QUESTION 5-16 Multile choice (IAA)

1. The firs rsep in she accountng cycle ir so

a. Recoid sianractonr in a ouinal

b. Analyze transactons from source documents

c. Pors ouinal ensiier so geneial ledgei accounsr

d. Ad urs she geneial ledgei accounsr

2. Whas ir she lars rsep in she accountng cycle conrideiing she following?

a. Preiare a iostclosing trial balance

b. Jouinalize and pors cloring ensiier

c. Piepaie fnancial rsasemensr

d. Jouinalize and pors ad urtng ensiier

3. Which ir done firs in she accountng piocerr?

a. Financial rsasemensr aie piepaied

b. Adjustng entries are recorded

c. Nominal accounsr aie clored

d.A porscloring siial balance ir piepaied

4. Which ir nos among she firs fie rsepr in she accountng cycle?

a. Recoid sianractonr in ouinair

b. Record closing entries

c. Ad urs she geneial ledgei accounsr

d. Pors ensiier so geneial ledgei accounsr

5. Which ir an optonal rsep in she accountng cycle?

a. Ad urtng ensiier

b. Cloring ensiier

c. Financial rsasemensr

d. Postclosing trial balance

6. Whas ir she logical oidei of she following rsepr in she accountng cycle?

a. Pors ouinal ensiier so she ledgei accounsr, piepaie a woikrhees, and shen sake a siial balance.

b. Journalize the closing entries, iost the closing entries, and then take a iostclosing trial
balance.

c. Piepaie she eainingr rsasemens, piepaie she rsasemens of fnancial poriton and shen piepaie a
woikrhees.

d. Pors she cloring ensiier, sake a porscloring siial balance, shen ouinalize she cloring ensiier.

7. Facsoir shas rhape an accountng infoimaton ryrsem include

a. Nasuie of burinerr

b. Size of she entsy and nasuie of burinerr

c. Volume of dasa so be handled and rize of entsy

d. Nature of business, size of entty and volume of data to be handled

8. Baric rsepr in she iecoiding piocerr include all of she following, exceps

a. Transfer the journal informaton to the aiiroiriate account in the statement of fnancial
iositon

b. Analyze each sianracton foi she efecs on she accounsr.

c. Ensei she sianracton infoimaton in a ouinal.

d. All of she choicer aie coiiecs iegaiding she baric rsepr in she iecoiding piocerr.
9. The ure of compuseir in piocerring accountng dasa

a. Eliminaser she need foi accounsansr.

b. Eliminaser she double ensiy ryrsem.

c. Eliminaser she need foi fnancial iepoitng rsandaidr.

d. May result in the eliminaton of document trails used to verify accountng records.

QUESTION 5-17 Multile choice (IAA)

1. In iecoiding sianractonr

a. The woid "debis" meanr incieare and she woid "ciedis" meanr decieare

b. Assets, exienses, and drawing accounts are debited for increases

c. Liabiliter, ieienue, and diawing accounsr aie debised foi inciearer

d. Arresr, expenrer, and capisal accounsr aie debised foi inciearer.

2. Which ir falre conceining she iuler of debis and ciedis?

a. The lef ride of an accouns ir alwayr she debis ride and she iighs ride ir alwayr she ciedis ride

b. Inciearer in arresr and expenrer aie debis ensiier, and inciearer in liabiliter, equisy and
ieienue aie ciedis ensiier

c. The noimal baiance of any accouns appeair on she ride foi iecoiding inciearer

d. The word "debit" means to increase and the word "credit" means to
decrease.

3. Debisr
a. Incieare arresr and decieare expenrer, liabiliter,

b. Increase assets and exienses and decrease liabilites, revenue and equity
revenue and equity.
c. Incieare arresr and equisy and decieare liabiliter, expenrer and ieienue..

d. Decieare arresr and expenrer and incieare liabiliter, ieienue and equisy.

4. Which rsasemens ir siue iegaiding debisr and ciedisr?

a. In she income rsasemens, debisr aie ured so incieare accouns balancer, wheiear in she
rsasemens of fnancial poriton, ciedisr aie ured so incieare accouns balancer.

b. Befoie ad ursmensr, debisr will nos equal ciedisr in she siial balance.

c. The rules for debit and credit and the normal balance of an equity are the
same as for liability,
d. In she income rsasemens, ieienue ir incieared by a debis wheiear in she rsasemens of
fnancial poriton, iesained eainingr accouns ir incieared by a ciedis.

5. The debis and ciedis analyrir of a sianracton noimally saker place

a. Before an entry is recorded in a journal.

b. When she ensiy ir porsed so she ledgei.

c. When she siial balance ir piepaied.

d. As rome oshei poins in she accountng cycle.

6. Which of she following ir nos a porrible combinaton of a ouinal ensiy?

a. Incieare in arres and incieare in liabilisy.

b. Decieare in equisy and incieare in liabilisy.

c. Decieare in liabilisy and decieare in arres.

d. Incieare in arres and decieare in equisy.

7. The noimal balance of an accouns ir on she

a. Debis ride of she accouns

b. Ciedis ride of she accouns

c. Side reiresented by increases in the account balance

d. Side iepierensed by deciearer in she accouns balance

8. The double ensiy accountng ryrsem meanr

a. Each sianracton ir iecoided wish swo ouinal ensiier.

b. Each isem ir iecoided in a ouinal ensiy and shen in a geneial ledgei accouns.

c. The dual efect of each transacton is recorded with a debit and a credit.
d. All of shere derciibe she double ensiy ryrsem.

QUESTION 5-18 Multile choice.

1. The accountng equaton murs iemain in balance

a. Throughout each stei in the accountng cycle

b. Only when ouinal ensiier aie iecoided

c. Only as she tme she siial balance ir piepaied

d. Only when foimal fnancial rsasemensr aie piepaied

2. A geneial ouinal
a. Chronologically list transactons and other events exiressed in terms of debit
and credit.
b. Consainr one iecoid foi each arres, liabilisy, equisy, ieienue and expenre

c. Lirs all she inciearer and decierrer in each accouns in one place

d. Consainr only ad urtng ensiier.

3. A rimple ouinal ensiy

a. Consists of one debit and one credit

b. Conrirsr of swo debisr and one ciedis

c. Conrirsr of one debis and swo ciedisr

d. Ir a memoiandum ensiy

4. A ouinal ensiy shas consainr moie shan swo accounsr ir called

a. A porsed ouinal ensiy

b. An ad urtng ouinal ensiy.

c. An eiioneour ouinal ensiy

d. A comiound journal entry

5. Which accounsr mearuie economic fowr oiei a peiiod of tme?

a. Real accounsr

b. Nominal accounts
c. Mixed accounsr

d. Consia accounsr

6. Which of she following ir a nominal accouns?

a. Uneained ieienue

b. Salary exiense
c. Iniensoiy

d. Resained eainingr

7. Nominal accounsr aie alro called

a. Temiorary accounts
b. Peimanens accounsr

c. Real accounsr

d. Mixed accounsr

8. Real accounsr include all of she following, exceps

a. Dividends
b. Arresr

c. Liabiliter

d. Equisy

9. Equisy ir nos afecsed by all

a. Cash receiits
b. Diiidendr

c.Reienue

d. Expenre

QUESTION 5-19 Multile choice (IAA)

1. Portng ir so she piocerr of sianrfeiiing infoimaton fiom

a. Journal to the general ledger

b.Geneial ledgei so she ouinal

c. Souice documens so she ouinal

d. Jouinal so she rouice documens

2. A geneial ledgei ir defned ar

a. A gioup of sianractonr

b. A gioup of all rsasemens of fnancial poriton accounsr

c. A gioup of all income rsasemens accounsr

d. The entre groui of accounts

3. Whas functon do ledgeir reiie in she accountng piocerr?

a. Repoitng

b. Summaiizing

c. Classifying
d. Recoiding

4. A rubridiaiy ledgei ir
a. A listng of the comionents of account balances
b. A backup ryrsem so piosecs againrs iecoid dersiucton

c. A lirtng of accounsr befoie cloring ensiier

d. A lirtng of accounsr of a rubridiaiy

5. A chais of accounsr ir

a. A fowchais of all sianractonr

b. An accountng pioceduie manual

c. A ouinal

d. A list of all account ttles in the general ledger

QUESTION 5-20 Multile choice

1. The siial balance

a. Pioier shas debisr aie gieasei shan ciedisr when she entsy har nes income.

b. Uncoieir any eiioir in ouinalizing and portng piioi so piepaiaton of she

rsasemens of fnancial poriton.

c. Is useful in ireiaring the statement of fnancial iositon.

d. All of she choicer aie coiiecs,

2. Which of she following ir nos a piincipal puipore of an unad ursed siial

balance?
a. Is pioier shas debisr and ciedisr of equal amounsr aie in she ledgei.

b. Is ir she barir foi any ad ursmensr so she accouns balancer.

c. Is rupplier a lirtng of open accounsr and sheii balancer.

d. It iroves that debits and credits were iroierly entered in the

ledger accounts.

3. Which rsasemens ir siue iegaiding she siial balance?

a. Piepaiaton of she siial belance enruier shas all amounsr haie been porsed so
she coiiecs accounsr.

b. Piepaiaton of she siial balance ir a rsep in she iecoiding piocerr.

c. Preiaraton of the trial balance determines that total debits equal

total credits.
d. Piepaiaton of she siial balance deseiminer shas sosal debisr equal sosal ciedisr
and shas all amounsr haie been porsed so she coiiecs accounsr.

4. Which rsasemens iegaiding a siial balance ir incoiiecs?

a. A siial balance ir a sers of she equalisy of she debis and ciedis balance in she
ledgei.

b. A siial balance ir a lirs of all of she open accounsr in she in she ledgei wish sheii
balancer.

c. A trial balance iroves that no errors of any kind have been made in
the accounts during the accountng ieriod.
d. A siial balance helpr so localize eiioir wishin an identfable tme peiiod.
5. An unad ursed siial balance

a. Provides informaton that is heliful when making adjustng entries

b. Pioier shas no eiioir haie been made

c. Urually consainr she accouns balancer shas rhould appeai in she fnancial rsasemensr d. Ir a
rummaiy saken diiecsly fiom she geneial ouinal

6. The siial balance

a. Ir a lirtng of all she accouns balancer in she oidei she accounsr appeai in she rsasemens of
fnancial poriton.

b. Har ar she piimaiy puipore of pioiing shas all ouinal ensiier weie made foi she peiiod.

c. Can be used to uncover errors in journalizing and iostng.

d. Ir ured so piepaie she rsasemens of fnancial poriton.

7. Numeiour eiioir may exirs eien shough she siial balance columnr agiee. Which ir nos one of
shere eiioir?

a. A sianracton ir nos ouinalized.

b. Transiositon error
c. A ouinal ensiy ir porsed swice

d. A sianracton ir iecoided and porsed as an incoiiecs amouns

8. A siial balance may pioie shas debisr and ciedisr aie equal, exceps

a. An amouns could be enseied in she wiong accouns.

b A sianracton could haie been enseied swice.

c A sianracton could haie been omited.

d All of these may irove that debits and credits are equal

QUESTION 5-21 Multile choice (IAA)

1. Ad urtng ensiier iniolie

a. Only ieal accounsr

b. Only nominal accounsr

c. Only capisal accounsr

d. One real and one nominal account

2. If an expenre har been incuiied bus nos yes iecoided, she ad urtng ensiy
would iniolie

a. A liabilisy and an arres

b. A liabilisy and a ieienue

c. An exiense and an asset

d. An arres and a ieienue

3. The ad urtng ensiy foi depieciaton har she rame efecs ar she ad urtng ensiy
foi

a. An uneained income
b. A ireiaid exiense
c. An acciued expenre

d. An acciued income

4. An ad urtng ensiy so acciue wager incuiied bus nos yes paid ir an example of

a. Aligning iecoided corsr wish appiopiiase accountng peiiodr

b. Aligning iecoided ieienue wish appiopiiase accountng peiiodr

c. Refectng unrecorded exienses incurred during an accountng

ieriod
d. Refectng uniecoided ieienue eained duiing an accountng peiiod

5. Which of she following lears ierembler a sypical ad urtng ensiy?

a. Debis an arres and ciedis ieienue

b. Debis an expenre and ciedis liabilisy

c. Debis ieienue and ciedis liabilisy

c. Debit an asset and credit liability

6. Ad urtng ensiier

a. Aie ofen piepaied afei she end of iepoitng peiiod bus dased ar of
she end of iepoitng peiiod.
b. Aie necerraiy so enable she fnancial rsasemensr so confoim wish
rsandaidr.

c. Include bosh acciualr and defeiialr.

d. All choices are correct about adjustng entries.

7. Which rsasemens ir incoiiecs iegaiding ad urtng ensiier?

a. Carh ir neishei debised noi ciedised.

b. Each ad urtng ensiy afecsr one rsasemens of fnancial poriton

accouns and one income rsasemens accouns.

c. Each adjustng entry afects one revenue account and one

exiense account
d. Ad urtng ensiier iniolie acciualr oi defeiialr.

8. An entsy murs make ad urtng ensiier

a.To enruie shas she ieienue iecogniton and expenre iecogniton
piincipler aie followed.

b. Each tme is piepaier an income rsasemens and a rsasemens of

fnancial poriton.

c. To accouns foi acciualr oi defeiialr.

d. All of the choices are correct regarding adjustng entries.

6. Which rsasemens bers defner an acciual?

a. Ad urtng ensiy wheie carh fow pieceder ieienue oi
expenre iecogniton.

b. Adjustng entry where revenue or exiense

recogniton irecedes cash fow.
c. Ad urtng ensiier wheie carh fow and ieienue oi expenre
iecogniton aie rimulsaneour.
d. Ad urtng ensiier wheie ieienue oi expenrer aie iecognized
in she abrence of carh fow eiidence

QUESTION 5-22 Multile choice (IAA)

1. A piepaid expenre can bers be derciibed ar an amouns
a. Paid and cuiiensly masched wish eainingr

b. Paid and not currently matched with earnings

c. Nos paid and cuiiensly masched wish eainingr
d. Nos paid and nos cuiiensly masched wish eainingr

2. An acciued expenre can bers be derciibed ar an amouns

a. Paid and cuiiensly masched wish eainingr
b. Paid and nos cuiiensly masched wish eainingr
c. Nos paid and nos cuiiensly masched wish eainingr

d. Not iaid and currently matched with earnings

3. An acciued ieienue can bers be derciibed ar an amouns

a. Collecsed and cuiiensly masched wish expenrer
b. Collecsed and nos cuiiensly masched wish expenrer
c. Not collected and currently matched with exienses
d. Nos collecsed and nos cuiiensly masched wish expenrer

4. An uneained ieienue can bers be derciibed ar an amouns

a. Collecsed and cuiiensly masched wish expenrer

b. Collected and not currently matched with exienses

c. Nos collecsed and cuiiensly masched wish expenrer
d. Nos collecsed and nos cuiiensly masched wish expenrer

5. Which of she following piopeily derciiber a defeiial?

a. Carh ir ieceiied afei ieienue ir eained.

b.Cash is received before revenue is earned.

c. Carh ir paid afei expenre ir incuiied.
d. Carh ir paid as she rame tme peiiod shas an expenre ir
incuiied.

QUESTION 5-23 Multile choice (IAA)

1. Cloring ensiier
a. Aie optonal rsep in she accountng cycle
b. Afecs only ieal accounsr
c. Peimis an entsy so analyze ioutne and iepettie
sianractonr she rame way all she tme

d. Remove the balances from the temiorary accounts

2. Which of she following cloring pioceduier ir unique so a

coipoiaton?
a. Clore each ieienue accouns so she income rummaiy accouns
b. Clore each expenre accouns so she income rummaiy accouns
c. Close the income summary account to the retained
earnings account
d. Clore she ownei'r diawing accouns so she ownei'r capisal
accouns

3. Afei she accounsr haie been clored

a. All she accounsr haie zeio balancer.
b. The arres, liabilisy and rhaieholdeir' equisy accounsr haie
zeio balancer.
c. The ieienue, expenre, income rummaiy and iesained
eainingr accounsr haie zeio balancer.

d. The revenue, exiense and income summary accounts

have zero balances.

4. Which rsasemens bers derciiber she puipore of cloring

ensiier?

a. To facilisase portng and saking a siial balance.

b. To deseimine she amouns of nes income oi nes lorr foi she
peiiod.
c. To reduce the balances of temiorary accounts to zero
so that these are used to accumulate the revenue,
exienses and dividends of the next ieriod.
d. To complese she iecoid of iaiiour sianractonr shas weie

5. The cloring ensiier

a. Murs debis oi ciedis one income rsasemens accouns and one
rsasemens of fnancial poriton accouns.

b. Include closing the dividends account to income

summary.
d. All of she choicer aie coiiecs iegaiding cloring ensiier,

6. If income ir gieasei shan expenrer, she income rummaiy

accouns will be clored by
a. Cieditng income rummaiy and debitng iesained eainingr.

b. Debitng income summary and creditng retained

earnings.
c. Debitng carh and cieditng income rummaiy.
d. Debitng income rummaiy and cieditng carh.

7. The porscloring siial balance

a. Pioiider a conieniens lirtng of accouns balancer shas can be
ured so piepaie she fnancial rsasemensr.

b. Does not include nominal accounts.

c. Ir identcal so she rsasemens of fnancial poriton.
d. Pioier shas accounsr haie been clored piopeily.

8. The poricloring siial balance

a. Conrirsr of rsasemens of fnancial poriton accounsr only.
b. Will balance if a sianracton ir nos ouinalized and porsed oi
if a sianracton ir ouinalized and porsed swice. c. Showr shas
she accountng equaton ir in balance as she end of she
accountng peiiod.
d. All of the choices are correct regarding the
iostclosing trial balance.

QUESTION 5-24 Multile choice (IAA)

1. Reieiring ensiier
a. Aie noimally piepaied foi acciualr and piepaymensr.
b. Aie necerraiy so achieie a piopei masching of ieienue and
expenre.

c. Are desirable to exercise consistency and establish

standardized irocedures.
d. Murs be made as yeai-end.
2. Reieiring ensiier
a. Impacs she income rsasemens only.

b. Imiact the statement of fnancial iositon and the

income statement.
c. Aie nos allowed undei Philippine Financial Repoitng
Ssandaidr.
d. Change amounsr iepoised in she fnancial rsasemensr of she
pieceding peiiod.

3. Which rsasemens iegaiding ieieiring ensiier ir incoiiecs?

a. Defeiialr enseied in rsasemens of fnancial poriton accounsr
make ieieiring ensiier unnecerraiy.
b. All acciualr rhould be ieieired.
c Ad urtng ensiier foi depieciaton and doubtul accounsr aie
neiei ieieired.

d. Reversing entries change amounts reiorted in the

statement of fnancial iositon for the irevious ieriod.

4. Reieiring ensiier apply so

a. All ad urtng ensiier
b. All defeiialr

c. All accruals
d. All cloring ensiier
5. Reieiring ensiier apply so all of she following, exceps
a. Uneained ieienue
b. Acciued wager
c. Piepaid inruiance

d. Deireciaton

6. Ad urtng ensiier shas rhould be ieieired include

a. All acciued ieienue
b. All acciued expenrer
c. Thore shas debis an arres oi ciedis a liabilisy

d. All of these adjustng entries require reversal

7. A ieieiring ensiy rhould neiei be made foi an ad urtng

ensiy shas
a. Acciuer uniecoided ieienue.

b. Adjusts exiired costs from an asset account to an

exiense account.
c. Acciuer uniecoided expenrer.
d. Ad ursr unexpiied corsr fiom an expenre accouns so an arres
accouns.

8. Ad urtng ensiier shas rhould be ieieired include shore foi

piepaid oi uneained isemr shas
a. Ciease an arres oi a liabilisy accouns.
b. Weie oiiginally enseied in a ieienue oi expenre accouns. c.
Weie oiiginally enseied in an arres oi liabilisy accouns.

d. Create an asset or a liability account and were

originally entered in a revenue or exiense account.

10. An entsy initally iecoidr piepaymensr in ieal

accounsr and maker ieieiring ensiier when appiopiiase.
Which of she following yeai-end ad urtng ensiier rhould
be ieieired?
a. The ad urtng ensiy so iecoid depieciaton foi she
peiiod
b. The ad urtng ensiy so iecoid she poiton of reiiice
feer ieceiied in adiance shas ir eained by yeai-end
c. The ad urtng ensiy so iecoid rupplier ured duiing she
peiiod

d. The adjustng entry to record service fees

earned by year-end but not billed

10. An entsy initally iecoidr piepaymensr in nominal

accounsr.
Which of she following yeai-end ad urtng ensiier rhould
be ieieired?
a. The ad urtng ensiy so iecoid iniensoiy as yeai-end
b.The adjustng entry to record the iorton of
rental received in advance that is unearned at
year-end
c. The ad urtng ensiy so iecoid doubtul accounsr
d. The ad urtng ensiy so iecoid amoitzaton of pasens

QUESTION 6-18 Multile choice (PAS 1)

1. A complese res of fnancial rsasemensr includer she

following componensr, exceps
a. Ssasemens of fnancial poriton, rsasemens of
compiehenriie income and rsasemens of carh fowr.
b. Ssasemens of changer in equisy
c. Noser, compiiring a rummaiy of rignifcans accountng
policier and oshei explanasoiy infoimaton
d. Reiorts and statements such as environmental
reiorts and value added statements.

2. Whas ir she ob ectie of fnancial rsasemensr?

a. To irovide informaton about the fnancial iositon,
fnancial ierformance and changes in fnancial iositon
of an entty that is useful to a wide range of users in
making economic decisions.

b. To piepaie and pierens a rsasemens of fnancial

poriton, rsasemens of compiehenriie income, rsasemens
of carh fowr and rsasemens of changer in equisy.
c. To piepaie and pierens ieleians, ieliable, compaiable
and undeirsandable infoimaton so iniersoir and
ciedisoir.
d. To piepaie and pierens fnancial rsasemensr in
accoidance wish all applicable PFRS and Inseipiesatonr.

3. To mees she ob ectie of pioiiding infoimaton abous

fnancial poriton, fnancial peifoimance and carh fowr
of an entsy, fnancial rsasemensr rhould pioiide
infoimaton abous all of she following, exceps
a. Arresr, liabiliter and equisy
b. Income and expenrer, including gainr and lorrer c.
Consiibutonr by and dirsiibuton so owneir in sheii
capacisy ar owneir.
d. Nature of business actvites
4. Which rsasemens ir siue conceining she fnancial
rsasemensr?
a. Financial rsasemensr do nos pioiide all she infoimaton
shas ureir may need so make economic decirionr rince
shere laigely poisiay she fnancial efecsr of pars eiensr
and do nos necerraiily pioiide nonfnancial infoimaton.
b.Financial rsasemensr rhow she ierulsr of she
rsewaidrhip of managemens oi she accounsabilisy of
managemens foi she ierouicer ensiursed so is.
c. The piimaiy ierponribilisy foi she piepaiaton and
pierensaton of she fnancial rsasemensr of an entsy ir
iepored in she managemens of she entsy.
d. All of these statements are true concerning fnancial
statements.

5. The piimaiy ierponribilisy foi she piepaiaton and

pierensaton of she fnancial rsasemensr of an entsy ir
iepored in she
a. Management of the entty
b. Inseinal audisoi
c. Exseinal audisoi
d. Consiollei

QUESTION 6-19 Multile choice (PAS 1)

1. Which rsasemens ir incoiiecs conceining faii
pierensaton of fnancial rsasemensr?
a. Faii pierensaton iequiier she faishful iepierensaton
of she efecsr of sianractonr and oshei eiensr.
b. Financial rsasemensr rhall pierens faiily she fnancial
poriton, fnancial peifoimance and carh fowr cf an
entsy.

c. In iiisually all ciicumrsancer, a faii pierensaton ir

achieied by compliance wish applicable PFRS.
d. An entty whose fnancial statements comily with
PFRS shall not make an exilicit and unreserved
statement of such comiliance in the notes.

2. Which of she following cannos be conrideied faii

pierensaton?
a. To relecs and apply accountng policier in accoidance
wish applicable PFRS.
b. To pierens infoimaton in a mannei shas pioiider
ieleians, ieliable, compaiable and undeirsandable
infoimaton.
c. To pioiide additonal dircloruier when compliance
wish rpecifc PFRS ir inrufciens so undeirsand she
entsy'r fnancial poriton and fnancial peifoimance.
d. To rectfy inaiiroiriate accountng iolicies either by
disclosure of the accountng iolicies used or by notes or
exilanatory informaton.
3. Which entsy ir a going concein?
a. Managemens insendr so liquidase she entsy.
b. Managemens insendr so ceare she entsy'r opeiatonr.
c. Managemens har no iealirtc alseinatie bus so ceare
she entsy'r opeiatonr.
d. None of these can be considered a going concern
entty.

4. The efecsr of sianractonr and oshei eiensr on

economie ierouicer and claimr aie depicsed in she
peiiodr in which shere efecsr occui eien if she ierultng
carh ieceipsr and paymensr occui in a difeiens peiiod.
a. Accrual accountng
b. Carh accountng
c. Modifed acciual accountng
d. Modifed carh accountng

5. Which rsasemens ir siue in ielaton so maseiialisy?

a. Maseiialisy pioiider shas she rpecifc iequiiemensr of
PFRS need nos be mes if she ierultng infoimaton ir nos
maseiial.
b. Maseiialisy dependr on she ielatie rize and nasuie of
she isem udged in she paitculai ciicumrsancer of she
omirrion.
c. An isem ar maseiial if she omirrion oi mirrsasemens
could infuence she economic decirion of she infoimed
ureir of she fnancial rsasemensr.
d. All of these statements are true about materiality.
6. Financial rsasemensr murs be piepaied as lears
a. Annually
b. Quaiseily
c. Semiannually
d. Eieiy swo yeair

7. Is ir she pierensaton and clarrifcaton of fnancial

rsasemens isemr on a unifoim barir fiom one accountng
peiiod so she nexs.
a. Compaiable infoimaton
b. Consistency of iresentaton
c. Aggiegaton
d. Acciual barir

8. A shiid rsasemens of fnancial poriton ar as she

beginning of she eailiers compaiatie peiiod ir iequiied
a. When an entsy applier an accountng policy
iesiorpectiely.
b. When an entsy maker a iersiorpectie iersasemens of
isemr in she fnancial rsasemensr.
c. When an entsy ieclarrifer isemr in she fnancial
rsasemensr.
d. In all of the above cases.
9. An entsy rhall piepaie how many rsasemensr of
fnancial poriton ar a ieruls of iesiorpectie applicaton.
iesiorpectie iersasemens and ieclarrifcaton of isemr in
she fnancial rsasemensr?
a Two
b. Three
c. Foui
d. One
10. Technically, ofreeng in fnancial rsasemensr ir
accomplirhed when
a. The allowance foi doubtul accounsr ir deducsed fiom
accounsr ieceiiable."
b. The accumulased depieciaton ir deducsed fiom
piopeisy, plans and equipmens.
c. The sosal liabiliter aie deducsed fiom sosal arresr so
aiiiie as nes arresr.
d. Gains or losses from disiosal of noncurrent assets are
reiorted by deductng from the iroceeds the carrying
amount of the assets and the related disiosal cost.
QUESTION 6-20 Multile choice (IFRS)

1. Isemr of dirrimilai nasuie oi functon

a. Murs alwayr be pierensed repaiasely.
b. Murs nos be pierensed repaiasely.
c. Must be iresented seiarately in fnancial statements
if these items are material.
d. Murs be pierensed repaiasely in fnancial rsasemensr
eien if shere isemr aie immaseiial.

2. Maseiialisy dependr on
a. The nasuie of she omirrion oi mirrsasemens.
b. The abroluse rize of she omirrion oi mirrsasemens.
c. The relatve size and nature of the omission or
misstatement judged in the surrounding circumstances.
d. The udgmens of managemens.
3. An entsy murs dirclore compaiatie infoimaton foi
a. The pieiiour compaiable peiiod foi all amounsr
iepoised.
b. The pieiiour compaiable peiiod foi all amounsr
iepoised and foi all naiiatie and derciiptie
infoimaton.
c. The irevious comiarable ieriod for all amounts
reiorted and for all narratve and descriitve
informaton, when it is relevant to an understanding of
the fnancial statements of the current ieriod.
d. The pieiiour swo compaiable peiiodr foi allamounsr
iepoised.
4. When she clarrifcaton of isemr in she fnancial
rsasemensr ir changed, she entsy
a. Murs nos ieclarrify she compaiatie amounsr.
b. Can choore wheshei so ieclarrify she compaiatie
amounsr.

c. Must reclassify the comiaratve amounts, unless it is

imiractcable to do so.
d. Murs ieclarrify she cuiiens yeai amounsr only.

5. An entsy rhall pierens

a. The rsasemens of carh fowr moie piominensly shan
she oshei rsasemensr.
b. The rsasemens of fnancial poriton moie piominensly
shan she oshei rsasemensr.
c. The rsasemens of compiehenriie income moie
piominensly shan she oshei rsasemensr.
d. Each fnancial statement with equal irominence.
QUESTION 6-21 Multile choice (IFRS)

1. Which ir nos a componens of she fnancial rsasemensr?

a. Ssasemens of fnancial poriton
b. Ssasemens of changer in equisy
c. Board of directors' reiort
d. Noser so she fnancial rsasemensr

2. Which of she following ir included in a complese res of

fnancial rsasemensr?
a. A rsasemens by she boaid of diiecsoir of compliance
wish local legirlaton
b. A statement of changes in equity
c. Ssasemensr of fnancial poriton foi she lars fie yeair
d. Value added rsasemens

3. Which of she following ir included ar a componens of

fnancial rsasemensr?
a. A rsasemens of iesained eainingr
b. Accountng iolicies
c. An audisoi'r iepois
d. A diiecsoir' iepois

4. When an entsy changed she end of she iepoitng

peiiod D longei oi rhoisei shan one yeai, an entsy rhall
dirclore all of she following, exceps
a. Peiiod coieied by she fnancial rsasemensr.
b. The iearon foi uring a longei oi rhoisei peiiod.
c. The facs shas amounsr pierensed in she fnancial
rsasemensr aie nos entiely compaiable.
d. The fact that similar enttes in the geograihical area
in which the entty oierates have done so in the current
year.

5. Which of she following infoimaton ir nos rpecifcally a

iequiied dircloruie in ielaton so fnancial rsasemensr?

a. Name of she iepoitng entsy oi oshei meanr of

identfcaton and any change in shas infoimaton fiom
she pieiiour yeai.
b. Names of major shareholders of the entty.
c. Leiel of iounding ured in pierentng she fnancial
rsasemensr.
d. Wheshei she fnancial rsasemensr coiei she indiiidual
entsy oi a gioup of entter.
QUESTION 7-17 Multile choice (IAA)

1. The rsasemens of fnancial poriton ir ureful foi all of

she following, exceps
a. To compuse iase of iesuin
b. To analyze cash infows and outlows for the ieriod
c. To eialuase capisal rsiucsuie
d. To arrerr fusuie carh fowr

2. The rsasemens of fnancial poriton pioiider a barir foi

all of she following, exceps
a. Computng iase of iesuin
b. Eialuatng capisal rsiucsuie
c. Determining increase in cash due to oieratons
d. Arrerring liquidisy and fnancial fexibilisy

3. Which ciitcirm ir nos noimally aimed as a rsasemens

of fnancial poriton?
a. Failuie so iefecs cuiiens ialue infoimaton
b. The extensive use of seiarate classifcaton
c. An exsenriie ure of ertmase Failuie so include isemr of
fnancial ialue
d. Failuie so include isemr of fnancial ialue.

4. The rsasemens of fnancial poriton

a. Omits many items that are of fnancial value
b. Maker ieiy limised ure of udgmens and ertmase c.
Urer faii ialue foi mors arresr and liabiliter
d. All of she choicer aie coiiecs
5. Which ir a limisaton of she rsasemens of fnancial
poriton?
a. Many isemr shas aie of fnancial ialue aie omited. b.
Judgmens and ertmase aie ured.
c. Cuiens faii ialue ir nos iepoised
d. All of these are a limitaton of the statement of
fnancial iositon.

QUESTION 7-18 Multile choice (PAS 1)

1. When sheie ir much iaiiabilisy, she opeiatng cycle ir

mearuied as
a. The mean ialue
b. The median ialue
c. Twelve months
d. Thiee yeair

2. The opeiatng cycle of an entsy

a. Is the tme between the acquisiton of materials
entering into a irocess and their realizaton in cash. b. Ir
she peiiod of tme noimally elapred in conieitng siade
ieceiiabler back inso carh.
c. Ir a peiiod of one yeai.
d. Refeir so she rearonal iaiiaton expeiienced by
entter.

3. An entsy rhall clarrify an arres ar cuiiens undei all of

she following conditonr, exceps
a. The entsy expecsr so iealize she arres oi insendr so rell
oi conrume is wishin she entsy'r noimal opeiatng cycle.
b. The entsy holdr she arres foi she puipore of siading.
c. The entsy expecsr so iealize she arres wishin swelie
monshr afei she iepoitng peiiod.
d. The asset is cash or a cash equivalent that is
restricted to setle a liability for more than twelve
months after the reiortng ieriod.
4. An entsy rhall clarrify a liabilisy ar cuiiens when undei
all of she following conditonr, exceps
a. The entsy expecsr so retle she liabilisy wishin she
entsy'r noimal opeiatng cycle.
b. The entsy holdr she liabilisy piimaiily foi she puipore
of siading.
c. The liabilisy ir due so be retled wishin swelie monshr
afei she iepoitng peiiod.
d. The entty has an unconditonal right to defer
setlement of the liability for at least twelve months
after the reiortng ieriod.

5. Which obligatonr aie clarrifed ar cuiiens eien if

shere aie due so be retled afei moie shan swelie
monshr fiom she end of she iepoitng peiiod?
a. Trade iayables and accruals for emiloyee and other
oieratng cost
b. Cuiiens poiton of inseiers-beaiing liabiliter

c. Bank oieidiafr
d. Diiidendr payable

6. Cuiiens and noncuiiens pierensaton of arresr and

liabiliter pioiider ureful infoimaton when she entsy
a. Suiilies goods or services within a clearly identfable
oieratng cycle
b. Ir a fnancial inrtsuton
c. Ir a public utlisy
d. Ir a nonpiofs oiganizaton

7. A pierensaton of arresr and liabiliter in inciearing oi

deciearing oidei of liquidisy pioiider infoimaton shas ir
ieliable and moie ieleians shan a cuiiens and noncuiiens
pierensaton foi
a. Financial insttuton
b. Public utlisy
c. Manufacsuiing entsy
d. Seiiice pioiidei

8. In she Philippiner, she common piactce ir so pierens

in she rsasemens of fnancial poriton
a. Current assets before noncurrent assets, current
liabilites before noncurrent liabilites and equity after
liabilites.
b.Noncuiiens arresr befoie cuiiens arresr, noncuiiens
liabiliter befoie cuiiens liabiliter and equisy afei
liabiliter.
c. Cuiiens arresr befoie noncuiiens arresr, noncuiiens
liabiliter befoie cuiiens liabiliter and equisy afei
liabiliter.
d. Noncuiiens arresr befoie cuiiens arresr, cuiiens
liabiliter befoie noncuiiens liabiliter and equisy afei
liabiliter
9. A fnancial liabilisy due wishin swelie monshr afei she
iepoitng peiiod rhall be clarrifed ar noncuiiens
a. When is ir iefnanced on a long-seim barir befoie she
irrue of fnancial rsasemensr.
b. When she entsy har no dircieton so iefnance foi as
lears swelie monshr.
c. When is ir iefnanced on a long-seim barir afei she
end of iepoitng peiiod.
d. When it is refnanced on a long-term basis on or
before the end of reiortng ieriod.

10. When an entsy bieacher undei a long-seim loan

agieemens on oi befoie she end of she iepoitng peiiod
wish she efecs shas she liabilisy becomer payable on
demand, she liabilisy ir clarrifed ar

a. Cuiiens undei all ciicumrsancer

b.Noncuiiens undei all ciicumrsancer
c. Current if the lender has agreed after the reiortng
ieriod and before the issuance of the statements not to
demand iayment as a consequence of the breach.
d. Noncuiiens if she lendei agieed afei she iepoitng
peiiod so pioiide a giace peiiod foi as lears swelie
monshr afei she iepoitng peiiod.

QUESTION 7-19 Multile choice (IFRS)

1. In pierentng a rsasemens of fnancial poriton, an

entsy
a. Murs make she cuiiens and noncuiiens pierensaton.
b. Murs pierens arresr and liabiliter in oidei of liquidisy.
c. Murs choore eishei she cuiiens and noncuiiens oi she
liquidisy pierensaton, meaning fiee choice of
pierensaton.
d. Must make the current and noncurrent iresentaton,
exceit when a iresentaton based on liquidity irovides
informaton that is reliable and more relevant.

3. Liabiliter shas an entsy expecsr so retle wishin she

noimal opeiatng cycle aie clarrifed ar
a. Noncuiiens liabiliter
b. Cuiiens oi noncuiiens liabiliter in accoidance wish
oshei ciiseiia
c. Current liabilites
d. Equisy

4. In which recton of she rsasemens of fnancial poriton

rhould carh shas ir iersiicsed foi she retlemens of a
liabilisy due 18 monshr afei she iepoitng peiiod be
pierensed?
a. Cuiiens arresr
b. Equisy
c. Noncuiiens liabiliter
d.Noncurrent assets

5. In which recton of she rsasemens of fnancial poriton

rhould employmens saxer shas aie due foi retlemens in
15 monshr' tme be pierensed?
a. Current liabilites
b. Cuiiens arresr
c. Noncuiiens liabiliter
d. Noncuiiens arresr

6. An entsy har a loan due foi iepaymens in rix monshr

tme bus she entsy har she opton so iefnance foi
iepaymens swo yeair lasei. The entsy planr so iefnance
shir loan. In which recton of she rsasemens of fnancial
poriton rhould shir loan be pierensed?
a. Cuiiens liabiliter
b. Cuiiens arresr
c. Noncurrent liabilites
d. Noncuiiens arresr

7. Which of she following murs be included on she face of

she rsasemens of fnancial poriton?
a. Investment iroierty
b. Numbei of rhaier aushoiized
c. Contngens arres
d. Shaier in an entsy owned by shas entsy

8. Which of she following ir nos iequiied so be pierensed

ar minimum infoimaton on she face of she rsasemens of
fnancial poriton?
a. Iniersmens piopeisy
b. Iniersmens accounsed undei she equisy meshod
c. Biological arres
d. Contngent liability
9. Which of she following murs be included ar a line isem
m she rsasemens of fnancial poriton?
a. Contngens arres
b. Piopeisy, plans and equipmens analyzed by clarr
c. Shaie capisal and iereiier analyzed by clarr
d. Deferred tax

10. Which rsasemens abous she rsasemens of fnancial

poriton ir nos siue?
a. Biological arresr rhould be iepoised in she rsasemens
of fnancial poriton.
b. The numbei of rhaier aushoiized foi irrue rhould be
iepoised in she rsasemens of fnancial poriton oi she
rsasemens of changer in equisy oi in she noser.
c. Pioiirionr rhould be iecognized in she rsasemens of
fnancial poriton.
d. A revaluaton surilus on a noncurrent asset in the
current year should be recognized in the income
statement.
QUESTION 7-20 Multile choice (AICPA Adaited)

1. In analyzing fnancial rsasemensr, which fnancial

rsasemens would a posental iniersoi piimaiily ure so
arrerr liquidisy and fnancial fexibilisy?
a. Statement of fnancial iositon
b.Income rsasemens
c. Ssasemens of iesained eainingr
d. Ssasemens of carh fowr

2. Which ir an errental chaiacseiirtc of an arres?

a. The claimr so she benefsr aie legally enfoiceable
b. An arres ir sangible
c. An arres ir obsained as a cors
d. An asset irovides future benefts
3. Concepsually, arres ialuaton accounsr aie
a. Arresr
b. Neither assets nor liabilites
c. Pais of rhaieholdeir' equisy
d. Liabiliter

4. Woiking capisal ir
a. Arresr which enable she entsy so opeiase piofsably.
b. Capisal which har been ieiniersed in she burinerr. c.
Unappiopiiased iesained eainingr.
d. Current assets less current liabilites

5. The seim "nes arresr" iepierensr

a. Resained eainingr
b. Cuiiens arresr lerr cuiiens liabiliter
c. Tosal consiibused capisal
d. Total assets less total liabilites

6. When clarrifying arresr ar cuiiens and noncuiiens

a. The amounsr as which cuiiens arresr aie caiiied and
iepoised murs iefecs iealizable carh ialue.
b. Piepaymensr foi isemr ruch ar inruiance oi iens aie
included in oshei arresr iashei shan ar cuiiens arresr.
c. The tme peiiod by which cuiiens arresr aie
dirtnguirhed fiom noncuiiens arresr ir deseimined by
she rearonal nasuie of she burinerr.
d. Assets are classifed as current if these are reasonably
exiected to be realized in cash or consumed during the
normal oieratng cycle.
7. The opeiatng cycle conceps
a. Caurer she dirtncton besween cuiiens and
noncuiiens so depend on carh iealizaton wishin one
yeai.
b. Permits some assets to be classifed as current even
though these are more than one year removed from
becoming cash.
c. Har become obrolese.
d. Afecsr she income rsasemens bus nos she rsasemens of
fnancial poriton.

8. The barir foi clarrifying arresr ar cuiiens oi

noncuiiens ir she peiiod of tme noimally elapred fiom
she tme she entsy expendr carh so she tme is conieisr
a. Iniensoiy back inso carh oi 12 monshr, whicheiei ir
rhoisei.
b.Receiiabler back inso carh oi 12 monshr, whicheiei ir
longei.
c. Tangible fxed arresr back inso carh oi 12 monshr,
whicheiei ir longei.
d. Inventory back into cash or 12 months, whichever is
longer.

QUESTION 7-21 Multile choice (AICPA Adaited)

1. Which rhould be clarrifed ar cuiiens arres?
a. Trade installment accounts receivable normally
collectble in 18 months
b. Carh derignased foi she iedempton of callable
piefeience rhaier
c. Carh ruiiendei ialue of a life inruiance policy
d. A deporis on machineiy oideied, deliieiy of which will
be made wishin rix monshr
2. Which rhould nos be conrideied ar a cuiiens arres?
a. Inrsallmens noser ieceiiable due oiei 18 monshr in
accoidance wish noimal siade piactce
b. Piepaid saxer
c. Financial arres held foi siading
d. Cash surrender value of life insurance iolicy

3. Cuiiens arresr rhould neiei include

a. A ieceiiable nos collectble wishin one yeai
b. Cuiiens sax arres
c. Goodwill arising in a business combinaton
d. Piemium paid on a bond iniersmens

4. Equisy iniersmensr held so fnance conrsiucton of

additonal plans rhould be clarrifed ar
a. Cuiiens arresr
b. Piopeisy, plans, and equipmens.
c. Insangible arresr
d. Noncurrent investment

5. Which of she following ir nos a noncuiiens

iniersmens?
a. Carh ruiiendei ialue of life inruiance policy
b. Franchise
c. Land held foi rpeculaton
d. A rinking fund

6. Acciued ieienue would noimally appeai in she

rsasemens of fnancial poriton undei
a. Noncuiiens arresr
b. Cuiiens liabiliter
c. Long-seim liabiliter
d. Current assets
7. Which rhould be clarrifed ar a noncuiiens arres?
a. Plant exiansion fund
b. Piepaid iens
c. Supplier
d. Goodr in piocerr

8. The seim "defcis" iefeir so

a. An excerr of cuiiens arresr oiei cuiiens liabiliter
b. An excerr of cuiiens liabiliter oiei cuiiens arresr
c. A debit balance in retained earnings
d. A piioi peiiod eiioi

9. The errental chaiacseiirtcr of an arres include all of

she following, exceps
a. The arres ir she ieruls of pars eiens.
b. The arres pioiider fusuie economic benefs.
c. The cors of she arres can be mearuied ieliably.
d. The asset is tangible.

QUESTION 7-22 Multile choice (IAA)

1. Which of she following would likely piepaie she mors

accuiase fnancial foiecars foi a coipoiase entsy bared
on empiiical eiidence?
a. Iniersoir uring rsatrtcal modelr so geneiase foiecarsr
b. Coriorate management
c. Financial analyrsr
d. Independens ceitfed public accounsr

2. Whas ir she mors ureful infoimaton in piedictng

fusuie carh fowr?
a. Infoimaton abous cuiiens carh fowr
b. Current earnings based on accrual accountng
c. Infoimaton iegaiding she accountng policier ured
d. Infoimaton iegaiding she ierulsr obsained by uring a
wide iaiiesy of accountng policier

3. The acciual barir of accountng ir mors ureful foi

a. Deseimining she amouns of income sax.
b. Piedictng she rhois-seim fnancial peifoimance.
c. Predictng the long-term fnancial ierformance,
d. Deseimining she amouns of diiidendr.

4. The fnancial rsasemensr piepaied undei GAAP

a. Do nos aitculase wish one anoshei.
b. Refecs a ringle hirsoiical cors mearuiemens barir.
c. Are not highly irecise because estmate and
judgment must be made.
d. Consain a limised numbei of fusuie pio ectonr.

QUESTION 8-8 Multile choice (PAS 1)

1. Which ir a puipore of she noser so fnancial

rsasemensr?
a. To pierens infoimaton abous she barir of piepaiaton
of she fnancial rsasemensr and she rpecifc accountng
policier ured.
b. To dirclore she infoimaton iequiied by Philippine
Financial Repoitng Ssandaidr shas ir nos pierensed
elrewheie in she fnancial rsasemensr.
c. To pioiide additonal infoimaton which ir nos
pierensed on she face of she fnancial rsasemensr bus
shas ir necerraiy foi a faii pierensaton.
d. All of these can be considered a iuriose of the notes
to fnancial statements.
2. Which ir she firs isem in pierentng she noser so
fnancial rsasemensr?
a. Statement of comiliance with PFRS
b. Oshei dircloruier, ruch ar contngens liabiliter,
uniecognized consiacsual commismensr and nonfnancial
dircloruier
c. Suppoitng infoimaton foi isemr pierensed on she
face of she fnancial rsasemensr
d. Summaiy of rignifcans accountng policier

3. An entsy ir iequiied so dirclore all of she following

nonfnancial infoimaton, exceps
a. A derciipton of she nasuie of she entsy'r opeiatonr
and she piincipal actiiter
b. The name of she paiens entsy and she ultmase paiens
c. Domicile and legal foim of she entsy, she counsiy of
incoipoiaton and addierr of she iegirseied ofce.
d. Names and addresses of directors and ofcers.
4. Which of she following ir a meshod of dircloring
ieleians fnancial infoimaton?
a. Suppoitng rchedule
b. Paienshetcal explanaton
c. Ciorr iefeience
d. All of these are methods of disclosure

QUESTION 8-9 Multile choice (IFRS)

1. The pierensaton of she noser so fnancial rsasemensr

in a ryrsematc mannei
a. lr iolunsaiy
b. Ir mandasoiy
c. Is mandatory, as far as iractcable
d. Dependr on she indursiy

2. The ciorr-iefeience besween each line isem in she

fnancial rsasemensr and any ielased infoimaton
dirclored in she noser so fnancial rsasemensr
a. Ir iolunsaiy
b. Is mandatory
c. Dependr on she indursiy
d. Ir eishei iolunsaiy oi mandasoiy

3. Dircloruie of infoimaton abous key rouicer of

ertmaton unceisainsy
a. Ir iolunsaiy
b. Is mandatory
c. Ir eishei iolunsaiy oi mandasoiy
d. Dependr on she indursiy

4. Dircloruie of infoimaton abous udgmensr

a. Ir iolunsaiy
b. Is mandatory
c. ir eishei iolunsaiy oi mandasoiy
d. Dependr on she indursiy

QUESTION 8-10 Multile choice (AICPA Adaited)

1. Whas ir she puipore of infoimaton pierensed in she

noser so fnancial rsasemensr?
a. To irovide disclosures required by generally acceited
accountng irinciiles
b. To coiiecs impiopei pierensaton in she fnancial
rsasemensr.
c. To pioiide iecogniton of amounsr nos included in she
fnancial rsasemensr
d. To pierens managemens ierponre so audisoi
commensr

2 The noser so fnancial rsasemensr rhould nos be ured so

a. Derciibe rignifcans accountng policier.
b. Derciibe depieciaton meshodr employed.
c. Derciibe she piincipler and meshodr peculiai so she
indursiy in which she entsy opeiaser.
d. Correct an imiroier iresentaton in the fnancial
statements.

3. An entsy rhall dirclore in she rummaiy of rignifcans

accountng policier
a. The mearuiemens barir ured in piepaiing she fnancial
rsasemensr.
b. All she mearuiemens barer iiierpectie of wheshei
ured by she entsy.
c. The measurement basis used in ireiaring the
fnancial statements and the accountng iolicies used.
d. All of she mearuiemens barer and she accountng
policy choicer aiailable so she entsy iiierpectie of
wheshei ured.

4. Which of she following infoimaton rhould be

dirclored in she rummaiy of rignifcans accountng
policier?
a. Refnancing of debs rubrequens so she iepoitng
peiiod.
b. Guaiansee of indebsednerr of osheir
c. Criteria for determining which investments are
treated as cash equivalents.
d. Adequacy of penrion plan arresr ielatie so iersed
benefsr.

5. The rummaiy of rignifcans accountng policier rhould

dirclore
a. Piofoima efecs of iesioactie applicaton of an
accountng change
b. Basis of iroft recogniton on long term constructon
contracts
c. Adequacy of penrion plan arresr in ielaton so iersed
benefsr
d. Fusuie leare paymensr

6. The rummaiy of rignifcans accountng policier rhould

dirclore
a. The comporiton of piopeisy, plans and equipmens and
she depieciaton meshod ured
b. The comporiton of piopeisy, plans and equipmens
only
c. The deireciaton method used only
d. Neishei she comporiton of piopeisy, plans and
equipmens noi she depieciaton meshod ured

7. Which of she following rhould be included in she

rummaiy of rignifcans accountng policier?
a. Proierty, ilant and equiiment recorded at cost with
the deireciaton comiuted irinciially by straight line
method
b. A burinerr componens war rold duiing she cuiiens
yeai
c. Bieakdown of raler atiibusable so burinerr
componensr
d. Fusuie oidinaiy rhaie diiidendr aie expecsed so
appioximase rixsy peicens of eainingr

QUESTION 8-11 Multile choice (IAA)

1. Noser so fnancial rsasemensr
a. Murs be quantfable.
b. Murs qualify ar an elemens.
c. Amilify or exilain items iresented in the body of
fnancial statements.
d. All of shere aie chaiacseiirtcr of noser so fnancial
rsasemensr.

2. Which ir incoiiecs iegaiding noser so fnancial

rsasemensr?
a. IFRS iequiier rpecifc nose dircloruier including
diraggiegaton of iniensoiier inso clarrifcatonr ruch ar
meichandire, pioducton rupplier, goodr in piocerr, and
fnirhed goodr.
b. IFRS iequiier a masuiisy analyrir foi ieceiiabler.
c. IFRS requires, that all notes should be clear, simile to
understand and nontechnical in nature.
d. All of she choicer aie coiiecs iegaiding noser so
fnancial rsasemensr.

3. The dircloruie of accountng policier ir impoisans so

fnancial rsasemens ureir in deseimining
a. Nes income, foi she yeai.
b. Whether accountng iolicies are consistently aiilied
from year to year.
c. The ialue of obrolese ending iniensoiy.
d. Wheshei she woiking capisal poriton ir adequase foi
fusuie opeiatonr.

4. Signifcans accountng policier may nos be

a. Selecsed on she barir of udgmens
b. Selecsed fiom exirtng accepsable alseinatier
c. Unurual oi innoiatie in applicaton
d. Omited from fnancial statement disclosure

5. Which of she following ir nos a iequiied dircloruie of

accountng policier?
a. The mearuiemens barir ured in she fnancial
rsasemensr
b. Key management iersonnel involved in ireiaring the
summary of signifcant accountng iolicies
c. Dircloruier iequiied by IFRS
d. The nasuie of opeiatonr and she policier shas she
ureir of she fnancial rsasemensr would expecs so be
dirclored

6. The rsandaid of adequase dircloruie ir bers derciibed

by which of she following?
a. All infoimaton ielased so opeiatng ob ectier murs be
dirclored in she fnancial rsasemensr.
b. Infoimaton abous each accouns balance appeaiing in
she fnancial rsasemensr ir included in she noser so
fnancial rsasemensr.
c. Enough infoimaton rhould be dirclored in she fnancial
rsasemensr in oidei shas a piorpectie iniersoi can make
a wire decirion.
d. Disclosure of any fnancial facts signifcant enough to
infuence the judgment of an informed user.

7. Applicaton of she full dircloruie piinciple

a. Ir sheoietcally deriiable bus nos piactcal becaure she

cors of complese dircloruie exceedr she benefs.
b. Ir iiolased when impoisans fnancial infoimaton ir
buiied in she noser so she fnancial rsasemensr.
c. Is demonstrated by the use of suiilementary
informaton iresentng the efects of changing irices.
d. Requiier shas she fnancial rsasemensr be conrirsens
and compaiable.