Updates in Philippine Accounting and Financial Reporting Standards 1

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 2

Name: CHIN NIEVE S. FIGURA

Class Schedule: _MW 4:00 PM-5:30 PM_

Assessment

Multiple Choice

Directions: Read and analyze each item. Encircle the letter of the correct answer. You
may also view this exam on google class. Submit your work in the pigeon boxes which
are provided in your department/college, or to google class on or before the date as
reflected in your study schedule.

1. Which of the following is the correct definition of provision?

a. A possible obligation arising from past event
b. A liability of uncertain timing or amount
c. A liability which cannot be easily measured
d. An obligation to transfer funds to an entity

2. What amount is recognized as provision?

a. Best estimate of the expenditure
b. Minimum of the range
c. Maximum of the range
d. Midpoint of the range

3. When the provision arises from a single obligation, the estimate of the amount.
a. Reflects the weighting of all possible outcome by their associated
probabilities.
b. Is determined as the individual most likely outcome.
c. Is the individual most likely outcome adjusted for the effect of other possible
outcomes.
d. Midpoint of the possible outcomes

4. A provision is
a. An event which is not recognized because it is not probable or cannot be
measured reliably
b. An event which is probable and measurable
c. An event which is probable, possible or remote and measurable.
d. An evet which is probable but not measurable.

5. Which of the following would not be considered a provision?

a. Warranty liability
b. Bad debt
c. Tax payable
d. Note payable

6. A bond convertible by the holder into a fixed number of ordinary shares of the entity
is

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 3

a. A compound financial instrument

b. A primary financial instrument
c. A derivative financial instrument
d. An equity instruments

7. The process from bonds issued with nondetachable share warrants shall be
accounted for
a. Entirely as bond payable
b. Entirely as shareholders’ equity
c. Partly us unearned revenue and partly as bonds payable
d. Partly as bonds payable and partly as shareholders’ equity

8. These are all forms of consideration given by an entity in exchange for services
rendered by employees
a. Employee benefits
b. Employee compensation
c. Fringe benefits
d. Salaries and wages

9. The components of defined benefit cost include all, except

a. Service cost
b. Net interest
c. Remeasurement
d. Contribution to the plan

10. The service cost of a defined benefit plan comprises all of the following, except
a. Current service cost
b. Past service cost
c. Gain or loss on plan settlement
d. Net interest

11. Which of the following components of defined benefit cost shall be recognized
through other comprehensive income?
a. Current service cost
b. Past service cost
c. Net interest
d. Remeasurement

12. Which of the following statements is true?

a. Vested and unvested past service cost shall be amortized over the remaining
vesting period.
b. Vested past service cost shall be recognized as expense and unvested past
service cost shall be amortized over the remaining vesting period.
c. Vested and unvested past service cost shall be recognized in retained
earnings
d. Vested and unvested past service cost shall be expense immediately.

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 4

13. These are employee benefit which are payable after completion of employment
a. Short-term employee benefit
b. Postemployment employee benefits
c. Other long-term employee benefits
d. Termination benefits

14. In rare circumstances, when a retirement benefit plan has attributes of both defined
contribution and defined benefit plan, the plan is deemed.
a. Defined benefit plan
b. Defined contribution plan
c. Neither defined benefit plan nor defined contribution plan
d. Both defined benefit plan and defined contribution plan.

15. It is the profit for a period before deducting tax expense

a. Accounting profit
b. Taxable profit
c. Gross profit
d. Net profit

16. It is the deferred tax consequences attributable to a taxable temporary difference

a. Deferred tax liability
b. Deferred tax asset
c. Current tax liability
d. Current tax expense

17. A deferred tax liability is computed using

a. Current tax law regardless of expected or enacted future tax law
b. Expected future tax law regardless of whether enacted or not
c. Current tax law unless a future enacted tax law is different
d. Either current or expected future tax law regardless of whether the expected
future tax law is enacted or not.

18. In computing basic earning per share, an entity would include which of the following?
a. Dividends on nonconvertible cumulative preference shares
b. Dividend on ordinary shares
c. Interest on convertible bonds
d. Number of nonconvertible cumulative preference shares.

19. EPS disclosures are required for

a. Entities whose ordinary shares and potential ordinary shares are publicly
traded.
b. Entities that are in the process of issuing ordinary shares in the public market
c. All entities
d. Entities whose ordinary shares and potential ordinary shares are publicly
traded and entities that are in the process of issuing ordinary shares in public
market.

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 5

20. EPS disclosures are

a. Required for all public and nonpublic entities
b. Required for public entities and encouraged for nonpublic entities
c. Encourage for public entities and required for nonpublic entities
d. Encouraged for all entities

21. In computing basic earnings per share, the amount of preference dividend on
noncumulative preference shares should be
a. Deducted from net income whether declared or not
b. Deducted from net income only when declared
c. Added to net income only when declared
d. Ignored

22. In computing basic loss per share, the annual preference dividend on cumulative
preference shares should be
a. Ignored
b. Deducted from the net loss whether declared or not
c. Added to the net loss whether declared or not
d. Added to the net loss only when declared

23. Purchasing power gain or loss results from

a. Monetary assets
b. Monetary liability
c. Monetary asset and nonmonetary liability
d. Nonmonetary asset and nonmonetary liability

24. Financial statement that are expressed under a stable monetary unit are
a. Constant peso financial statements
b. Nominal peso financial statements
c. Current cost financial statements
d. Fair value financial statements

25. During a period of inflation, an account balance remains constant. With respect to
this account, a purchasing power gain will be recognized if the account is a
a. Monetary liability
b. Monetary asset
c. Nonmonetary liability
d. Nonmonetary asset

You did a great job! If you have not completed,

or have difficulty in accomplishing the activity, please
send me a message to our google class or you may ask
clarifications through a text message or phone calls on
the contact number included in your course guide.

You had just completed this unit. You are now

ready to take Unit 4.

“Not intended for publication. For classroom instruction purposes only”.

Updates in Philippine Accounting and Financial Reporting Standards 6

“Not intended for publication. For classroom instruction purposes only”.