ALCERA, VINCENT LUIGIL C.

BSA 2-6

ACCO 20063 Module 1 Assessment Activity

A. Identification - Write the word(s) best described by the statements below:

International 1. The standard-setting body who issues the International Financial Reporting
Accounting Standards.
Standards Board
(IASB)

Financial 2. The standard-setting organization who issues the U.S. GAAP.

Accounting
Standards Board
(FASB)

Financial 3. The process of identifying, measuring and communicating economic

Accounting information to permit informed judgment and decision by users of the
information.

Philippine 4. This was created to issue implementing guidelines on PFRS.

Interpretations
Committee (PIC)

Normal Operating 5. The amount of time that is expected to elapse until an asset is realized or
Cycle otherwise converted into cash.

Statement of 6. The financial report that shows the reporting entity’s economic resources and
Financial Position claims.

Statement of 7. The financial report that shows the changes due to events and transactions
Changes in Equity other than financial performance such as the issue of equity instruments and
distributions of cash or other assets to shareholders.

Historical Cost 8. This is used when assets are recorded at the amount of cash or cash
equivalents or the fair value of the consideration given to acquire them at the
time of their acquisition.

Operating and 9. Refers to the ability of the business to raise cash to meet unexpected cash
Financial requirements.
Flexibility

Management 10. Those responsible for the preparation and presentation of financial
statements.

International
 ALCERA, VINCENT LUIGIL C.
BSA 2-6

Accounting 11. The standard that sets out the requirements for the presentation of the cash
Standards 7 (IAS 7) flow statement and related disclosures.

Financial 12. Portray the financial effects of transactions and other events by grouping
Statements them into broad classes according to their economic characteristics.

Gain on sale 13. Result if an asset is sold more than book value.

Asset 14. One of its recognition criteria is that it is probable that the future economic
events will flow to the enterprise.

Physical Capital 15. Under this concept a profit is earned only if the physical productive capacity
Maintenance (or operating capability) of the entity (or the resources or funds needed to
achieve that capacity) at the end of the period exceeds the physical productive
capacity at the beginning of the period, after excluding any distributions to,
and contributions from, owners during the period.

B. Sequencing - Arrange the following according to the correct sequence.

A. IASB Due Process

2 1. An exposure draft, which is IASB’s main vehicle for consulting the public, is
published for public comment.
3 2. All comments received on discussion document and exposure draft are considered.
1 3. Topics are identified and placed on IASB’s agenda.
5 4. After the due process is completed, all outstanding issues are resolved, and the
IASB members have balloted in favor of publication, the IFRS is issued.
4 5. After comments on the first exposure draft have been affected, the IASB considers
whether to publish its revised proposals for another round of comments.

B. FRSC Due Process

4 1. Approval of a standard or an interpretation by a majority of the FRSC members.
1 2. Consideration of pronouncement of IASB.
3 3. Consideration of all comments received within the comment period and, when
appropriate, preparing a comment letter to the IASB.
2 4. An exposure draft approved by a majority of the FRSC members for comments
(comment period 60 –30 days)

E. True or False - Write A if the statement is correct or B if incorrect. UNDERLINE the word
or group of words that make the statements incorrect.
ALCERA, VINCENT LUIGIL C.
BSA 2-6

1. The principal difference between two concepts of capital maintenance is the treatment of
the effects of changes in the prices of assets and liability of the entity. B

2. The selection of the appropriate concept of capital by an entity should be based on the
needs of the users of its financial statements. A

3. The concept of capital maintenance chosen by an entity shall determine the accounting
model used in the preparation of its financial statements. B

4. The Conceptual Framework serves as a guide in developing future financial reporting

standards and in reviewing existing ones. B

5. The Conceptual Framework is a source of guidance for determining an accounting

treatment where a standard does not provide specific guidance. A

6. The Conceptual Framework does not in any way assist preparers of financial statements
in applying PFRS and in dealing with topics that have yet to form the subject of PFRS. B

7. The Conceptual Framework is not a PFRS, and nothing in it overrides any specific PFRS,
including PFRS that is in some respect in conflict with the Conceptual Framework. A

8. The GPFS show the results of the stewardship of the management for the resources
entrusted to it by the capital providers. A

9. The GPFS are prepared at least annually and are directed to both the common and
specific information needs of a wide range of statement users. B

10. The GPFS provide information about the financial position, performance and cash flows
of an enterprise that is useful to a wide range of users in making economic decisions. A