1. These include transactions that affect long-term assets and non-operating assets.

A. Financing activities
B. Investing activities
C. Operating activities
D. All of these
2. These include transactions that enter into determination of profit or loss. These transactions normally
affect income statement accounts.
A. Financing activities
B. Investing activities
C. Operating activities
D. All of these
3. These include transactions that affect the equity and non-operating liabilities.
A. Financing activities
B. Investing activities
C. Operating activities
D. All of these
4. Which of the following statement is incorrect regarding the provisions PAS 7?
A. Cash flows from operating activities may be reported using direct method or indirect method
B. Non-cash transactions are excluded from the statement of cash flows and disclosed only.
C. Only transactions that affected cash are included in the statement of cash flows.
D. All of these
5. According to PAS 7,interest income that is received in cash is presented in the statement of cash flows
as
A. Financing activities
B. Investing activities
C. Operating activities
D. Both B and C
6. According to PAS 7,interest expense that is paid in cash is presented in the statement of cash flows as
A. Financing activities
B. Investing activities
C. Operating activities
D. Both A and C
7. According to PAS 7,dividends paid in cash is presented in the statement of cash flows as
A. Financing activities
B. Investing activities
C. Operating activities
D. Both A and C
8. It refers to a method of presenting the operating activities section of statement of cash flows whereby each
major class of gross cash receipts and gross cash payments are shown separately.
A. Direct method
B. Function of expense method
C. Indirect method
D. Nature of expense method
9. It refers to method of presenting the operating activities section of a statement of cash flows whereby the
accrual basis profit or loss is adjusted for non-cash items and changes in operating assets and liabilities
A. Direct method
B. Function expense method
C. Indirect method
D. Nature of expense method
10. Under the indirect method,the cash flow from operating activities is determined by adjusting the reported
profit by (choose the incorrect statement)
A. Adding back decreases in operating assets
B. Adding back increases in operating assets
C. Adding back non-cash expense
 D. Deducting decreases in operating liabilities
11. Under the indirect method,the cash flow from operating activities is determined by adjusting the reported
profit by (chooses the incorrect statement)
A. Deducting decreases in non-operating liabilities
B. Deducting gains on sale of non-operating assets
C. Deducting increases in operating assets
D. Deducting non-cash income
12. When preparing a statement of cash flows using the direct method,amortization of patent is
A. Shown as an increase in cash flows from operating activities
B. Shown as a reduction in cash flows from operating activities
C. Included with supplemental disclosures of noncash transactions
D. Not reported in the statement of cash flows or related disclosures
13. Which of the following statements regarding cash equivalents is correct
A. A one-year treasury note could not qualify as a cash equivalent
B. All investments meeting the PFRS 9 Financial Instruments criteria must be reported as cash equivalents
C. One established,management’s policy for classifying items as cash equivalents cannot be changed
D. The date a security I purchased determines its “original maturity” for cash equivalent classification
purposes
14. Using indirect method,cash flows from operating activities would be increased by which of the following?
A. Decrease in accounts payable
B. Decrease in accounts receivable
C. Gain on sale of investments
D. Increase in prepaid expenses
15. A gain on the sale of a plant assets would be presented in a statement of cash flows prepared using indirect
method as
A. A cash inflow from financing activities
B. A cash inflow from investing activities
C. A deduction from net income
D. An addition to net income
16. In a statement of cash flows prepared using direct method, if wages payable increased during the
year, the cash paid for wages would be
A. Salary expense less increase in wages payable from the beginning to the end of the year.
B. Salary expense plus the increase in wages payable from the beginning to the end of the year.
C. Salary expense plus wages payable at the beginning of the year
D. The same as the salary expense
17. In a statement of cash flows using the direct method,which of the following would increase reported
cash flows fro operating activities?
A. Dividends received from investments
B. Gain on sale of a business segment
C. Gain on sale of equipment
D. Sale of treasury stock
18. In a statement of cash flows,payments to acquire instruments of other entities wold typically be
classified as cash outflows for
A. Financing activities
B. Investing activities
C. Operating activities
D. Equity activities
19. It comprises operations and cash flows that can be clearly distinguished, operationally and for
financial reporting purposes from the rest of the entity.
A. Business segment
B. Component of entity
C. Corporate asset
D. Disposal group
20. Which of the following statements is incorrect concerning the presentation of the discontinued
operation in the statement of financial position?
A. Assets of the component held for sale are measured at the lower of fair value less cost of disposal and
carrying amount.
B. Assets of the component held for sale are presented separately from all other assets of the entity.
C. Depreciable asset of the components held for sale shall be depreciated.
D. Liabilities of the components held for sale are presented separately from all other liabilities of the entity
21. When an entity discontinued an operations and disposed of the discontinued operation, the
transaction should be included as a gain or loss on disposal reported as
A. A prior period error
B. An amount after continuing operations and before net income
C. Other income or expenses
D. None of the above
22. Which of the following can be treated as a change in accounting estimate?
A. A change from recovery to percentage of completion
B. A change from the average cost to FIFO method
C. A change in reporting entity
D. A change to a different method of depreciation
23. A change in accounting estimate requires what kind of adjustment to financial statements?
A. Current period adjustment
B. Prospective adjustment
C. Retrospective adjustment
D. Current and prospective adjustment
24. On March 1,2017, the entity discovered that as a result of computational error, depreciation expense
for 2016 was overstated. The 2016 financial statements were authorized for issue on March 31,2017.
What must the entity do?
A. Correct the 2016 financial statements before issuing them
B. Reduce the depreciation for 2017
C. Restate the depreciation expense reported for 2016 in the comparative figures of the 2017 financial
statement as retrospective restatement of a prior period error.
D. Do nothing
25. With regards the result of discontinued operations presented in the income statement, the following
are to be disclosed in the notes to financial statements, with the exception of
A. Any gain or loss from the future disposal of the assets and settlement of the liabilities
B. Any impairment loss
C. Revenue, expenses and income or less attributable to the discontinued operation
D. Termination cost incurred
26. When an entity change the expected service life of an asset because additional information has been
obtained, which of the following should be reported?
A. Cumulative effect of change in accounting policy
B. Pro-forma effect or retrospective application
C. Prior period error
D. None of the above
27. The results of discontinued operations are presented separately in the statement of profit or loss and
other comprehensive income
A. As a single amount of gross of tax
B. As a single amount net of tax
C. As a part of the regular line item
D. A or B
28. According to PFRS 5, a disposal group may qualify as discontinued operation if
A. It is not a component of an entity
B. Does not meet the held for sale classification criteri under PFRS 5
C. A and B
D. None of these
29. The results of discontinued operations are presented in the statement of profit or loss
A. After the profit of loss from continuing operations but before the profit for the year
B. As an adjustment to the beginning balance of the retained earnings.
C. Before the profit of loss from continuing operations but after the profit for the year
D. Separately fro the profit or loss from continuing operations and a does not affected profit for the year
30. Which of the following is included in profit from continuing operations?
A. Discontinued operations
B. Extraordinary items
C. Income tax expense
D. Other comprehensive income
31. The statement of profit or loss includes which of the following?
A. Discontinued operations
B. Gains or losses arising from treasury share transactions
C. Other comprehensive incomes
D. Revenues, cost of goods sold, distribution costs, general and administrative expenses and extraordinary
items
32. PFRS 5 Noncurrent assets held for sale and discontinued operations does not apply to which of the
following assets?
A. Biological asset
B. Intangible assets
C. Investment in associate or subsidiary or joint venture
D. Investment property measured under cost model
33. To which type of asset do the measurement provisions of PFRS 5 apply?
A. Deferred tax asset
B. Financial asset
C. Intangible development asset
D. Investment property accounted for at fair value
34. Which of the following criteria does not have to be met in order for an operation to be classified as
discounted?
A. The operation is a subsidiary acquired exclusively with a view to resale
B. The operation is part of a single plan to dispose of a separate major line of business or geographical area.
C. The operation must be sold within three months of the year-end
D. The operations shall represent a separate major line of business or geographical area.
35. PFRS 15 applies to
A. Contracts with customers
B. Contracts with sellers
C. A and B
D. All contracts entered into by an entity in the course of its business
36. Arrange the following steps of revenue recognition in accordance with PFRS 15
I. Identify the performance obligations in the contract
II. Recognize revenue when (or as) the entity satisfied a performance obligation
III. Determine the transaction price
IV. Identify the contract
V. Allocate the transaction price to the performance obligations in the contract

A. III,IV,I,V,II
B. IV,I,III,V,II
C. IV,I,V,III,II
D. IV,III,I,V,II

37. Which of the following must be met before a contract with a customer accounted under PFRS 15?
A. Both contracting parties must acknowledge, whether explicitly or impliedly, the rights and obligations
created under the contract.
B. The collection of the consideration must be certain
 C. The contract must be in writing so the there will be no doubt in customer’s ability and intention to pay the
consideration
D. The promised goods or services must have already been transferred to the customers
38. A consideration received from a contract with a customer that meet the criteria under “Step 1” of
PFRS 15 is
A. Disclosed only
B. Recognized as liability
C. Recorded through memo entry only
D. A and C
39. A good or service is distinct if:
I. The customer cannot benefit from the good or service either on its own or together with other resources
that are readily available to the customer and
II. The promise to transfer the good or service is separately identifiable from other promises in the contract
A. I only
B. II only
C. I and II
D. Either I or II
40. IFRS 15 Revenue from contracts with customers was issued in
A. May 2014
B. May 2015
C. May 2016
D. May 2017
41. The following are revenue recognition fraud: (except)
A. Lehman Brothers Scandal
B. Satyam Scandal
C. Ted Baker Scandal
D. Tyco Scandal
42. IFRS 15 shall not be applied to the following: (except)
A. Construction contracts
B. Financial instruments
C. Insurance contracts
D. Lease contracts
43. The price at which an entity would sell a promised good or service separately to a customer.
A. Contract price
B. Stand-alone selling price
C. Sure price
D. Transaction price
44. If the customer does not have the option to purchase the warranty separately, the warranty is
accounted for in accordance with
A. IAS 11
B. IAS 18
C. IAS 37
D. IFRS 15
45. If the customer have the option to purchase the warranty separately, the warranty is accounted for in
accordance with
A. IAS 17
B. IAS 37
C. IFRS 15
D. PFRS 4
46. An entity has the right to repurchase the asset, this refer to:
A. Call option
B. Consignment arrangements
C. Forward contract
D. Put option
47. An entity has an obligation to repurchase the asset, this refer to:
A. Call option
B. Consignment arrangements
C. Forward contract
D. Put option
48. In the case of forward contract or a call option the customer does not obtain control of the asset,even
if it has physical possession. The entity will account for the contract as:
A. A lease in accordance with IFRS 16, if the repurchase price is below the original selling price
B. A lease in accordance with IFRS16, if the repurchase price is higher the original selling price
C. A financing arrangement of the repurchase prices is equal to or below than original selling price
D. A financing arrangement of the original selling price is equal to or greater than the repurchase price
49. Under this arrangement, the customer does not obtain control of the product at that point in time.
A. Bill and Hold arrangements
B. Consignment arrangements
C. Financing arrangements
D. Repurchase agreement
50. Under this arrangement, the goods are sold but remain in the possession of the seller for a specified
period.
A. Bill and Hold arrangements
B. Consignment arrangements
C. Financing arrangements
D. Repurchase agreement
51. The scope of IAS 20
A. Accounting for government grants and disclosure of government assistance
B. Accounting for government grants in financial statements reflecting the effects of changing prices
C. Government acting as par-owner of the entity
D. Government assistance given in the form of “tax breaks”
52. In which of the following situations is the net realizable value of an item if inventory likely to be lower
than cost?
A. Demand for the item is increasing
B. The item is becoming obsolete
C. The production cost of the item has been falling
D. The selling price of the item has been rising
53. At what amount is a biological asset be measured on initial recognition in accordance with IAS 41
Agriculture
A. Cost less estimated costs to sell
B. Fair value
C. Fair value less estimated costs to sell
D. Production cost
54. Which of the following is not the outcome of a biological transformation according to IAS 41?
A. Degeneration
B. Growth
C. Harvest
D. Procreation
55. How is gain or loss arising on a biological asset recognized in accordance with IAS 41?
A. Adjusted in retain earnings
B. Deferred and recognized over the life of the biological asset
C. Included in profit or loss fro the year
D. Shown under “other comprehensive income”
56. Inventories are assets (choose the incorrect one)
A. Held for sale in the ordinary course of business
B. Held for use in the production or supply of goods or services
C. In the form of materials or supplies to be consumed in the production process or in the rendering of services
D. In the process of production for sale
57. The cost of inventory comprises all of the following, except
A. Cost or purchase
B. Cost of conversion
C. Storage cost of raw materials for production
D. Storage cost of finished goods
58. Which of the following cost of conversion cannot be included in cost of inventory?
A. Cost of direct labor
B. Factory overhead based on normal capacity
C. Factory rent and utilities
D. Salaries of sales staff (sales department shares the building with factory)
59. Fixed production overheads include all of the following, except
A. Cost of factory management and administration
B. Depreciation of factory building
C. Indirect materials and indirect labor
D. Maintenance of factory equipment
60. Inventories shall be measured at
A. Cost
B. Higher of cost and net realizable value
C. Lower cost and net realizable value
D. Net realizable value
61. The cost of inventory shall be measured using, except
A. FIFO
B. Average method
C. LIFO
D. Specific identification
62. Inventories are usually written dow to net realizable value
A. By class
B. By segment
C. By total
D. Item by item
63. Agricultural produce is measured at
A. Fair value
B. Fair value less cost to sell at the point of harvest
C. Net realizable value
D. Net realizable less normal profit margin
64. It is the harvested product of the entity’s biological asset
A. Agriculture
B. Agricultural produce
C. Harvest
D. Product
65. Biological transformation results from asset changes through all of the following, except
A. Growth
B. Degeneration
C. Procreation
D. Production of agricultural produce
66.when the fair value of the biological asset cannot be determined reliably, the biological asset shall be
measured at
A. Cost
B. Cost less accumulated depreciation
C. Cost less accumulated depreciation and accumulated impairment losses
D. Net realizable value
67. Where there is a long aging or maturation process after harvest, the accounting for such products
shall be dealt with by
A. IAS 41
B. IAS 2
C. IAS 16
D. IAS 40