe left and Tables and equity on the ight <1 Sits ities amd equity onthe lef and assets onthe ih. "sash How satemeat provides infosaton useful for evaluating the en's abil 1 generate fat cash flows Ajay dividends and meet financial obligations 1M_generate long tern protiabiie i IW inanee changes inthe nature and scope of stiviés & Athamand i o. ly illand WV © Wand 2G wilandiy Which of the following sarah objective of cash Nowistatcment? to ois fran ian ht fy ta flows: aif & a Uo provide information to enable assessment of. ‘mci fanaa Bligations S pena inion oblast by. othe orofiabliy to provide information to enable ‘assessment se ability of ‘he ‘he nature and scope af atv» Which of the following statements provides maton ‘about how tit Dr epi rig th prio? 2 nsome stalement © ta Now sinter © balance he 4 sttementoehangs inequity : "he folowing dels have buen trac ro the balance set and ioe Balance Sheet, Aesounis recelvabs Less allowance for dutiful debts Icon Stat Sales venue ‘ud debts of P5000 were writen of aginst the ullowande during 2009... How much ees was collected fom customers in 2009? a P375,000 5.385.000 © Pst0.000 Using the flowing extracts fom the Fara saimens of Cason Lid al For expenses duning 2009: is Prepaid expenses 5.000 \Qperating expenses 390,000 3) 155,000 b. P390,000 fe. PATS.000)A» bon 0 2 4 & 33. = ox 0 9* 26, cas pi fr expenacs during 2099 Prepaid expenses ; operating expenses 3,000 @ P2900 . P3,000 ic econition prineipl. provides that revenue is recognized when! he measrel lab its probable that Caureeconomie benefits wil flow to he ey iar (a) orb) ksi oth (ap and (by are satistie. Reve fom the gl of products is recomnzad when swtlan rks and rewards of evne ship are transfer he bayer, the eastomer is invoice. cash elected {wh eh fs ollested unless he estome bas pain advare. leven rom the provslon serves eeognaed when 4. the costomer fas been invoiced Ih the sic ins hoon povided in ful © it cam be estimated retiably by reference to swge af completion. “ithe wstomer hes pad ‘Which of the fllowing ig@DEonsdered cash for fnanial reporting purposes? a. Paty cash finds and eh ine ash else drawers ~ : 1.” Money orders, bank checks and personal checks & Coin, soroney. and avaiable Fonds G_ Povtated checks and 1OU's ‘Whiah ofthe following isconsieted cash? 1 Coins cueny and essary notes Money market certfiates of deposit ‘avdladvanges to cmplovess shouldbe reported as a wages. ' ease hecnuse they represent the uivent of mon ‘receivables Tin eatery “ade receivable" noes a. advances to officers and emplayces. Bb. income tax refunds rcrivabie luis agin! insane com ies for cases ssid @_ none oF thew Which of the following sould be resoréed in Trade Receivables? ac Reezivables from aiiaers i custo long-tm cotras 32 Dividends reosivable Nove of hese s ‘tthe cose ofits first year of operation. 30 June 2009, LUALHAT: ‘eocivahle of P440,000, after deducting the related allowance for doubt Sompony had changes ta bad debt expense of P90,000.and wrote off, ceoabe of 4,00, What fe compan sepor on fe leno accounts eecvable bore the allowance for doubt aedounts? 4 PS70,000 2 (B-Ps90,000;-,, «390,000 2009 recivables ure expected to be uncolletable. ‘The’ carying anount the lance shots 30 Jone 2009 shoud he a paw2.so0.* (Psa 500 ¢. Pi92,s00am Coss) {ithe mouth-epd bunk ‘siatement shows « bala of P31,000, ouistandig lepest of Pa FO a check for P500"was the bank in reratng the bank reericiliaton forthe month of Apel 2009, the accounts ‘he Following informatie, Balance per bank statement, 304/09 NSF (dishonored) checs recumed 26/4/09 Deposits in transit. 30/4.6 ‘ Outstanding (unpresented) checks, 30/4/09 - " Bank charges for April ‘. hut should be the comect balance of eash at bank at 30) ‘April 30 2069; A P3440 bo Pterg ©. P33,500, : Which ofthe following items snuid be inched inn cmmpany Goods in transit that were purchased Fo.b. destination 2 Gants eccived from anothe- company for sle on consignment, SE © Goals owned by'a custome: thal arc being held forthe safer) tel’ oe @) None ofthese Which the tttowing i conte 2 Selling cons are pret co Manufacture oerhend ess oe pst cons 6 Interest costs for routine invent are product costs, “Altos these ; IT perpetual iventry ayy sed : 4. avery purses ae red ia she purchases acco fervent acount notated hy feet of ery ul ‘both purchases and the cost of ir ‘ventory sold are recorded in the inventory “1 Gx ata etemine by ang parses to opeang ea de {se the flowing information far questions 34 and 3: ee "he Flowing information wes aaa Peg et esd LN¢ COMPANY Units ‘Unit Cost Balance ot | Jannary 3.000) P97, Purchase 6 January 2.000" 130 27 Janay 2,700 1031 Soles Tamary (2.300) 31 Janay (4200) Balance a'31 Janary 4. Asuming that LAM des fo) nalnan er 3! Januar. wsing the weghted-aeraee a. PHOS 6 Prog 2S Aevuning tt Lor minnesota invent code, ‘ory wing the novingsvenageinvaians sae a PLOSOS: ‘b. PI0.237 &. P10.260 +d. P13 © 26 CARMINA Hote! recut purchased MARIE. Hot sod he ion tists Kiara conn th MARTEL oe and bulla ow iy tee ee MARIEL Hote shold be i sve e 8. deprecated over the perk brite fT agains retained earings Q sitalized os part ofthe cos ofthe end capitalize as par ofthe cont of thse hte, 37. “The eos of land does nov include i cons of grading ling, draining pnd clearing. costs of removing old buildings as6 ve e e © sts oF improveniens wih limited lives “{ special assessments, " 4 (C38. The cost of and typically ineludes the purchase price and all of the Following gosisé 3. grading filling, draibing and clearing cots. sewers, and draiage systems cost © private driveways and parking tots assumption of any ica or mengages onthe property. {Ube the following information for questions 39 and 40, a PEREZ COMPANY purchased tant as a factory site for P500,000. FREY, pai 0, {wo bailing on the land. Residual was soll far(P2,7009 Stamp diy costs were FSZOE ad ee paid fo tte investiga 6 purchase Architects Teele 2 insurance during costco cost P2500, Exeavatin cots Were P3220, The Paid P1200.000, Interest costs during constriction were PAS.OQ). ‘The cost ofthe land ihat should be recondeg by PEREZ COMPANY is 2 P520,240, “b. 'P523,440, c. P520,006: D. 40, 1h sost othe ding that shoud be norte by PEREZ COMPANY! 2. PL306.900, b. PL307.220, ©. PIL 600, Do 41. The cost of an intangibte asset includes atl of the following except a purchase pric. leg fees. 6. other inden expeses. Allo thes we cle 2 “Factors conde in detent an itnyible assets wl ie include excepe ; : ae a. the expected use ofthe asset, : ‘ any opal or comtacua! provisions tat may limi he use &. any provisions for renwal or extension af the aset's egal the amortization method used pas sit usta imams at ease wl last forever, @ ther is 9 foreseeable limi to the asset's ef ie me: Res wef fs determined y hepsi of remaining tga igi, 4. benelts rom using the asst vary each sear : oe 4d, of the following is a gue: ut Jighi ity? pee 2 hon do ating cae it eect a dale & Ailonertorm debt maturing curently whieh is tobe converted inio ordinary a ‘None of these s is to be retired with proceeds 6. 45. Which tthe oovng is De beat the scant on shorten na payabi i hE Discount ot NotesTyable account hase debit balance," the iscount oh Notes Peyabe neu shouldbe epoed a anasto the © When theres a discount on a vate payable, the effective interest rate ix higher | Alivcourt eae, : 4. Allof these ane er, 46, wamortized premium on bonds payable (18,900 2: f ‘The bonds were issuéd va 31 December 2007, a ith interest payable 6 Lecemba of each year. On 4 Sanary 2008, PFI rated P280 000 nes SHoUL! Fis reord aya gain on retirement of these bonds? Ignore tance a. P5600 P1S60 © PI3i60ar te ar op on 1 nds payable’of OLIVER COMPANY had a ete ° venom 2008. The bonds. shih had a. tee value 2) Interest was paid on January 3nd [July of Gach year. On 2 uly 2064, bore tar maturity, OLIVER retired the bonds at 102, The interest payment on Tul Inale ws scheduled, Wha is the loss that OLIVER should record ow the early ree fonds in 2 July 20092 roe exes & a P1600 _B P5n.a00 e. i © 48. Theses interest ina company Belongs to the 3. management, i ereiors © oninary shareholders 4. preference shareholders B49 “Avevdinay shared as ne peamptive rit to ashe proportonaely in compary assets upon liquidation, ® stare proportionately in any new ssn of shares ofthe same cle, ; rexeive cash dividends before the oe uistibued to preference AL exelude preference sharers om voting rights. i A-50,_‘Thep-emplive ht eneblos a aharholde ie i @ share proportionately in ny new sss of share ofthe sane cas. 1 resiveeishcividnds blo oer clase of snes without he pre-emptive igh Sea sell shares back fo the company atthe option ofthe shareholder. Se { Sinner ee C51, Yona equity represents * 3 chim to specie assets contributed by the owners. 8. the maxtaum amount that can be borrowed bythe cleric. © 4 claim against a proportion of the total assets of an enterprise ‘T only the amount of earnings that have been retained in the business, D 52 primary suse of cay 1 ete ena by thesompa 2. appropri ane args &. conttton by sashes @ both income reined by to company and contributions by Shareholders, 5% rset sow iste ey Section of ROBY COMPANY a3 Debi 25 Ordinary shures, issue price P20, 45,000 shares issued : " eserves 00 aie Retained earings 34000 ‘ . sii wing 2007, the Fling emesis occured eligi eis 2 "300007, 000 shares juired at P28 pershare S909 - eroot) 2.000 shares were reabauired ut P3S pe share m= 1-200 shares of uray shares were tld at P30 pr share A000 4 a ROMY wecounts fr eabury ches eee eet meh ‘Shoal it its31 ecombe 207 blast 8. P2,010,000 ” -"b, P2,007,600 . P2,084,000 D SH. On | December 2007, JOYCE COMPANY exchanged 10,600 ordinary sh & used machine, The treasury shares were acquted by JOYCE AEM 40000, accounted for-under heat aetna ‘On the date of the exct eg Vilas of B55 po shire (the shares were orgy eued at Yo exchange TOVCE'S total equity will increase & ‘ oa GY Rito arrays 156.0007 55. YOISA COMPANY owned _300,000_of JANNEN COMPANY Marley. Lith 8 December 2007, wien YOISA'S account Investment @ had a camying value of Ly Cividend™ YOISA riginaly raid P& for each share, JANNEN tee hod Ke # "Le fhtional shares exchange, The used mit pe sss PZ. the declaration date an §8on he dstebton date What would be the redvttn VOSA ety a «rept of the above ta a piz0n.9m0 'b. PI0000). e, P200.000 Count your bestings Welk an extra mite ish feu GOD'S quiance 16g mandino