CORDILLERA CAREER DEVELOPMENT COLLEGE

College of Accountancy
Buyagan, Poblacion, La Trinidad, Benguet

Accounting 201A
Final Exams- 1st Sem SY 2020-2021

INSTRUCTION:
1. Prepare an answer sheet using FOUR (4) columns @ 15 items per column. In every column, LEAVE a SPACE after
every five numbers. Do not forget to write your names.
2. Read the questions carefully and select the LETTER corresponding to your choice and write that letter in your answer
sheet.
3. Upload your answers at the school LMS for Acctg 201A in document format.

1. Postdated checks received from customers are excluded from cash and reverted back to
a. Accounts payable
b. Accounts receivable
c. Purchases
4. Purchase Discount

2. Undelivered checks drawn and postdated checks drawn are included in cash and reverted back to
a. Accounts receivable
b. Purchases
c. Accounts payable
d. Merchandise Inventory

3. Only highly liquid investments that are acquired 3 months or less before maturity can qualify as
a. Cash equivalents
b. Cash
c. Cash and Cash equivalents
d. Short term Investments

4. Bank overdrafts are reported as ______________, except when offsetting is permitted

a. Noncurrent liabilities
b. Unearned revenue
c. Current assets
d. Current liabilities

5. A bank reconciliation statement is a report that is prepared for the purpose of bringing the balances of cash per
records into agreement with the
a. debit entries of the bank
b. credit entries of the bank
c. Cash in Bank balance
d. Balance per bank statement

6. A pro-forma bank reconciliation

a. Bal. per books, end + Credit Memos – Debit Memos + Book errors-Book errors = Adjusted Balance
b. Bal. per books,end + DM – CM +Bank errors = Adjusted Balance
c. Bal. per books,end + CM – DM –bank errors = Adjusted Balance
d. Bal. per bank, end + Dep. In Transit – Outs. Checks + Book errors = Adjusted Balance

7. A pro forma bank statement

a. Bal. per books,end + DM – CM +Bank errors = Adjusted Balance
b. Bal. per books,end + CM – DM –bank errors = Adjusted Balance
c. Bal. per bank, end + Dep. In Transit – Outs. Checks + Book errors = Adjusted Balance
d. Bal. per bank,end + DIT – OC + Bank error – Bank error =Adjusted Balance

8. Credit memos (CM) are deductions made by the bank to the depositor’s bank account but not yet recorded by
the depositor.
a. False
b. True
c. None of the above
d. cannot be determined
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9. Outstanding checks are checks drawn by the bank and released to payees but are not yet en-cashed with the
bank
a. True
b. False
c. None of the above

10. These are receivables arising from the sale of goods or services in the ordinary course of business.
a. Nontrade receivables
b. Due from Officers & Employees
c. Trade receivables
d. None of the above

11. Under FOB shipping point, ownership is transferred to the buyer upon shipment. Therefore, sales and accounts
receivable are recognized on
a. date of arrival
b. date of shipment
c. date of consignment
d. 2 days after shipment

12. Sales and accounts receivable are recognized only when the buyer receives delivery of the goods.
a. FOB shipping point
b FOB alongside the vessel
c. 5% E.O.M.
d. FOB Destination

13. This method of recognizing bad debts on accounts receivable is used for financial reporting purposes.
a. Percentage method
b. Aging method
c. Allowance method
d. Direct write off method

14. Doubtful accounts may be estimated using, except:

a. Percentage of credit sales
b. Percentage of receivables
c. Aging of receivables
d. factoring of receivables

15. The amount computed under the percentage of receivables and aging methods is the
a. Bad debts expense for the period
b. Required balance of the allowance account
c. Amount to be written off
d. Doubtful accounts for the period

16. According to PFRS 15, trade receivables that do not have a significant financing component are measured at
their
a. Market price
b. Net realizable value
c. Transaction price
d. Bid price

17. Receivables are initially recognized at fair value plus transaction costs.
a. True
b. False
c. None of the above

18. Short term receivables are initially measured at whichever is most appropriate , except:
a. face amount
b. transaction price
c. present value
d. future value
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19. Long-term receivables with reasonable interest rate are initially recognized at face value and subsequently
measured at
a. recoverable historical cost
b. recoverable future cost
c. market value
d. Amortized cost

20. Long-term noninterest- bearing receivables and long-term receivables with unreasonable interest rate are
initially measured at present value and subsequently measured at
a. Cost
b. Amortized cost
c. recoverable historical cost
d. future value

21. If the cash price equivalent of the non-cash asset forgone in exchange for a receivable is available, the receivable
is initially measured at the cash price equivalent and subsequently measured at
a. Amortized cost
b. market value
c. fair value
d. residual value

22. Impairment of financial assets is accounted for under this model

a. expected credit loss model
b. expected debit loss model
c. direct write off model
d. impairment loss model

23. Financial assets are derecognized when

a. the contractual rights to the cash flows from the financial asset expire;
b. the financial assets are transferred and the transfer qualify for de-recognition;
c. a only
d. a & b only
e. b only

24. A transfer qualifies for de-recognition if substantially all the risks and rewards of ownership of the financial asset
are transferred.
a. True
b. False

25. Assignments are recorded by debiting “Accounts receivable assigned” and crediting
a. Cash
b. Accounts receivable
c. Sales
d. Notes receivable

26. What type of factoring is considered as an outright sale of receivables

a. With recourse
b. Without recourse
c. In due course
d. Sale con Pacto de retro

27. Receivables can be a source of common short term financing by way of, except:
a. Pledging
b. Assignment
c. Factoring
d. Rediscounting

28. Consigned goods are included as an inventory of the

a. Buyer
b. Mortgagor
c. Consignor
d. Consignee
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29. Goods sold under a product financing agreement whereby the seller is obligated to repurchase the goods sold at
a future date is considered an inventory of the
a. Buyer
b. Seller
c. Agent
d. Guarantor

30. Inventories sold under installment sale whereby the seller retains title solely to protect the collectability of the
amount due are included, at the time of sale, as inventory of the
a. Seller
b. Buyer
c. Consignee
d. Vendor

31. Inventories are measured at

a. Cost
b. Market value
c. Fair value
d. Lower of cost and Net Realizable Value

32. The cost of inventories comprise the following, except:

a. Costs of purchase
b. Cost of conversion
c. other costs incurred in bringing the inventories to their present location & condition
d. Cost of transportation out

33. The Net Realizable Value (NRV) is the estimated selling price minus
I. estimated cost of completion
II. estimated cost to sell
a. a only
b. b only
c. both a & b
d. None of the above

34. The cost formulas permitted under PAS 2 are the following, except:
a. LIFO
b. FIFO
c. Specific Identification
d. Weighted average

35. This shall be used for inventories which are not ordinarily interchangeable.
a. LIFO
b. Specific Identification
c. FIFO
d. Weighted average

36. Reversals of inventory write-downs can exceed the amount of write-downs previously recognized.
a. True
b. False
c. None of the above

37. Inventory value may be estimated using

a. Relative sales value method
b. Gross profit method
c. Retail method
d. a & b above
e. b & c above
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38. The cost ratio under average cost method is

a. TGAS at cost divided by TGAS at retail
b. TGAS at retail divided by TGAS at cost
c. TGAS at retail- TGAS at cost
d. COS divided TGAS at cost

39. The cost ratio under FIFO cost method is equal to

a. TGAS at cost less Beg. Inventory at cost / TGAS at retail less Beg. Inventory at retail
b. TGAS at cost add Beg Inventory at cost / TGAS at retail add Beg Inventory at retail
c. TGAS at cost/ TGAS at retail
d. None of the above

40. It is defined as cash, equity instrument of another entity, contractual right to receive cash or to exchange
financial instrument under favorable condition.
a. Financial instrument
b. Financial asset
c. Financial liability
d. Debt instrument

41. The basis of classifying financial assets are

I. The entity’s business model for managing financial assets
II. The contractual cash flow characteristics of the financial asset
III. The future cash flow of the financial asset

a. I only
b. I and II only
c. I, II and III only
d. None of the above

42. The classifications of financial assets are the following, except:

a. FVPL
b. FVOCI ( Election)
c. FVOCI (mandatory)
d. Amortized cost
e. Wasting assets

43. Purchased accrued interest is included in the initial measurement of an investment.

a. True
b. False
c. None of the above

44. The impairment requirement of PFRS 9 apply only to financial assets measured at
a. amortized cost or FVOCI (mandatory)
b. FVPL
c. Investment in Equity securities
d. None of the above

45. Financial assets that can be re-classified

a. Debt-type financial assets
b. Equity instruments
c. Investment in property
d. None of the above

46. The risk that an entity may not be able to collect on a financial asset
a. Liquidity risk
b. Credit risk
c. Audit risk
d. Control risk
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47. Other long-term investments include investments in funds set aside for specific and long term purpose and cash
surrender value of life insurance.
a. True
b. False
c. None of the above

48. It is a financial instrument or other contract that derives its value from the changes in value of some other
underlying asset or other instrument.
a. Contract of sale
b. Deed of assignment
c. Derivative
d None of the above

49. The characteristics of a derivative are:

a. its value changes in response to the change in an underlying
b. requires no initial investment or a very minimal initial net investment
c. it is settled at a future date
d. All of the above (a,b,c)
e. None of the above

50. Examples of derivatives, except

a. Option
b. swap
c. Forward contract
d. Backward contract
e. Futures contract

51. An associate is an entity over which the investor has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but not control over these policies. It is
presumed to exist when owner ship interest is at least
a. 10%
b. 15%
c. 20%
d. 25%

52. Biological asset is initially and subsequently measured at

a. Fair value less costs to sell
b. Market value less costs to sell
c. Intrinsic value less costs to sell
d. Face value less costs to sell

53. Biological assets and agricultural produce are recognized when the following are present, except:
a. Control
b. Probable future economic benefits
c. fair value or cost can be measured reliably
d. There is demand in the market

54. Property ,Plant and Equipment are, except:

a. Available for sale
b. Tangible assets
c. Used in normal operations
d. Long-term in nature

55. The elements of cost of a PPE are

I. purchase cost
II. direct costs
III. present value of decommissioning and restoration costs
a. I only
b. I & II only
c. I & II & III only
d. I & III only
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56. Changes in depreciation method, useful life, or residual value are considered changes in accounting estimate
and are accounted for
a. Retroactively
b. Prospectively
c. Prior period adjustment
d. None of the above

57. Subsequent to initial recognition, an entity shall choose either the cost model or the revaluation model as its
accounting policy and shall apply that policy to an entire class of PPE.
a. False
b. True
c. None of the above

58. The cost of natural resources include the following:

I. purchase costs including direct costs, decommissioning and restoration costs;
II. exploration costs to the extent that they are capitalized in accordance with an entity’s accounting policy
III. Intangible development costs

a. I only
b. II only
c. I & II only
d. I, II & III only
e. I & III only

59. Government grants are recognized only when there is reasonable assurance that the entity will comply with the
conditions attaching to them and the grants will be received.
a. True
b. False
c. None of the above

60. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
are not capitalized.
a. True
b. False
c. None of the above

End of Exam
/DBAY-AN, cpa,mba,rea,reb,lpt