7.

Which of the following statements about the bases of accounting for income and expenses
is false?
A. Total Operating expenses will be the same under pure cash and modified cash basis.
B. Income and expenses with cash flows are recognized in cash, modified cash and accrual
basis
C. Modified Cash basis will yield the same Gross Profit amount as Accrual basis
D. Cash basis of accounting does not recognize any adjusting entry at year end.
38. Which of the following statements relating to FRSC and standard setting process in the
Philippines is
(are) true?
I. The Financial Reporting Standards Council (FRSC), Board of Accountancy (BOA), the
Philippine Institute of CPAs (PICPA), the Philippine Interpretation Committee (PIC) and the
Professional Regulation Commission (PRC) are all involved in the standard setting process,
with PRC as the final approving authority.
II. Before Philippine reporting standards can be adopted it must first be published in the PRC
Official Gazette.
III. Members of the accountancy profession may participate in the accounting standard setting
process by responding to invitations to comment on the Exposure Drafts issued by the
accounting standard setters.
A. I is true B. I and II are true C. II and III are true D. I, II and III are true