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(Freory Accounts: Assets Commodities I N-'Rentory Discouni: Gross Gross
(Freory Accounts: Assets Commodities I N-'Rentory Discouni: Gross Gross
{freory of Accounts
INSIBlfgIlgNS: Select the correct answer for each of the following
questions. Mark only one answer for each item by shading the box
corresponding to the letter of your choice on the answer sheet provided.
STF.ICTLY NO ERASURES ALLOWED. Use pencil no. 2 only.
SEt B
$zo' "lf an entity pubJi"sires a: clirr1;,e.:1.,.. ;tei- c,f- ijnar,t-:i-,.r.i :::r,_,:ti-:.:l1iifLi,s i.ir iLs
j.Liierim f inancial reportT t-ht: i i.,'rn rr.r-l rji-.ril,.: rrt. sili,ii l- ccr:f oi:rn to the
; r I ii rernertS of
., IT 1. (Presentation of Financial Statements)F"r.q 0F pffS34 *compl&C se1
h. PAS 34 (Interim Financial Reporting)
r. PFRS 3 (Business Combinations)
,r. Conceptual Framework of 2010
trO. Tlie entit.y solcl appliances wi-th 2-year warranty during the current
pe-:i.od and recognized the related vrarranty expense and Iiability.
T:'is t.ransaction is an example of expense recognition based cn
.i. Immediate recognition
Q) Cause and effect association
:'" Systematic and rational al-l-ocation
,l. None of the choices
(..
Yl -i Frr a non-current-misfTe
asset to be classif ied as "helci for sale" under
IIFRS Il, th T available for immediafe sale 'in its present
r:ondi i i cn and the Eale_ mug!_be.
;i. Probable
l'S rliohly probable
c. Hiqhly possible
.l . Reasonably Possible
lZ - The cos*L of inventor:ies that ai e ili '. iri-e r chal..q,.:.ii:,i.r: an,J segreqateC
1
for specific pr"ojecLs, regardlr::: s r,rf v,'i; L ne ]: ire )' have been bought or
r.r 1.,
r'JD.
B.:sed on the Conceptual Eramework of Accounting, which of the
following arises in the course of the ordinqry regular activities of
an entity and is referred to by a variety of different names
including sales, interest, dividends and royalties?
a- Gain
b. Profit
q, Revenue
d. fncome
il ^-
AI \trI'20.According to PAS 10, events after the balance sheet date are
' /'\ Statement I: Those events that. provide evidence of condi-tions that
existed at the balance sheet date Vl
State.ment II: Those events that are indicative of condi-tions 'that
arose after the balance sheet date.
A Both statements are true
\/
X Only statement I is true
c. Only statement II is true
d. Both statements are faLse
f1. Which of the following is a characteristic (s) of going concern
_ underlying assumption?
X St, tement f: Management intends to liquidate the entity
$tatenent II: The entity recognized accruals and deferrals in its
- -financial statements
'{: Statement III: Management has no real-istic alternpLive but to cease
the entity's operations
a9 Statement II only
b. Statement fII only
c. Statements I and IIf
d. St.atements 1, II and IIT
lZ,FOn destination point and freight prepaid means
a. The sel1er actually paid the freight charges but is not
responsible for the same
b. The buyer actually paid the freight charges but is not
^ responsible for the same
@
,V
The sel-ler actually paid for t.he f reight charges and is.
responsible for the same
d. The buyer actually pai-d fcr the freight charges and is
responsible for the same
#*11 rHEoRy oF ACCouNrs
k$?i
\arl
First Pre-Board Examination (October 2012 Batch)
21 Juty 2At2 . B:00 AM to 9:30 AM Deaa d.
a" entity sha1l disclose on the face of the income statement t.he
?8-
- a Prof it or loss of discorrti.nued operati ons, and fqr b PresS
,'Gain or ross::ecognizecl on the measurement to fair value 1es s
costs to sel l or on the disposa] of the assets o' disposal qroup
constitul_ing the discontinuecl operation.
. As a single amount (based on the Lot_a1), net of tax
As a sing_le amount (basecl on Lhe total-), gross of tax
As separate amountsr nt, of tax
d. As separate amounts, qross of tax
/ad. wi'ti.t"t event after the balance shee t- date will_ require an entity to
ad ri-rs c the amounts"recognized in its f inanc:Lal- statement?
.;=\ The
receipt
\__,' i.ndicating
of information aft-er the balance sheet date
that an asset was impaired at the balance sheet_
ilat-e
b Major ordinary share transactions and po[ential ordinary share
transacLions af ter the bal.ance sheet clate
(: Commencing major litigation arising soJ-ely out of events 1-hat
occurred after the balance sheet date
C] Declaration of divi_dends to holclers of equity instruments
after the balance sheet date
=$r" i6 staterrent r: An entity shal1 disclose the profit or loss for the
J\ pe:ricrci and the, total cc,mprehensive i ncome attrrbutable to non-
,lirltroiling interests and owners of Lhe parent
l)tatement ri: An entity shali presenr all items of income and expense
r6l(-:ognized in a period in a single profit or l_oss statement . only
a. Both statements are true
\., ) On Ly statement I is true
,:i. Cnly statement II is true
ri. Bot.h staternents ai:e fafse
-ft:, I'he ef fect of closing entries is to
tl . Change assets
.ji., Change liabilities
\,) Change retained carnings
i". Change debit balances of all accounts into credit and vice
versa
rt/ -^--
/^\ l8 j-nvested
SlaLement r: The financjal- capilal concepL, such as invested money or
purchasing power, requires the adopt:-on of the current cost
b;rsis measurement
:j|atement rr: under a physical capital concept., such as operati-ng
r:ai;abi1ity, capital is regarded as the productive capacity of th;
e,:Ll_ i ty
.l . Both st.atement-s are true
ir. Only statemenL f is true
r. Only statement ff rs t.rue
ir:) Both statements are false
\----l'
)4. wl',icli of the following losses shouid not be taken Lo. prof it or loss?
Unrealized loss on [he change in value of AFS securities
unreal-ized loss on inltial recogni tion of bioJ-ogical asset
!- Loss on conversj-on of investmenL properties tr: inventories
rl unrea]-ized loss on the change in value of tradinq securiLies
D
'J/
*]r2,, 'i'he following statement-s rel-ate
t'o j-nventories under pAS 2:
sfriement r: The car:rying amount of sold inventories shalI be
recognj-zed as expense in the period in which the related revenue js
recogni zed.
lit-atenent rr: The amount. of any write-down of inventories to nel
::eali zabi,e value and al l l-osse s of inventories shall be recogni zed as
ai:r expense in t.he period the wr:ite-down or 10ss occurs.
statement rrr: The amount of any reve::sa1 of a write_down of
iiiventories, arising f rom j,ncrease in the net real j-zab1e value, shall
bo recognized as a reciuction in the amount. of jnventories recognized
es an expense in which the reversal occurs. ?ar 34 PN a
a. Only statement I is true I
L.
Only stdtement I1 is false
,:. Cnl.y statement III is false
("'l Al1 of the statement_s ar<l tnte
7R THE.RY oF AccouNrs
7.{ 6("Hl)J ririt Pre-Board Examination (octob er 2aL2 Batch)
\d/ 21 Juty 2ot2 t B:oo AM to 9:30 AM Page 7
9,4.
wnat is the proper time perioci (s ) ro record the ef f ects of a chanqe
in agcounting esLimaLe?
@ Curreni period and prospectively
b. Current period and retr:ospectively
c- Retrospectively onty
d. Current period only
W-G"X:a1-purpose financral statements are the product of
(a)
v
Financial accorrnting
b-. Managerial accounling
c. Both financial. and managerial accounting
d. Neither financj-al nor manaqerial accounting
*
,x st The underlying theme of tlre conceptual Framework is
@ Decisron usefulness
b. Understandability
c. Comparability
d. Reliability
is the correct order: of the steps in the accounting cycle
D the accounting period?
T ransaction analysis, journal entries, trial ba-l-arrce
T ransaction arralysis, postingr to the ledger, journal entries
T ransaction analysis, po.stinq t-o the ledger, adjusting
t.he
. accounts ;olE?FAi,
W Transaction anaI ysis,, journal entries, posting to the*IE6-ger
The required approach for hanclllng unusual ltems in interim financi.al
reports is to
a. Prorate t_hem over afl four. quarters
b. Prorate t-hem over the current and remaining quarters
(9 charge or credit t-he loss or gain in the quarter that they
v occrur
-* Disclose them only i, the serected explanatory noLes
*
fSA. Cred:t terms of 2/70, n/30 indicate that a
a. Two percent discount for early payment is available if the
invoice is paid be f o::e the tenth clay of the month f ollowing
the month to of sale
6 Two percent discount for early payment is availab]e within Len
ciays from the date of sale
c- Ten percent discount for early payment 1s available if the
,i nvoice is paici wj thin two days f rom the date of t.he invoice
H- Two percent rliscount for early payment is available if the
invoice is paid afLer the tenth duy, but before the thirtieth
day of the invoice rlate
S{assets are defined as
/ a. Resources with posBrible future economic benefits owed by an
/ ent_ity as a resul t 6f past t-r.rnsacti;ns
B)
(/ Re^sources with probable fr-tture economic benefits owned by an
\J entity as a resu1t of past t.ransactions
c. Resources with probable fu1-ure eccnornic benefits owned by an
enti Ly as a result of fut-uie transactions
d. Resources with possi.ble fuLure economic benefits owerl by an
enti-ty as a result of futu_re transact.i ons
THEORY OF ACCOUNTS
First Pre-Board Examination (October 2AL2 Batch)
2L luly 2Ot2 t 8:00 AM to 9:30 AM Page 9
, Financial forecasts
c. Acccunting policies
d. Contractuaf situations
/ what- is the preferable presentation of ac:ounts receivable
officers, employees, or affil-i.ated companies or-) a balance sheet? from
a. As offsets to capital K
bi By means of fooLnotes only .,{
if) As assets but separately from other rece,.vables
\J- As t.rade notes and accounts recej-vab,:e if they otherwise
qualify as current assets)
!b'-What capital. maintenance concept r:equires that asseLs and liabilities
',/ of a tl-rm i:e measured at current cost?
Nominal financial capital
b. Financial capital
/A- Physical capital
V
Real capital
,/
y'g'chanles in t.he fair val-ue of biological assets should be recognized
{*) In profit or loss
V. rn other comprehensive income 1't:4i:-:t'
c. In the statement of cash f l-ows t.; 'i
*o.,t ini":
d. In the stat.ement of changes in equity t"
1l unrealenished petty
',/ ' adlustments to avoid cash vouchers at balance sheet date will require
a. Overst.atement of both asset and expense
b. Under"statement of both asset and expense :xP {y
c. Understatement of asset and overstatemenl- of expense tt-r
t- of Accounts (TA
Uerc@
1 D 31 A 61 A 1. Breakeven sales: 960,000 + 600/o = P 1.6 M
2 B 32 D 62 D 3. CM per hours: Al (11), 82 (10), C3 (14)
'7
_l A 33 B 63 D 5. 620,000 + 45,000 + 70,000 - 150,000
4 C 34 C 64 c 7. CM: 200,000 (2.4) = P 480,000
r
.,t A 35 A 65 C 9. tZA= P + 0.15 P+ 0.06 (1.15 P)
11. (3,800 - 2,800x) 15.2 xSH = 800 (3.5)
{" t) 36 B 66 C
13. 1 + 1.2 + 0.8 + 0.75 + (4,000 + 10,000)
B 37 C 67 B 15. Wtd. Ave CMtl: 4Ao/o(600/o) + l5o/o(4Oo/o) = 0.3
I D 38 C 6B A BES-caru: {[150,000 (1.3)+ 9,000] +0.3] 40olo
6 A 39 A 69 D 17. Seli: P 24,40A Process: P 48,900 - P 24,500
10 B 40 D 70 B 19. AFOH (V): 4O,74O BAAH (V): 2,100 x 19.8
11 B 41 B 7t c 21. DL variance: 400 U = 3,500 F + LRV
D 42 B 72 D
22. LRV: 3,900 U = 6,500 (AR - 5)
23. LEV: 3,500 P = (6,500 - SH) 5 SH = 7,2O0
_t5 A. 43 A 73 B Actual production: 7,200 hours + 2
4A
L"t D 44 A 74 C 24. MPV: (AQ x AP) - (AQ x SP)
15 C 45 B 75 C 5,960 U :65,560 - AQ (4) AQ = 14,900
16 D 46 A 76 A 25. DM variance: 27,36A U = 5,960 U + MQV
77 C 47 D 77 D MQV: 16,4099= (14,900-SQ)4 SQ= 10,800
1B C 48 A 7B D
28. SH: 10,275 (2) FR: 45,000 + 22,5O0 = 2
29. AFOH (F):46,275 BASH (F): 45,000
le C 49 A 79 D
30. BASH (F): 45,000 SHSR (F): 20,550 (2)
7A A 50 A 80 A 32. Equation 1: 420 = 3 a + 60 b
21 A 51 A Equation 2: 8,800 = 60 a + 1,400 b
22 C 52 D Variable cost per unit (b): P 2.00
23 A 53 c 34. (7,OOO x 8) + 30,000
24 A 54 B 35. P > S: Av > VJ Ay = AInventoryxFFOH/u
(- Ay = (10,000 - 7,000) x (70,000 + 10,000)
25 55 B
36. 10,000 (20) + 70,000
26 B 55 C 3B. UnitVC: (2,150 - 1,450) + (75 - 40) = 29
27 D 57 B Total FC: 1,450 - 20 (40)
28 C 58 D 40. AR collections in June:
29 D 59 C > May sales: 357,000 x 600/o x 97o/o
30 A 60 A ! May sales: 357,000 x 25o/o
P April sales: 363,000 x 9olo
NOTE: Sales are billed at the end of month.
41. July purchases = CGS + Inv, end + Inv, beg
!!q44gement Services (M S)
12,000 + 1.3(12,200) - 1.3 (12,000) = L2,26O
1 A 26 B 42. (77,25O* x 2O x 54a/o)+ (11,840^ x 2O x 460/o)
2 B 27 A * May: 11,900 + 1.3 (11,400) - 1.3 (11.900)
3 D 28 B ^ April: 12,10O + 1.3 (11,900) - 1.3 (12,100)
4 C 29 A 43. (49,300* x 54o/a) + .(51,550xx x 45olo)
*June: (15olo x 342,000) - 2,000 = 49,300
5 A 30 C
xxMay: (15o/o x 357,000) - 2,000 = 51,550
6 B 31 A
44. Unit CM; 405,000 + 1,800 = 225
7 C 32 B
45. [2,100 (225) - 245,000] x 600/o
B B 33 D 46. { [ 1,500 (225) + 1, 500 ( 1 75)) * 247,5OO] x 6Oq/o
9 C 34 B 47.(5OO-300)X=61,500
10 A 35 A 48. (247,500 + 157,5OO) = 3Oo/o
11 C 36 B 50.
72 B 37 C llake Buy
(- DM 17.80
13 3B B
DL 19.00
L4 D 39 B VFOH 1.00
15 A 40 B FFOHX 8.90 :
16 C 41 C ocx* 3.90
17 A 42 A PP
Total P 50.60
- P 48.50
4q.s0_
1B A 43 A
19 c 44 A * Avoidable FFOH: 17.10 - 8.20
20 D 45 B xx Opportunity cost: 273,OOO + 70,000
2l B 46 A
22 B 47 B - END.
23 D 4B C
24 A 49 A
25 c 50 D