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Interim Rfinancial Reporting MC
Interim Rfinancial Reporting MC
I. PAS 34 mandates which entities are required to publish interim financial reports, how frequently, or
how soon after
II. Entities that provide interim financial reports in conformity with generally accepted accounting
principles shall
conform to the recognition measurement and disclosure principles set out in the standard.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
2. The Securities and Exchange Commission and Philippine Stock Exchange require entities covered by
the reportorial requirements of the Revised Securities Act to file
a. Quarterly interim financial reports within 45 days after the end of each of the first three quarters.
b. Quarterly interim financial reports within 30 days after the end of each of the first three quarters.
c. Semiannual interim financial reports within 45 days after the end of the first six months.
d. Semiannual interim financial reports within 30 days after the end of the first six months.
a. I only
b. II only
c. Either I or II
d. Neither I nor II
4. An interim financial report shall include, as a minimum, all of the following components, except
a. At least at the end of the half year and within 60 days of the end of the interim period.
c. On a quarterly basis
a. Statement of financial position as of the end of the current interim period and comparative statement
of the current interim period and comparative statement of financial position as of the end of the
immediately preceding fiscal year.
b. Income statements for the current interim period and cumulatively for the current financial year to
date with
c. Statement of changes in equity cumulatively for the current financial year to date with comparative
statement for the
d. Statement cash flows cumulatively for the current financial year to date with comparative statement
for the comparable
7. The entity’s financial year ends December 31 and the entity presents financial statements in its
quarterly interim financial report on September 30, 2010. Which is an incorrect presentation of the
comparative interim financial statements?
d. Statement of changes in equity for nine months ending September 30, 2010
Statement of changes in equity for nine months ending September 30, 2009
a. To save time and cost, entities often use estimates to measure inventories at interim dates to a greater
extent than at annual reporting dates.
b. Depreciation and amortization for an interim period shall be based only on assets owned during the
interim period.
c. The cost of planned major periodic maintenance or overhaul that is expected to occur late in the year
is not anticipated for interim purposes, unless an event has caused the entity to have legal or
constructive obligation
d. Charitable contribution, employee training costs and other costs that are expected to be incurred
irregularly during the financial year shall be accrued at the end of interim reporting period.
I. The bonus is a legal obligation or past practice would make the bonus a constructive obligation for
which the entity has no realistic alternative but make the payment.
a. Both I and II
b. Neither I nor II
c. Either I or II
d. I only
I. An entity shall apply the same accounting policies in its interim financial statements as are applied in
its annual financial statements.
II. If an entity’s interim financial report is in compliance with PFRS, that fact shall be disclosed.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
c. On a quarterly basis
a. The year-end financial statements are deemed not to comply with PFRS
c. The year-end financial statements will not be acceptable under local legislation
d. A condensed statement of financial position, income statement and statement of cash flows only.
4. PAS 34 states a presumption that anyone reading interim financial reports shall
5. An entity owns a number of farms that harvest produce seasonally. Approximately 80% of the entity’s
sales are in the
period. August to October. Because the entity’s business is seasonal, PAS 34 suggests
a. Additional notes be written in the interim reports about seasonal nature of the business.
b. Disclosure of financial information for the latest and comparative 12-month period in addition to the
interim report.
d. No additional disclosure.
b. Use of the gross margin method for computing cost of goods sold must be disclosed
c. Costs and expenses not directly associated with interim revenue must be allocated to interim periods
on a reasonable basis.
d. Gains and losses that arise in an interim period shall be recognized in the interim period in which they
arise if they would not normally be deferred at year-end.
II. An interim financial report may consist of a condensed set of financial statements.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
II. The net realizable value of inventories is determined by reference to selling prices at the interim date.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
4. An entity is preparing interim financial statements for the six months ended June 30,2010. In the
interim financial
statements for the six months ended June 30, 2010, a statement of financial position at June 30, 201 and
a statement of
comprehensive income for the six months ended June 30, 201 shall be presented. In addition all of the
following shall be presented, except
c. Statement of comprehensive income for the half year ended June 30, 2009
d. Statement of cash flows for the half year ended June 30, 2009
5. An entity is preparing its financial statements for the first half of its financial year ending June 30, 201.
One class of inventory has a cost per unit of P500 and a net realizable value at June 30, 201 of P480 per
unit. The business is
seasonal and the net realizable value at December 31, 201 is expected to be P550.
The entity’s budget for the year scheduled a major refurbishment project from April to June 2010. For
legal reasons, the
contract for the refurbishment was not signed until July 15, 2010, on which date the work was started.
I. The inventory shall be carried at its cost per unit of P500 on June 30, 2010.
II. The cost of the major refurbishment project shall be accrued on June 30, 2010.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
a. Monthly basis
b. Quarterly basis
c. Semiannual basis
d. Nine-month basis
2. For interim financial reporting, an inventory loss from a market decline in the second quarter shall be
recognized as a loss
3. If annual major reports made in the first quarter and paid for in the second quarter clearly benefit the
entire year, when
4. For external reporting purposes, it is appropriate to use estimated gross profit rate to determine the
cost of goods sold for
I. Interim reporting
a. I only
b. II only
c. Both I and II
d. Neither I nor II
5. For interim financial reporting, an expropriation gain occurring in the second quarter shall be
b. Recognized ratably over all four quarters with the first quarter being restated
6. Advertising costs incurred shall be deferred to provide an appropriate expense in each period for
I. Interim reporting
a. I only
b. II only
c. Both I and II
d. Neither I nor II
7. An inventory loss from a market price decline occurred in the first quarter. However, in the third
quarter the inventory had a
market price recovery that exceeded the market decline that occurred in the first quarter. For interim
financial reporting,
a. Decrease in the first quarter by the amount of the market price decline and increase in the third
quarter by the amount
b. Decrease in the first quarter by the amount of the market price decline and increase in the third
quarter by the amount
c. Not be affected in the first quarter and increase in the third quarter by the amount of the market price
recovery that
8. Due to a decline in market price in the second quarter, an entity incurred an inventory loss. The
market price is expected to
return to previous levels by the end of the year at the end of the year, the decline had not reversed.
When should the loss
9. How is income tax expense for the third quarter interim period computed?
b. The estimated tax for the first three quarters based on annual rate less a similar estimate for the first
two quarters.
c. The rate applicable during the third quarter multiplied by four times the third quarter pretax earnings.
d. One-half of the difference between total estimated annual income tax expense and the income tax for
the first two
quarters.