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Quiz UFS
Quiz UFS
TRUE or FALSE:
1. The income tax reported in the Statement of Financial Position may be different from the amount of income tax
required to be paid to the BIR.
2. Deferred Tax Expense is the difference of the net changes in deferred tax assets and deferred tax liabilities
during the period.
3. Temporary differences are items of income and expense which are included in either accounting profit or
taxable profit but will never be included in both. F
4. Taxable temporary difference multiplied by tax rate results to deferred tax liability.
5. Deductible temporary differences are those that result to future deductible amounts when the carrying amount of
the asset or liability is recovered or settled.
6. Under PAS 12, if the carrying amount is greater than the tax base, that means it is a deferred tax asset.
7. Professional fees arising directly from the acquisition of PPE are expensed immediately.
8. The theoretical basis of straight line depreciation is that the service value declines as a function of time rather
than use.
9. Depreciation is the amount by which the recoverable amount of an asset exceeds the carrying amount.
10.In PPE, residual value is the net estimated amount currently obtainable if the asset is at the end of the useful life.
MULTIPLE CHOICE:
11.Other terms for Accounting Profit (Loss) are the following except
a. Accounting Income c. Financial income
b. Progressive income d. Pretax income
12.It is the net profit or loss for a period before deducting tax expense
a. Accounting profit c. Gross profit
b. Taxable profit d. Net profit
13.It is the income tax payable in future periods in respect of taxable temporary differences.
a. Deferred tax liability c. Current tax liability
b. Deferred tax asset d. Current tax asset
14.Deferred tax asset is the amount of income taxes recoverable in future periods in respect of
a. Deductible temporary differences only
b. Permanent differences
c. Carryforward of unused tax losses
d. Deductible temporary differences and carryforward of unused tax losses.
15.Which of the following statements accurately describes an occurrence of a difference between accounting profit
and taxable income?
a. Revenues and expenses may be recognized in one reporting period for accounting purposes and in another
period for tax purposes.
b. The tax losses of prior years cannot be used to reduce the taxable income in later years.
c. Assets and liabilities may be recognized in one reporting period for accounting purposes and in another
period for tax purposes.
d. The tax base and carrying amount of assets and/or liabilities is the same.
16.It is the aggregate amount included in the determination of profit or loss for the period in respect of current tax
and deferred tax.
a. Taxable Temporary Differences c. Accounting Profit
b. Deferred Tax Assets d. Income Tax Expense
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17.Taxable Temporary differences arise when, except
a. The carrying amount of a liability is less than its tax base
b. Financial income (accounting profit) is greater than the taxable income (taxable profit)
c. Financial income (accounting profit) is less than the taxable income (taxable profit)
d. The carrying amount of an asset is greater than its tax base
23.Costs that are expensed immediately include all of the following except
a. Cost of opening a new facility
b. Cost of introducing a new product, including advertising and promotional
c. Cost of conducting business in a new location, including cost of staff training
d. Costs of testing whether the asset is functioning properly
24.The cost of an item of PPE that is acquired in an exchange with commercial substance is measured at
a. Fair value of the asset given up plus any cash or cash equivalent transferred
b. Fair value of the asset received plus any cash or cash equivalent transferred
c. Carrying amount of the asset given up plus any cash or cash equivalent transferred
d. Carrying amount of the asset received plus any cash or cash equivalent transferred
25.If payment for an asset is deferred beyond normal credit terms, the difference between the total payment and
cash price equivalent should be
a. Considered interest expense of the current year
b. Included as part of the cost of asset
c. Amortized as interest expense over the life of the asset
d. Amortized as interest expense over the credit period
26.It is a contract that transfers substantially all the risks and rewards incidental to ownership of an asset, although
title may or may not be transferred
a. Lease c. Operating lease
b. Finance lease d. Leases purchase
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27.The minimum lease payments include all of the following except
a. Rental payments over the lease term
b. Any amount guaranteed by the lessee
c. Payment required to exercise an option on the part of the lessee to purchase the asset at a price which is
expected to be sufficiently lower than the fair value at the exercise date
d. Cost for services and taxes to be paid by and reimbursed to the lessor.
28.It is that portion of the residual value of the leased asset, the realization of which by the lessor is not assured or
is guaranteed solely by a party related to the lessor.
a. Residual value
b. Guaranteed residual value
c. Unguaranteed residual value
d. Minimum lease payment
29.Under a sales type lease, what is the meaning of gross investment in the lease?
a. Present value of minimum lease payment
b. Present value of minimum lease payment and unguaranteed residual value
c. Absolute amount of the minimum lease payment
d. Aggregate of minimum lease payment and unguaranteed residual value
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