1.Many shares and most share options are not traded in an active market.

Therefore, it is often difficult

to arrive at a fair value of the equity instruments being issued. Which of the following option valuation
techniques should not be used as a measure of fair value in the first instance?
(1/1 Points)
Intrinsic value.
Monte-Carlo model.
Black-Scholes model.
Binomial model.

2.How should the effect of a change in accounting estimate be accounted for?

(1/1 Points)
As a prior period adjustment to beginning retained earnings
In the period of change and future periods if the change affects both
By reporting proforma amounts for prior periods
By restating amounts reported in financial statements of prior periods

3.For cash settled share-based payment transaction, any change in fair value of the liability is
(1/1 Points)
Treated as component other comprehensive income
Not recognized
Included in retained earnings
Included in profit or loss

4.These arise from misapplication of accounting policies, mathematical mistakes, oversights or

misinterpretations of facts, or fraud.
(1/1 Points)
Error
Change in accounting estimate
Change in accounting policy
Impracticable application

5.Which statement is true regarding interim financial statements?

(1/1 Points)
Interim financial statements must be presented with the most recent annual financial statements
Interim financial statements are required
If interim financial statements are presented, only a statement of financial position and a statement
of comprehensive income are required
 If interim financial statements are presented, four basic financial statements are required
6.In accounting for share appreciation rights, compensation expense is generally
(1/1 Points)
Allocated over the service period of employees
Not recognized
Recognized on the date of grant
Recognized on the date of exercise

7.Interest cost included in the net pension cost recognized under a defined benefit plan represents the
(1/1 Points)
Increase in the fair value of plan assets due to the passage of time
Increase in the projected benefit obligation due to the passage of time
Change in the nature of benefits
Shortage between the expected and actual returns on plan assets

8.Earnings per share should be computed on the basis of

(1/1 Points)
voting ordinary shares and participating preference shares
voting ordinary shares
preference shares
voting and nonvoting ordinary shares

9.A provision shall be recognized as liability when

(1/1 Points)
An entity has a present obligation as a result of a past event
All of these are required for the recognition of a provision as liability
The amount of the obligation can be measured reliably
It is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation

10.EPS Disclosures are

(1/1 Points)
encouraged for all entities
required for public entities and encouraged for nonpublic entities
encouraged for public entities and required for non-public entities
required for all public and non-public entities
11.In computing basic loss per share, the annual preference dividend on cumulative preference shares
should be
(1/1 Points)
Ignore
Added to the net loss whether declared or not
Deducted from the net loss whether declared or not
Added to the net loss only when declared

12.The vested benefits in a pension plan represent

(1/1 Points)
Benefits to be paid to the retired employee in the current year
Benefits to be paid to the retired employee
Benefits that are not contingent on the employee's continuing in the service of the employer
Benefits accumulated in the hands of trustee

13.Imagine you are an employer. When should you recognize short-term employee benefits?
(1/1 Points)
When the employees have rendered service in exchange for the employee benefits.
Every 1st day of the month
Never!
Every 15th and 30th of the month.

14.An entity shall offset a deferred tax asset and deferred tax liability
(1/1 Points)
When the entity has no legal enforceable right to offset
When income taxes are levied by different taxing authority
Under all circumstances
When income taxes are levied by the same taxing authority and the entity has a legal enforceable
right to offset a current tax asset against a current tax liability

15.Under PFRS 1, the early application of PFRSs that have not yet become effective as of the current
reporting period
(1/1 Points)
is required, but not permitted.
is required.
is permitted, but not required.
 is prohibited.
16.When issuing share options to employees, which of the following factors is most relevant in
determining the accounting treatment?
(0/1 Points)
Whether the share options are issued in lieu of salary
The market value of the shares issued
The par value of the shares issued
The authorized number of shares

17.You are employed as an accountant. Your company’s retirement plan states that, upon retirement,
an employee (not less than 60 years but not more than 65 years of age) is entitled to a lump sum
payment equal to the employee’s final monthly salary level multiplied by the number of years in service
(not less than 10 years). At the end of month following the month of retirement and every month
thereafter, the retired employee is entitled to a monthly pension equal to one-eighth (1/8) of the final
monthly salary level. The monthly pensions cease upon death of the retired employee. However, if the
employee has immediate dependent(s) with age of less than 18 years, the dependent(s) will be entitled
to the monthly pensions, which will cease when the dependent(s) reaches 18 years of age. What type of
post-employment benefit plan does your company have?
(0/1 Points)
Defined benefits plan
Defined contribution plan
Defined pension plan
Cannot be determined; insufficient information

18.The return on plan assets

(1/1 Points)
is equal to the expected rate of return times the fair value of plan assets at the beginning of the
period
is equal to the change in fair value of the plan assets during the year
includes interests, dividends and change in the fair value of the plan assets during the year
is equal to the discount rate times the fair value of the plan assets at the beginning of the period

19.According to PAS 37, provisions are (choose the incorrect statement)

(0/1 Points)
recognized and disclosed.
presented in the statement of financial position separately from other types of liabilities.
necessarily estimated because their settlement amount is not certain.
disclosed only, unless their expected occurrence is remote.
20.Which statement in relation to share options granted to employees in exchange for services is true?
(1/1 Points)
The services received shall be measured at the fair value of the employee's services
Fair value shall be measured at the date of exercise
All of these statements are not true
Fair value shall be measured at the date the options vest.

21.According to PAS 34, measurements in the interim period are made on

(0/1 Points)
a or b, as matter of accounting policy choice.
a discrete basis.
a year-to-date basis.
an item-by-item basis.

22.Under IFRS, where ordinary shares are issued but not fully paid, the ordinary shares are treated in
the calculation of basic EPS
(1/1 Points)
as a fraction of an ordinary share to the extent that the shares are entitled to participate in
dividends
in the same way as warrants or options and are included only in diluted EPS
in the same way as fully paid ordinary shares
are ignored

23.An item that would create a permanent difference in pretax financial income and taxable income
would be
(1/1 Points)
Using accelerated depreciation for tax purposes and straight line depreciation for book purposes
Purchasing equipment previously leased under an operating lease in prior years
Paying fines for violation of laws
Using the percentage of completion method on long-term construction contracts

24.According to PAS 37, a present obligation that is possible and can be measured reliably is
(0/1 Points)
recognized.
disclosed only.
ignored.
 recognized and disclosed.
25.An entity is preparing interim financial statements for six months ended June 30, 2018. In th interim
financial statements for six month, a statement of financial position on June 30, 2018 and a statement of
comprehensive income for six months ended June 30, 2018 shall be presented. In addition, all of the
following shall be presented, except
(0/1 Points)
Statement of financial position on December 31, 2017
Statement of financial position on June 30, 2017
Statement of comprehensive income for six months ended June 30, 2017
Statement of cash flows for six months ended June 30, 2017

26.Justification for the method of determining periodic deferred tax expense is based on the concept of
(1/1 Points)
Recognition of asset and liability
Matching of period expense to periodic revenue
Consistency of tax expense measurement with actual tax planning strategies
Objectively in the calculation of periodic expense

27.Where it is impracticable to determine the period-specific effect of the change on comparative

information for one or more prior periods presented, the retrospective application or restatement is
applied
(1/1 Points)
Prospectively only to the extent that it is practicable
Retrospectively only to the extent that it is practicable
Prospectively to the extent that estimates can be made
Retrospectively to the extent that estimates can be made

28.The Sarin Company's financial statements for the year ended 30 April 20X8 were approved by its
finance director on 7 July 20X8 and a public announcement of its profit for the year was made on 10 July
20X8. The board of directors authorised the financial statements for issue on 15 July 20X8 and they were
approved by the shareholders on 20 July 20X8. Under PAS 10, after what date should consideration no
longer be given as to whether the financial statements to 30 April 20X8 need to reflect adjusting and
non-adjusting events?
(1/1 Points)
7 July 20X8
10 July 20X8
15 July 20X8
20 July 20X8
29.Deferred tax assets and deferred tax liabilities do not alter the tax to be paid in the current period.
However, they cause tax payments to either increase or decrease when they reverse in a future period.
The reversal of which of the following will cause an increase in tax payment?
(0/1 Points)
Deferred tax asset
Deferred tax benefit
Deferred tax liability
Deferred tax expense

30.The deferred tax expense is equal to

(1/1 Points)
Increase in deferred tax asset
Increase in deferred tax asset less the increase in deferred tax liability
Increase in deferred tax liability
Increase in deferred tax liability less the increase in deferred tax asset

31.When the provision arises from a single obligation, the estimate of the amount
(1/1 Points)
reflects the weighting of all possible outcomes by their associated probabilities
is determined as the individual most likely outcome
is the individual most likely outcome adjusted for the effect of other possible outcomes
midpoint of the possible outcomes

32.The process of funding a defined benefit plan refers to

(1/1 Points)
Determining the amount that might be reported for pension expense
Determining the defined benefit obligation
Determining the accumulated benefit obligation
Making the periodic contributions to a funding agency to ensure that funds are available to meet
retirees' claims

33.Which of the following is correct regarding the provisions of PAS 34?

(1/1 Points)
PAS 34 encourages publicly listed entities to prepare at least a semi-annual financial report to be
issued not later than 60 days after the end of the interim period.
PAS 34 encourages publicly listed entities to prepare at least three quarterly financial reports to be
issued not later than 45 days after the end of each interim period.
 PAS 34 requires both publicly and non-publicly listed entities to prepare at least a semi-annual
financial report to be issued not later than 60 days after the end of the interim period.
PAS 34 requires publicly listed entities to prepare at least a semi-annual financial report to be issued
not later than 60 days after the end of the interim period.
34.A pension liability is reported when
(1/1 Points)
The defined benefit obligation exceeds the fair value of plan assets
The accumulated benefit obligation is less that the fair value of the plan assets
Cumulative other comprehensive income exceeds the fair value of the plan assets
The pension expense for the period is greater than the funding amount for the same period

35.Which statement is incorrect concerning a contingent liability?

(1/1 Points)
If the contingent liability is remote, no disclosure is required
A contingent liability is both probable and measurable
A contingent liability is disclosed only
A contingent liability is not recognized in the financial statements

36.The date to transition to PFRSs is

(1/1 Points)
the beginning of the earliest period for which an entity presents full comparative information under
PFRSs in its first PFRS financial statements.
the end of the earliest period for which an entity presents full comparative information under PFRSs
in its first PFRS financial statements.
the beginning of the first PFRS reporting period.
the end of the first PFRS reporting period.

37.One of Entity A’s delivery trucks had an accident on February 14, 20x2. The truck is totally wrecked
and is uninsured. Entity A’s December 31, 20x1 current-period financial statements were authorized for
issue on March 31, 20x2. Entity A asked you if it can write-off the carrying amount of the destroyed
truck from its December 31, 20x1 statement of financial position. What will you tell Entity A?
(1/1 Points)
Yes, go ahead. I will support you.
Yes, go ahead. Write-off the truck because the event is an adjusting event.
No. Don’t write-off the truck because the event is a non-adjusting event. You should, however,
disclose the event if you deem it to be material.
No. Don’t write-off the truck because the event is a non-adjusting event.
38.The statement of financial position of ABC Co. as of January 1, 20x4 included an allowance for bad
debts computed using the “aging of accounts receivable” method. The “over 120 days” category in the
aging schedule included a ₱200,000 receivable which was actually written off on January 5, 20x4 (the
20x3 financial statements were authorized for issue on March 1, 20x4). ABC Co. could not have foreseen
this event on December 31, 20x3. Does ABC Co. need to revise its previous estimate of bad debts as of
January 1, 20x4 (date of transition) on December 31, 20x5 (end of first PFRS reporting period)?
(0/1 Points)
Yes. Although, PFRS 1 does not require the adjustment, other PFRSs do.
No. The event should be ignored because it is within the scope of the previous GAAP and not the
PFRSs.
No. The receipt of the information on January 5, 20x4 is accounted for prospectively as a non-
adjusting event after the reporting period.
Yes. The receipt of the information on January 5, 20x4 is accounted for retrospectively as an
adjusting event after the reporting period.

39.Earnings per share shall be reported for all of the following except
(1/1 Points)
Net cash provided by operating activities
Net income
Discontinued operations
Continuing operations

40.Under the treasury share method, the number of potential ordinary share is equal to
(1/1 Points)
option shares actually issued during the year
assumed treasury shares acquired
option shares minus assumed treasury shares acquired
option shares