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Contents
1 FINANCIAL REPORTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 FINANCIAL REPORTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. FINANCIAL REPORTING
NARAYAN CHANGDER
1.1 FINANCIAL REPORTING
1. Which accounting concept states that omit- C. Fiscal Year
ting or misstating this information could in- D. none of above
fluence users of the financial statements?
4. A large customer owing $3 mln for
A. The consistency concept
products it already received declared
B. The accruals concept bankruptcy. Which line items in Global’s
C. The materiality concept balance sheet would be affected?
D. The going concern concept A. Cash
B. Accounts Receivable
2. Decision makers have various types of de-
cisions, ways of discussing, information C. Equity
they already have previously or informa- D. Long-term Debt
tion obtained from other sources, and the Explanation:The accounts receivable
ability to process information. The impact, (amounts owed to the firm by customers
for information to be useful, there must be who have purchased goods or services on
a relationship between the user and the credits) would decrease by $3 million due
decisions made, which is often referred to to bad debts, and this would also affect
as the equity.
A. Relevant 5. If there are standards that conflict with
B. Reliable the conceptual framework of financial re-
porting, then the company in its accounting
C. Easy to understand
policies must .
D. Materiality
A. Follows the conceptual framework
3. Your one year period begins on January B. Follow applicable standards
1st and ends December 31st. C. provide its own accounting policies
A. Accounting Period D. does not follow standards or concep-
B. Calendar Year tual frameworks
1. C 2. A 3. B 4. B 4. C 5. B
1.1 FINANCIAL REPORTING 3
6. Which modules can export both including 10. Which of the following statements is/are
version and excluding version report true?1.The IFRS Interpretations Commit-
tee is a forum for the IASB to consult with

A. Prospect
the outside world.2. The IFRS Foundation
B. Policy produces IFRSs. The IFRS Foundation is
C. Incomplete Order/Quotation overseen by the IASB.3. One of the ob-
jectives of the IFRS Foundation is to bring
D. Claims
about convergence of national accounting-
7. ABC Co. has current assets of $50, 000 standards and IFRSs.
and total assets of $150, 000. ABC has A. 1 and 3 only
current liabilities of $30, 000 and total li- B. 2 only
abilities of $80, 000. What is the amount
of ABC’s owner’s equity? C. 2 and 3 only
A. 70000 D. 3 only
B. 20000 11. COMPUTATIONALVilo Corp. has estimated

C. 30000 that total depreciation expense for the
year ending December 31, 20X6, will
D. 120000 amount to P60, 000, and that 20X6 year-
end bonuses to employees will total P120,
8. Which ONE of the following statements 000. In Vilo’s interim income statement
correctly describes the contents of the for the six months ended June 30, 20X6,
Statement of Profit or Loss? what is the total amount of expense re-
A. A list of ledger balances shown in debit lating to these two items that should be
and credit columns reported?
B. A list of all the assets owned and all A. 0
the liabilities owed by a business B. 30, 000
C. A record of income generated and ex- C. 90, 000
penditure incurred over a given period
D. 180, 000
D. A record of the amount of cash gener-
ated and used by a company in a given pe- 12. BAURU, S.A., a Brazilian corporation, bor-
riod rows capital from a local bank to finance
the construction of its manufacturing plant.
9. Accounting standards are The loan’s conditions are listed in the fig-
A. consensus on recording economic re- ure.The construction of the plant takes
sources, liabilities, capital, results, costs two years, during which time BAURU
and changes thereto in the form of finan- earned BRL 10 million by temporarily in-
cial reports vesting the loan proceeds. Which of the
following is the amount of interest related
B. document transactions that must be to the plant construction (in BRL million)
recorded, disclosed and presented in the that can be capitalized in BAURU’s balance
Financial Report sheet?
C. useful approach to decision-
usefulness
D. all true
6. B 6. C 7. A 8. C 9. A 10. D 11. C 12. A

A. 130. A. Political environment.

B. 140. B. Expectations gap.
C. 210. C. Decision-usefulness
D. none of above D. Ethics.
13. What is “expectation gap”? 17. Max, Samuel, and Eesha are studying for
A. The difference between what the pub- their business exam. They come across a
question in their textbook:‘What financial
NARAYAN CHANGDER
lic thinks the accountant is not doing and
what the accountant knows they don’t do. statement reports a company’s assets, li-
abilities, and shareholders’ equity?’ Can
B. The difference between what the you help them answer this?
public thinks the accountant should do
and what Congress says the accountant A. Balance Sheet
should do. B. Statement of Financial Position
C. The difference between what the pub- C. Cash Flow Statement
lic thinks the accountant should do and
D. Statement of Income
what the accountant thinks they can do.
D. The difference between what the ac- 18. If an entity changes an accounting esti-
countant should do and what the Courts mate during an interim period, the change
say the accountant should be doing. shall be applied
A. as at the beginning of that interim pe-
14. Private Company which is a Subsidiary
riod where the change occurred.
Company of Public Company shall be cal-
culated as: B. as at the beginning of the current year.
A. Public Company C. as at the end of the interim period
where the change occurred.
B. Private Company
D. as at the end of the current year.
C. Not calculated at all
D. None of these 19. Calculate Capital Adequacy Ratio:Tier I
capital:50 crore Tier II capital:90 crore
15. Accumulated other comprehensive income Risk weighted assets:250 crore Off bal-
will be presented in ance sheet items:300 crores
A. income statement in the other compre- A. 25.45%
hensive income statement section
B. 9.09%
B. Statement of financial position in the
equity section C. 46.67%
C. Statement of financial position in the D. 16.36%

long-term liabilities section 20. Which statement is incorrect regarding
D. Report comprehensive income in the prudence?
other comprehensive income section A. Neutrality is supported by the exercise
16. The international financial reporting envi- of prudence
ronment includes challenges in financial re- B. Prudence is the exercise of caution
porting including all of the following ex- when making judgments under conditions
cept of uncertainty
13. C 14. A 15. B 16. C 17. A 18. A 19. A 20. D

C. Prudence does not allow for overstate- A. nature, but not by function.
ment of assets, liabilities, income or ex-
B. function, but not by nature.
penses

C. either function or nature.
D. Prudence allows for understatement
of assets, liabilities, income or expenses D. none of above
21. The primary users of general purpose fi- 24. Refer to Figure 4.03-I. Based on the infor-
nancial reports are: mation provided, what is the working cap-
A. Investors and lenders ital for LKR Entertainment?
B. Investors and customers
C. Employees and lenders
D. Investors and employees
22. Refer to Figure 1.04-D. The correct jour-

nal entry to record the closing entry for
Income Statement accounts with credit bal-
ances is:
A. $22, 000
B. $107, 000
C. $112, 000
D. $197, 000
A. Debit Income Summary, $130, 700;
credit Sales, $130, 700. 25. What is the role of the IASB?
B. Debit Sales, $130, 700; credit Income A. Oversee the standard setting and reg-
Summary, $130, 700. ulatory process
C. Debit Sales-Books, $85, 500, Sales- B. Formulate international financial re-
Music, $45, 200, Purchases Discount- porting standards
Books, $8, 700, Purchases Returns and
Allowances-Books, $1, 800, Purchases C. Review defective accounts
Discount-Music, $2, 100, Purchases Re- D. Control the accountancy profession
turns and Allowances-Music, $1, 300;
credit Income Summary-General, $144, 26. Jones Company has been experiencing a
600. lower-than-desired current ratio. To im-
D. Debit Income Summary-General, $144, prove the current ratio, Jones Company
600; credit Sales-Books, $85, 500, Sales- should:
Music, $45, 200, Purchases Discount- A. issue short-term debt to finance addi-
Books, $8, 700, Purchases Returns and tional fixed assets.
Allowances-Books, $1, 800, Purchases
Discount-Music, $2, 100, Purchases Re- B. issue long-term debt to purchase fixed
turns and Allowances-Music, $1, 300. assets.
C. issue short-term debt to buy inventory.
23. Expenses on the income statement may be
grouped by: D. issue more capital stock to raise cash.
21. A 22. C 23. C 24. A 25. B 26. D 27. C

27. Select the statement that is most suitable A. IAS 1

to Bordereau
B. IAS 7
A. search components, statuses and
C. IAS 18
numbering.
B. allows customer to access and man- D. IAS 2
age their policies, quotes, claims and pro-
file at convenience. 31. An event related to an investment in debt
securities that does not require journal en-
NARAYAN CHANGDER
C. A report provided by a re-insured com- try is:
pany, detailing the losses or premiums af-
fected by reinsurance. A. change of name of company issuing
debt securities
D. none of above
B. acquisition of debt investments
28. Equipment is depreciated at 10% of cost,
C. sale of debt investments
in Trial Balance there is an Equipment ac-
count Rp20.000.000 and Accumulated De- D. receipt of interest income from debt in-
preciation Equipment Rp5.000.000 vestments
A. Depreciation Expense (D) Rp4.000.000
32. Intangible assets with finite useful lives
Accumulated Dep. Equipment (K)
mostly differ from intangible assets with-
Rp4.000.000
infinite useful lives with respect to ac-
B. Depreciation Expense (D) Rp1.500.000 counting treatment of:
Accumulated Depreciation (K) Rp1.500.000
A. revaluation.
C. Depreciation Expense (D) Rp2.000.000 B. impairment.

Accumulated Dep. Equipment (K) C. amortization.
Rp2.000.000
D. none of above
D. Depreciation Expense (D) Rp1.000.000
Accumulated Dep. Equipment (K) 33. An entity is not prohibited from including in
Rp1.000.000 its condensed interim financial statements
information that is more than the minimum
29. A company issues $1, 000, 000 face value
line items or selected explanatory notes
of 10-year bonds on 1 January 2015when
set out under PAS 34.
the market interest rate on bonds of com-
parable risk and terms is 5%. Thebonds A. TRUE
pay 6% interest annually on 31 December.
B. FALSE
At the time of issue, the bondspayable re-
flected on the balance sheet is closest to: 34. provide additional information and
A. $926, 399. help clarify the items presented in the fi-
B. $1, 000, 000. nancial statements.
C. $1, 077, 217. A. Quotes to FS
D. none of above B. Notes to FS

C. Words to FS
30. Which of the following IAS will be refer to
learn about Cash flow statement: D. none of above
28. C 29. C 30. B 31. A 32. C 33. A 34. B 35. A

35. Financial Statements of corporation with A. FIFO

total assets of Php 600, 000 needs to be B. LIFO
audited by an independent certified public

accountant. C. Average
A. True D. Specific Identification
B. False 41. If the current cost measurement basis is

used, assets are measured at:
36. If an entity does not prepare interim finan-
cial reports, then A. The amount which could be obtained
by selling them
A. The year-end financial statements are
deemed not to comply with IFRS. B. Present value
B. The year-end financial statements’ C. Replacement cost

compliance with IFRS is not affected. D. The amount paid to acquire them
C. The year-end financial statements will 42. This concept means not overstating assets,
not be acceptable under local legislation. owner’s equity, and revenues, and not un-
D. Interim financial reports should be in- derstating liabilities and expenses
cluded in the year-end financial state- A. Conservatism
ments.
B. Time-period
37. The decisions of the ‘primary users’ in- C. Entity
volve
D. Materiality
A. Buying equity and debt instruments
B. Selling or holding equity and debt in- 43. Organizations involved in Harmonization
struments Efforts
C. Providing or settling loans and other A. Association of South East Asian Na-
forms of credit tions (ASEAN)
D. All of the above B. International Accounting Standards

Committee(IASC)-dissolved in 2001
38. Items that will be held for more than a C. International Organization of Securi-
year ex:equipment, trucks, buildings ties Commissions (IOSCO)
A. Assets D. A, B, C true
B. Current Assets
44. On December 31, there is unpaid bank
C. Accounts Receivable interest for this month which is calcu-
D. Fixed Assets lated with an interest rate of 12%. In
Trial Balance there is a bank loan account
39. You record your income when it is earned Rp100.000.000
and expenses when they are incurred
A. Interest Expense (D) Rp2.000.000 In-
A. Cash Basis terest Payable (K) Rp2.000.000
B. Accrual Basis B. Interest Expense (D) Rp1.000.000 In-
40. Merchandise inventory method that pro- terest Payable (K) Rp1.000.000
duces high net profits when inflation oc- C. Interest Expense (D) Rp3.000.000 In-
curs terest Payable (K) Rp3.000.000
36. B 37. D 38. D 39. B 40. A 41. C 42. A 43. D 44. B

D. Interest Expense (D) Rp4.000.000 In- 49. Accounting that prepares reports, pay-
terest Payable (K) Rp4.000.000 ments, or tax returns is called:
45. A warehouse fire destroyed $5 million A. Financial Accounting

worth of uninsured inventory. What is the B. Management accounting
change to Global’s book value of equity?
C. Budget accounting
A. Decrease by $5 million
D. Government accounting
B. Increase by $5 million
NARAYAN CHANGDER
E. Tax accounting
C. No change
50. What is matching principle?
D. Increase by $10 million
Explanation:The loss of uninsured inven- A. Record revenue when a service is pro-
tory directly reduces the assets. Because vided to the customer, whether or not you
of the balance sheet identity (i.e., As- collect the money due at the moment
sets = Liabilities + Stockholders Equity), B. You must report enough information
the book value of equity will also be de- for insiders to make an informed decision
creased by $5 million. about the company
46. Accounting Standards Council was created C. Accountants identify and measure all
in what year? expenses incurred during the period and
match the expenses against revenues
A. 1971
earned
B. 1981
D. You stick with the same accounting
C. 1982 principles and approach from one period
D. 1961 to the next
47. Accounting provides the information neces- 51. Which is correct?

sary to carry out activities efficiently and A. IAS12 income Taxes
evaluate the activities of an entity. This
is an understanding of accounting in terms B. IAS14 income Taxes
of C. IAS10 income Taxes
A. User D. IAS8 income Taxes
B. Activity
52. An entity granted a share appreciation
C. Prosedur right to the CEO on January 1, 2022. Af-
D. Recording ter a 3-year service, the employee is en-
titled to receive a cash equal to the ap-
E. Classification preciation in share price over the market
value on January 1, 2022. The market
48. Which of the following expenditures is a
value on January 1, 2020 is the prede-
capital expenditure?
termined price for the purpose of deter-
A. Purchase of raw material mining the compensation. The share op-
B. Purchase of plant tion right has the following terms:Service
period-January 1, 2022-December 31,
C. Rent 2024Number of shares-100, 000Exercise
D. Depreciation date-January 1, 2025The quoted prices of
45. A 46. B 47. A 48. B 49. E 50. C 51. A 52. A

the entity’s share are:January 1, 2022- in subsection iv. to provide its views to
150December 31, 2022-155December 31, the MASB on any matter which the MASB
2023-152December 31, 2024-160What seeks to undertake or implement in rela-

is the credit entry on December 31, 2024 tion to the MASB’s functions under section
A. Accrued Salaries Payable 800, 000 7 of the Act
B. Salaries Expense 800, 000 A. i and ii
C. Accrued Salaries Payable 1, 000, 000 B. iii and iv
D. Salaries Expense 1, 000, 000 C. i, ii, and iv

D. all above
53. A company purchased a building twenty
years ago for $150, 000. The building 57. The following are the reasons why compa-
currently has an appraised market value nies invest in debt or stock securities, ex-
of $235, 000. The company reports the cept:
building on its balance sheet at $235, 000. A. the company may have more money
What concept or principle has been vio-
B. to generate income from investments
lated?
C. to increase the company’s liabilities
A. Monetary measurement concept
D. for strategic reasons
B. Recognition principle
C. Cost principle 58. Jacob, Rosie, and Isabella are studying for
their business exam. They come across
D. Separate entity concept
a financial statement that provides infor-
54. Deferred Tax on actuarial gain of gratuity mation about a company’s assets, liabil-
is created through: ities, and shareholders’ equity. What is
this statement called?
A. Profit and Loss Account
A. Balance Sheet
B. Profit and Loss appropriation account
B. Statement of Financial Position
C. Other Comprehensive Income
C. Cash Flow Statement
D. none of above
55. The following are assets in a long-term li-
ability account, except 59. What were the ISAs that were used in case
2 to decide the type of audit opinion to be
A. Deferred tax liabilities
issued by the auditing firm?
B. Employee benefits liabilities
A. ISA 315 and 330
C. Long-term debt that matures in 1 year
B. ISA 700 and 705
D. Rent payable-minus current portion C. ISA 240 and 250
56. The function of Financial Reporting Foun- D. ISA 530 and 580
dation (FRF) are:i. To review the perfor-
mance of the MASBii. To be responsible for 60. Information that allows users to know
the financing arrangements and operations whether amounts owed to them will be
of the MASBiii. to perform any other func- paid, is an aspect of financial statements
tion as the Minister may prescribe by or- that is the focus of users of these financial
der published in the Gazette. Without lim- statements:
iting the generality of functions of the FRF A. Investor
53. C 54. C 55. C 56. D 57. C 58. A 59. B 60. D

B. Government B. Overcoming “Nationalism” and tradi-

C. Employee tion and May not provide significant ben-
efits.
D. Suppliers and other business creditors
C. Will cause “Standards Overload” for
61. What is the limit of number of directors in some companies and varying Standards
a public company? that can be accepted from different places
A. 20 D. A, B, C are all true
NARAYAN CHANGDER
B. 15 66. The adjusting entry to record an accrued
C. 10 revenue results in which of the following
types of accounts being debited and cred-
D. 3
ited?
62. Term to describe the amount of an expense A. Asset/Revenue
due in an accounting period which is unpaid
B. Asset/Liability
at the end of that period
A. Prepayment C. Expense/Asset
B. Expense D. Expense/Liability
C. Accrual 67. Arthur, Florence, and Max are studying for

D. Unpaid income their business exam. They come across a
question about financial statements. They
63. Payments for rent are recognized as pre- want to know which financial statement
paid rent on March 1, 2021 for a rental provides information about a company’s
period of 1 year Rp. 12, 000, 000. The sources of income and expenses. Can you
company made the adjustment on August help them?
31, 2021. The correct adjusting entry on A. Balance Sheet
the debit side is
A. Prepaid Rent Rp. 10.000.000
B. Rent Expense Rp. 10.000.000
C. Prepaid Rent Rp. 6.000.000
D. Rent Expense Rp. 6.000.000 68. Interest paid is classified as an operating
cash flow under:
64. What are included in Financial Report
A. US GAAP but may be classified as ei-
A. Slip ther operating or investing cash flows un-
B. Commission Inbox der IFRS.
C. Workinbox B. IFRS but may be classified as either op-

erating or investing cash flows under US
D. Table Report GAAP.
65. Disadvantages of Harmonization: C. US GAAP but may be classified as ei-
ther operating or financing cash flows un-
A. Significant differences in current stan-
der IFRS.
dards and the political burden of eliminat-
ing differences. D. none of above
61. C 62. C 63. D 64. A 64. B 64. D 65. D 66. A 67. D 68. C
69. Refer to Figure 4.03-F. Based on the in- 73. What is a possible danger if politics plays
formation provided, what are the earnings too big a role in developing IFRS?
per share for the company?

A. Financial reporting standards that are
issued that are not truly generally ac-
cepted.
B. Individuals may influence the stan-
dards.
C. User groups become active.
A. $0.65 per share D. The IASB delegates its authority to
elected officials.
B. $1.30 per share
C. $11.30 per share 74. In preparing accounting standards, it really
depends on
D. $16.80 per share
A. market mechanisms and professions
70. Listed below are some characteristics of fi-
B. government
nancial information.1. Relevance2. Con-
sistency3. Faithful representation4. Ac- C. market mechanisms, professions, and
curacyWhich TWO of these are qualita- government
tive characteristics of financial information D. profession and government
according to the IASB’sConceptual Frame-
work for Financial Reporting? 75. Which of the following are not enhancing
qualitative characteristics of useful finan-
A. 1 and 2
cial information as identified in The Con-
B. 2 and 4 ceptual Framework?Item 1 PredictiveItem
C. 3 and 4 2 InfluencingItem 3 ComparableItem 4 Rel-
evance
D. 1 and 3
A. I, II, and III only
71. A receivables ledger control account had a
B. I, II and IV only
closing balance of $8, 500. It contained
a contra to the payables ledger of $400, C. I, III and IV only
but this had been entered on the wrong D. II, III and IV only
side of the control account.What should be
the correct balance on the control account? 76. Which statement is incorrect regarding the
Conceptual Framework for Financial Re-
A. $7, 700 debit
porting?
B. $8, 100 debit
A. Serves as a guide in developing future
C. $8, 400 debit PFRSs
D. $8, 900 debit B. Serves as a guide in resolving account-
72. An expenditure which benefits only the ing issues that are not addressed directly
current period is known as: in existing PFRSs
A. Revenue expenditure C. Is not a PFRS and hence does not de-

fine standards for any particular measure-
B. Capital expenditure ment or disclosure issue
C. Current expenditure D. Prevails in cases where there is con-
D. Deferred expenditure flict with a PFRS
69. B 70. D 71. A 72. A 73. A 74. C 75. B 76. D

77. The balance sheet heading will specify a from 2015 to 2019:25+25+100+75+40=265.Frac-
A. Period of time tion spent on capital expendi-
tures:265/247.4=1.071 or 107.1%.
B. Point in time
83. What role does financial reporting play in
78. Which of the following elements of finan- improving a company’s credibility?
cial statements is most closely related to
A. It has no impact on the company’s
measurement of financial position?
credibility
A. Equity.
NARAYAN CHANGDER
B. It provides irrelevant data to stake-
B. Income. holders
C. Expenses. C. It demonstrates transparency and ac-
D. none of above countability to stakeholders
D. It allows the company to hide financial
79. Revenue is recognized in the accounting pe-
information
riod in which the settlement of the obliga-
tion has been carried out/fulfilled 84. Audit committee shall constitute minimum
A. Correct directors where independent directors
forming majority
B. Salah
A. Three
80. Inventory cost is least likely to include: B. Four
A. production-relatedstorage costs. C. Five
B. costs incurred as a result of normal D. Six
waste of materials.
85. Money received from customers for prod-
C. transportation costs of shipping inven- ucts to be delivered in the future is-
tory to customers. recorded as:
D. none of above A. revenue and an asset.
81. Which is not information presented in the B. an asset and a liability.
Statement of Financial Position? C. revenue and a liability.
A. Assets D. none of above
B. Liabilities
86. Information is said to be relevant if it can
C. Ebitda make a difference in the decisions made by
D. Equity users of the information. Based on the Fi-
nancial Reporting Conceptual Framework,
82. From 2015 to 2019, what fraction of the financial information can make a difference
total total cash flow from operations (pre- in decision making when it has the follow-
vious answer) was spent on capital expen- ing values:(1) Estimated value (2) Compar-
ditures? ative value (3) Historical value (4) Confir-
A. 107.1% matory value
B. 93.4% A. and (4)
C. 91.5% B. and (3)
D. 109.3% C. and (4)
Explanation:Total capital expenditures D. and (3)
CHECK GOOGLE PLAY BOOKS FOR ANSWERS KEYS

87. Which statement tells you about the profit 91. Financial reports must accurately reflect fi-
and loss of the company for the period? nancial conditions = free from error
A. Correct

A. Cash flow statement
B. Income statement B. Salah
C. Balance sheet 92. What is the Return on Investments for
9M 2022 on Group items?ROI=(Net
D. All of them
Return on Investment/Cost of In-
88. A Company issuing its annual financial re- vestment)*100%*Time effectAnnualiza-
ports within one month of the end of the tion1st Q (12/3 =4) 2nd Q (12/6=2) 3rd
year is an example of which enhancing Q (12/9=1, 3333) 4th Q (12/12=1)
quality of accounting information? A. -3%
A. Comparability B. -5%
B. Timeliness C. 2%
C. Understandability D. -2%
D. Verifiability 93. Failure of financial reporting and auditing.

Criticism received by accounting practition-
89. Norris Manufacturing has a current ratio ers in the standard formation process gen-
of 1.3:1. The industry standard for com- erally focuses on the low quality of finan-
panies similar to Norris Manufacturing is cial reporting even though it is regulated.
2.5:1. This means that Norris Manufactur- The reasons given for this are:
ing: A. A. weak accounting standards and au-
A. is operating efficiently because of its diting standards
excessive cash flow. B. B. Fraud in companies that is not de-
B. lacks the ability to pay its current liabil- tected by auditors and company failures
ities. are not reflected in financial reports so
that they fail to protect the public interest
C. has a higher-than-average financial
risk when compared to other firms in its C. C. The argument is that more and bet-
industry. ter regulations are needed to improve the
quality of financial reporting in order to
D. has a lower-than-average financial protect the public from fraud and failure
risk when compared to other firms in its
industry. D. There is no need for more and better
regulations to improve the quality of finan-
90. Which of the following is a key quality of cial reporting in order to protect the public
a good financial report? from fraud and failure
A. Exaggerating financial achievements 94. It was formed last 2001 which replaces
B. Providing biased information to favor the International Accounting Standards
stakeholders Committee.
A. ASC
C. Presenting accurate and reliable finan-
cial information B. FRSC
D. Emphasizing future projections over C. FISH
past performance D. IASCB

95. Which concept states that “You have to re- 99. Which ONE of the following statements
port accounting info at regular intervals?” correctly describes the contents of the
Statement of Financial Position?
A. Conservatism
A. A list of ledger balances shown in debit
B. Reliability and credit columns
C. Time-period B. A list of all the assets owned and all
D. Entity the liabilities owed by a business
C. A record of income generated and ex-
NARAYAN CHANGDER
96. Viewed from the point of view of its func- penditure incurred over a given period
tion, accounting is defined as
D. A record of the amount of cash gener-
A. A tool for recording all transactions or ated and used by a company in a given pe-
events that occur within the company riod
B. An activity of providing important com- 100. Refer to Figure 1.04-C. Based on this in-
pany financial data for parties who need formation, the correct adjusting entry to
it journalize the Uncollectible Accounts Ex-
C. A series of activities that include pense is:
recording and reporting financial transac-
tions that occur within the company
D. A collection of records regarding com-
pany financial transactions that occurred
in a certain period
E. Overview of company finances as the
responsibility of company leadership
A. Debit Allowance for Uncollectible Ac-
97. Which costs incurred with the purchase of counts, $4, 856.20; credit Uncollectible
property and equipment areexpensed? Accounts Expense, $4, 856.20.
A. Delivery charges B. Debit Uncollectible Accounts Expense,

$485, 620; credit Allowance for Uncol-
B. Installation and testing lectible Accounts, $485, 620.
C. Training required to use the property C. Debit Allowance for Uncollectible Ac-
and equipment counts, $485, 620; credit Uncollectible Ac-
counts Expense, $485, 620.
D. none of above
D. Debit Uncollectible Accounts Expense,
98. Financial information must be complete, $4, 856.20; credit Allowance for Uncol-
neutral and free from errors. This is in ac- lectible Accounts, $4, 856.20.
cordance with the characteristics of finan-
101. The “fundamental” qualitative character-
cial reports, namely:
istics are
A. Relevance
A. Relevance and reliability
B. Materiality B. Relevance and faithful representation
C. Accurate representation C. Timeliness and verifiability
D. Comparability D. Understandability and comparability

102. The fundamental qualitative characteris- 106. Changing the method of inventory valu-
tics of financial information are: ation should be reported in the financial
statements under what qualitative charac-

A. Relevance and faithful representation
teristic of accounting information?
B. Relevance and comparability
A. Comparability
C. Faithful representation and compara- B. Consistency
bility
C. Verifiability
D. Verifiability and understandability
D. Understandability
103. Preparation of consolidated financial 107. Interim financial reports released by a
statements when a parent-subsidiary re- company are most likely to be:
lationship exists is an example of the
A. monthly.
A. economic entity assumption
B. unaudited.
B. relevance characteristic
C. unqualified.
C. comparability characteristic D. none of above
D. neutrality characteristic
108. company will not be counted for the
104. Which of the following is not a role of The purpose of maximum number of director-
Conceptual Framework (The Framework)? ship
A. Private Company
A. It is the foundation that standard-
setters use when developing accounting B. Government Company
standards. C. Sec-8 Company
B. It enables the external auditors to D. None of the above
evaluate compliance with IFRS and then
form an opinion. 109. Cooper Corporation has a ratio of stock-
holders’ equity to liabilities of 3.15 for the
C. It enables consistency when the exist- current year. The ratios for the past two
ing accounting standards do not provide years were 2.10 and 2.35, respectively.
guidance on a particular issue. Which would most likely explain the sig-
D. It is an alternative to the detailed ac- nificant change from the prior year to the
counting standards as it is much easier current year?
to understand by users of financial state- A. Cooper Corporation expanded its cur-
ments. rent facilities in the current year.
105. Collection of all accounts created for your B. Cooper Corporation had sales that de-
business creased dramatically over the past three
years.
A. General Journal
C. Cooper Corporation used proceeds
B. General Ledger from a short term note to reduce accounts
payable.
C. Income Statement
D. Cooper Corporation issued and re-
D. Balance Sheet
ceived payment for a substantial amount
E. Statement of Cash Flows of common stock.

110. The information provided by a balance B. $82, 500

sheet item is limited because of uncer- C. $65, 000
tainty regarding:
D. $73, 750
A. measurement of its cost or value with
reliability. 114. The company records its customers’ de-
mands even though the court process has
B. the change in current value following
not yet been completed = full disclosure
the end of the reporting period.
A. Correct
NARAYAN CHANGDER
C. the probability that any future eco-
nomic benefit will flow to or from theen- B. Salah
tity. 115. If an adjustment includes an entry to Ac-
D. none of above cumulated Depreciation, which type of ad-
justment is it?
111. The final basis change will cause a 50 M
A. Estimate
USD decrease in reserve. How will the Ba-
sis Change affect Balance Sheet? B. Deferral
A. Liability increase by 50 M USD C. Accrual
B. Owner’s equity decrease by 50 M USD D. Cull
C. Both Liability and Owner’s Equity in- 116. The portion of capital in subsidiary com-
crease by 50 M USD panies which is the right of non-controlling
shareholders is presented as
D. Both Liability and Owner’s Equity de-
crease by 50 M USD A. Equity
E. Liability increase by 50 M USD and B. Long term liabilities
Owner’s Equity decrease by 50 M USD C. Non-fixed assets
112. Most businesses use double entry ac- D. Short-term liabilities
counting 117. Refer to Figure 4.03-A. Based on this in-
A. True formation, what is the Merchandise Inven-
tory turnover rate for 20X2 and 20X1?
B. False
113. At 30 June 20X2 a company had $1m

8% loan notes in issue, interest being
paid half-yearly on 30 June and 31 De-
cember.On 30 September 20X2 the com- A. 10.22 times in 20X2; 2.87 times in
pany redeemed $250, 000 of these loan 20X1
notes at par, paying interest due to that B. 3.13 times in 20X2; 3.31 times in 20X1
date. On 1 April 20X3 the company is-
C. 4.52 times in 20X2; 21.5 times in 20X1
sued $500, 000 7% loan notes, interest
payable half-yearly on 31 March and 30 D. 4.80 times in 20X2; 3.07 times in 20X1
September. What figure should appear in 118. Kleen-Up Company has a receivables
the company’s statements of profit or loss turnover ratio of 9.2 for the current year
for interest payable in the year ended 30 and 10.7 for the prior year. Based on
June 20X3? these ratios, management decides to in-
A. $88, 750 crease the late payment charge imposed

on clients when bills are not paid on time. 121. An analyst gathered the following infor-
Why did Kleen-Up make this change? mation from a company’s 2020 financial
statements (in $ millions).In 2021, the

A. Collections of receivables are taking
more time, and an increase in the late pay- company declared and paid cash dividends
ment charge should increase timely pay- of $10 million and recorded depreciation
ments by customers and increase the re- expense in the amount of $25 million. The
ceivables turnover ratio. company considers dividends paid a financ-
ing activity. The company’s 2021 cash
B. The receivables turnover ratio is de- flow from operations (in $ millions) was
creasing, which reflects that Kleen-Up is closest to:
reducing the time it takes for customers
to pay.
C. Customers are paying faster and
Kleen-Up is charging more to increase rev-
enues. A. 25
D. Kleen-Up is eliminating sales on ac- B. 45
count for the future. C. 75
119. Refer to Figure 4.04-K. Which combina- D. none of above
tion of ratios would most likely be pre-
122. The creative chief executive of a corpo-
ferred by a short-term creditor concerned
ration who is personally responsible for
with a company’s ability to meet its finan-
numerous inventions and innovations is
cial obligation to the creditor?
not reported as an asset on the corpora-
tion’s balance sheet. The accounting prin-
ciple/guideline that prevents the corpora-
tion for reporting this person as an asset
is
A. Combination 1 A. Cost
B. Combination 2 B. Going concern
C. Combination 3 C. Conservation
D. Combination 4 D. none of above
123. On which financial statement would the
120. Under PFRS for Small Entities, any
Dividends account appear?
changes in accounting estimates are ac-
counted for A. Balance Sheet
A. Retroactively by adjusting opening bal- B. Income Statement
ance of retained earnings C. Retained Earnings Statement
B. Retroactively by adjusting ending bal- D. Statement of Cash Flows
ance of retained earnings
124. The objective of financial reporting ac-
C. Prospectively by including it in Profit or cording to PSAK 1 is
Loss A. As a reference for users of financial re-
D. Prospectively but need to restate the ports in interpreting the information pre-
financial statements sented in financial reports

B. As a reference for auditors in provid- which were damage in transit. You have
ing opinions regarding whether financial estimated that it will cost $360 to repair
reports are prepared in accordance with the items, and they can then be sold for $1,
financial accounting standards 200. What is the correct inventory val-
C. As a reference for the accounting stan- uation for inclusion in the financial state-
dards drafting committee in carrying out ments?
its duties A. $39, 915
D. Providing information about the finan- B. $40, 755
NARAYAN CHANGDER
cial position, financial performance and C. $41, 515
cash flow of an entity that is useful for
D. $42, 995
most users of financial reports in making
economic decisions. 129. Listed below are some comments on ac-
counting concepts.1. Financial statements
125. The total amount of assets minus the to- always treat the business as a separate
tal amount of liabilities will give you the entity.2. Materiality means that only
worth of your business items having a physical existence may be
A. Liabilities recognised as assets.3. Provisions are es-
B. Accounts Payable timates and therefore can be altered to
make the financial results of a business-
C. Owner’s Equity more attractive to investors.Which, if any,
D. none of above of these comments is correct, according
to the IASB’s Conceptual Framework for-
126. Contains the meaning of being able to be Financial Reporting?
compared with financial reports in previ-
A. 1 only
ous periods and with other companies.
B. 2 only
A. Understandability
C. 3 only
B. Comparability
D. None of them
C. Relevance
D. Reliability 130. Which of the following is an ethical con-
cern of accountants?
127. Which of the following is a twelve- A. Earnings manipulation.
month reporting cycle that can begin in any
B. Conservative accounting.
month, except January 1, and records fi-
nancial data for that twelve-month consec- C. Industry practices.
utive period? D. None of the above.
A. Fiscal year 131. An analyst is interested in assessing both
B. Calendar year the efficiency and liquidity of Spherion
C. Interim period PLC. The analyst has collected the follow-
ing data for Spherion.Based on this data,
D. Fixed year what is the analyst least likely to con-
clude?
128. You are preparing the financial state-
ments for abusiness. The cost of the items
in closing inventory is $41, 875. This in-
cludes some items which cost $1, 960 and

A. Inventory management has con- B. A, C, D All are correct

tributed to improved liquidity. C. Designed to encourage professional

B. Management of payables has con- judgment and prevent over-reliance on de-
tributed to improved liquidity. tailed rules.
C. Management of receivables has con- D. It is a contrast to the rules-based ap-
tributed to improved liquidity. proach
D. none of above 135. What effect does a framework have on
an accountant’s need to exercise profes-
132. Refer to Figure 4.04-L. Based on the eq-
sional judgement?
uity per share for the past three years,
which company is showing a favorable A. Reduces the scope for professional
trend in the shareholder ownership of the judgment.
company assets? B. Increases the scope for professional
judgment.
C. Eliminates the scope for professional
judgment.
D. Has no impact on the scope for profes-
sional judgment.
136. Which appears on balance sheet?

A. Capital
A. Company W
B. Rental expense
B. Company X
C. Loans
C. Company Y
D. Sales
D. Company Z
E. Cash
133. Refer to Figure 4.03-H. Based on this in- 137. An entity granted a share appreciation
formation, what is the ratio of stockhold- right to the CEO on January 1, 2022. Af-
ers’ equity to liabilities for the company? ter a 3-year service, the employee is en-
preciation in share price over the market
A. 1.33 to 1 mining the compensation. The share op-
B. 1.60 to 1 tion right has the following terms:Service
C. 2.00 to 1
2024Number of shares-100, 000Exercise
D. 8.00 to 1 date-January 1, 2025The quoted prices of
the entity’s share are:January 1, 2022-
134. Principles-Based Approach to Accounting 150December 31, 2022-155December
Standard Setting 31, 2023-152December 31, 2024-
A. Attempts to limit additional accounting 160Suppose the market value of share
guidance drops on December 31, 2024 from 160 to

151.What is the debit entry on December 141. Qualitative characteristics that make use-
31, 2024. ful information more useful include
A. Accrued Salaries Payable-200, 000 A. Relevance
B. Accrued Salaries Payable-100, 000 B. Faithful representation
C. Salaries Expense-100, 000 C. Comparability
D. Salaries Expense-200, 000 D. All of these
NARAYAN CHANGDER
138. Refer to Figure 1.04-F. The January 1 142. For 2009, Flamingo Products had net in-
beginning inventory was valued at $225, come of $1, 000, 000. At 1 January
000. What is the correct adjusting entry 2009, there were 1, 000, 000 shares out-
to journalize Merchandise Inventory-PCs? standing. On 1 July 2009, the company
issued100, 000 new shares for $20 per
share. The company paid $200, 000 in
dividendsto common shareholders. What
is Flamingo’s basic earnings per share for
2009?
A. $0.80
B. $0.91
A. Debit Income Summary-PCs, $225, C. $0.95
000; credit Merchandise Inventory-PCs,
$225, 000 D. none of above
B. Debit Income Summary-PCs, $85, 700; 143. ABC Co. follows the accrual basis of ac-
credit Merchandise Inventory-PCs, $85, counting and performs a service on account
700 (on credit) in December. The service was
C. Debit Merchandise Inventory-PCs, billed at the agreed upon amount of $3,
$85, 700; credit Income Summary-PCs, 500. ABC Co. debited Accounts Receiv-
$85, 700 able for $3, 500 and credited Service Rev-
enue for $3, 500. The effect of this entry
D. Debit Merchandise Inventory-PCs,
on the balance sheet of ABC is to increase
$45, 700; credit Income Summary-PCs,
assets by $3, 500 and to
$45, 700
A. Increase Owner’s (Stockholders’) Eq-
139. Can you delete a Commission Report that uity By $3.500
has already Marked-As-Paid (Paid)
B. Decrease Assets By $3, 500
A. No
B. Yes 144. Which of the following is an example of
a financing activity on the cash flow state-
140. Removal of directors can be done by ment under US GAAP?
A. Central Government A. Payment of interest
B. Company B. Receipt of dividends
C. Tribunal C. Payment of dividends
D. B&C D. none of above

145. All U.S. businesses uses the same sys- D. Accountability

tem which follows established accounting E. Rules
guidelines called “generally accepted ac-

counting principles.” or 150. The owner is a separate person to the
business. This is based on the
A. GAAP
A. Business entity concept
B. GAAPS
B. Monetary measurement concept
C. GAAPs
C. Accrual concept
D. none of above
D. Dual aspect concept
146. When an entity presents a semi-annual
151. The purpose of comprehensive income re-
statement of financial position dated as at
porting is
June 30, 20x1, the comparative informa-
tion is dated as at June 30, 20x0. A. To report changes in equity based on
transactions with owners.
A. FALSE
B. To report overall company perfor-
B. TRUE
mance.
147. one of the accounting professions that is C. To link net profit (net income) to be bet-
very necessary in the era of industrial rev- ter.
olution 4.0, namely D. Untuk menggabungkan income from
A. compile the amount/data of purchases continuingoperations dengan income
and sales in the report book from discontinued operationsdan extraor-
B. as a provider of financial information dinary items.
and provides analysis of the financial data 152. The debts of the business
C. record the amount of incoming cash A. Liabilities
manually
B. Accounts Payable
D. perform customer data entry
C. Owner’s Equity
148. Who issues International Financial Re- D. none of above
porting Standards?
153. Which basic assumption may not be fol-
A. The IFRS Advisory Committee lowed when a firm in bankruptcy reports
B. The stock exchange financial results?
C. The International Accounting Stan- A. Economic entity assumption
dards Board B. Going concern assumption
D. The government C. Periodicity assumption
149. Accounting is considered as a means of D. Monetary unit assumption
providing an overview of transactions car- 154. Refer to Figure 4.03-E. Based on the in-
ried out with the environment in the past. formation provided, what is the return
This is the nature of accounting as (rate earned) on net sales?
A. Catatan historis
B. Economic reality
C. Information Systems

A. 16.8% provides information about his company’s

B. 29.2% sources of financing and how he is using
the money. Can Lily or Emily help him?
C. 45.2%
A. Balance Sheet
D. 74.4%
155. Cash or other items that can be converted C. Cash Flow Statement
to cash fairly quickly and are used by the
business within a year ex:cash, supplies, D. Statement of Income
NARAYAN CHANGDER
merchandise, accounts receivable
159. Under PFRS for Small Entities, Invento-
A. Assets ries are subsequently measured using
B. Current Assets A. Cost
C. Accounts Receivable B. Lower of Cost or Market Value
D. Fixed Assets C. Lower of Cost or Cost of Estimated Sell-
ing Price less cost to complete and Sell
156. Harmonization Efforts from IOSCO
D. Lower of Cost or Net Realizable Value
A. Works to achieve improved market
regulation internationally. 160. Judging from the picture, the profit and
B. Works to facilitate cross-border list- loss report and comprehensive income
ings. statement in this report are presented in
C. Advocates for the development and the format
adoption of a single-set of high quality ac-
counting standards.
D. A, B, C True
157. A business compiling its financial state-

ments for the year to 31 January each
year pays rent quarterly in advance on 1
January, 1 April, 1 July and 1 October each
A. one step
year. After remaining unchanged for some
years, the rent was increased from $24, B. two steps
000 per year to $30, 000 per year as from C. Account type
1 July 20X0. Which of the following fig-
D. bundling
ures in the rent expense which should ap-
pear in the statements of profit or less for 161. Defining total asset turnover as revenue
year ended 31January 20X1? divided by average total assets, all elsee-
A. $27, 500 qual, impairment write-downs of long-
B. $29, 500 lived assets owned by a company will
most likely result in an increase for that
C. $28, 000 company in:
D. $29, 000 A. the debt-to-equity ratio but not the to-
158. Charlie started a small business and he tal asset turnover.
is trying to understand his financials. He B. the total asset turnover but not the
wants to know which financial statement debt-to-equityratio.

C. both the debt-to-equityratio and the to- 166. What Financial Statement Assertion is
tal asset turnover. not covered by FR-01 and FR-02?

D. none of above A. Completeness
162. The going concern concept is B. Accuracy

C. Validity
A. Reporting numbers without calculating
inflation D. Restricted Access
B. Reporting accounting info at regular in- 167. In preparing a new standard, after
tervals preparing the initial draft of a new stan-
C. Not overstating assets owner’s equity, dard, the stages carried out by the stan-
and revenues and not understating abili- dards council in Indonesia are
ties and expenses A. Conduct public hearings
D. Assuming that a business will continue B. Discussion within the standards coun-
to operate for the foreseeable future cil
163. One of the notable differences between C. Launch exposure draft
PFRS for SMEs and PFRS for Small Entities D. Draft approval becomes the new stan-
is that PFRS for SMEs includes Other Com- dard
prehensive Income while PFRS for Small
Entities does not have other comprehen- 168. Which of the following is not other com-
sive incomes. prehensive income?
A. True A. Profit/Loss from discontinued opera-
tions
B. False
B. Gains and losses on increases in asset
164. White Flag, a women’s clothing manufac- value are presented using fair value
turer, reported salaries expense of $20 C. Profit/loss from foreign currency
million. The beginning balance of salaries translation
payable was $3 million, and the ending
D. Profit/loss from effective cash flow
balance of salaries payable was $1 mil-
hedging
lion. How much cash did the company pay
in salaries? 169. It shows the financial condition of the en-
A. $18 million. tity as at a certain date
B. $21 million. A. Statement of Financial Condition
C. $22 million. B. Statement of Financial Position
D. none of above C. Statement of Financial Disposition
D. none of above
165. Which of the following accounting con-
cepts means that similar items should re- 170. Prepaid rent on September 30, 2021 was
ceive a similar accounting treatment? recorded as prepaid rent of Rp. 9, 000,
A. Going Concern 000 for a period of 10 months. The correct
adjusting entry on December 31, 2021
B. Accrual is
C. Matching A. Rent Expense (D) Rp. 3.600.000Pre-
D. Consistency paid Rent (K) Rp. 3.600.000

B. Rent Expense (D) Rp. 2.700.000Pre- 174. Which of the following best describes the
paid Rent (K) Rp. 2.700.000 role of financial statement analysis?
C. Rent Expense (D) Rp. 9.000.000Pre- A. To provide information about a com-
paid Rent (K) Rp. 9.000.000 pany’s performance
D. Prepaid Rent (DR) Rp. 6.300.000 Rent B. To provide information about a com-
Expense (KRp. 6.300.000 pany’s changes in financial position
C. To form expectations about a com-
171. Recording assets and services, revenues,
NARAYAN CHANGDER
pany’s future performance and financial
and expenses at their actual historical cost
position
falls under which principle?
D. none of above
A. Reliability
B. Cost 175. Which is not a category of Company
Fixed Assets?
C. Consistency
A. Grafity Roller
D. Matching
B. X-Ray
172. Foreign companies listed on an exchange C. Pallet
in Malaysia are now given a choice of
using either MASB Standards or interna- D. Blind Van
tionally recognised accounting standards
176. Break-even point is
in their entirety for the preparation of fi-
nancial statements. The accounting stan- A. where all costs equal all revenues
dards issued by the following bodies are B. where fixed costs equal revenues
acceptable accounting standards for this
purpose except: C. where variable costs equal revenues
D. when costs excced revenues
A. International Accounting Standards
Board 177. Recognition is the process of:
B. Financial Accounting Standards Board, A. Determining where an item should be
USA presented in the financial statements
C. United Arab Emirates Accounting Stan- B. Incorporating an item in the financial
dards statements
D. Australian accounting Standards C. Disclosing information in the notes to
Board, Australia the financial statements
173. Users of accounting information who D. Determining the amount at which an
want accounting information that makes it item should be shown in the financial
possible to provide loans are: statements
A. Creditor 178. When is Impairement Reserve created:
B. Businessman A. When ECL > IRAC provision
C. Manager B. When ECL < IRAC provision
D. Government C. None of the Above
E. Persero D. none of above

179. The accountant for the Eckland Company B. Reliability i.e. the usefulness of deci-
is preparing a Statement of Gross Profit sions on fair value based Financial State-
with Component Percentages. Based on ments is compromised if too much reliabil-

the information provided, what is the Mer- ity is sacrificed for greater relevance
chandise Available for Sale for the Clothing C. Management skepticism regarding
Division? Review Figure 1.03-A RRA (Reserve Accounting), if there are
unrealized profits & losses from changes
in fair value contained in net PROFIT,
D. Management cannot possibly manipu-
late financial reports
E. all answers are correct
A. $35, 500
B. $48, 000 183. Which of the following statements about
the primary purpose of financial reporting
C. $68, 000 is the most correct?
D. $88, 500 A. Provides information that can help
with decision-making.
180. If an entity adopts PFRS for the first time
in the current year, its first PFRS financial B. The individual needs of users can be
statements include the following: satisfied by tailoring of financial reports.
C. Enables accountability since man-
A. Two statement of comprehensive in-
agers would have to account for re-
come
sources used.
B. Two statement of financial position
D. Identifies a range of existing and po-
C. Three statement of cash flows tential users dependant on financial state-
D. None of the above ments to make decisions.
184. Purple Fleur S.A., a retailer of floral prod-
181. Decision makers vary widely in the types
ucts, reported cost of goods sold for the
of decisions they make, the methods of de-
year of $75 million. Total assets increased
cision making they employ, the informa-
by $55 million, but inventory declined
tion they already possess or can obtain
by $6 million. Total liabilities increased
from other sources, and their ability to pro-
by $45 million, and accounts payable in-
cess information. Consequently, for infor-
creased by $2 million. The cash paid by
mation to be useful there must be a link-
the company to its suppliers is most likely
age between these users and the decisions
closest to:
they make. This link is
A. $67 million.
A. Relevance
B. $79 million.
B. Reliability
C. $83 million.
C. Understandability
D. none of above
D. Materiality
185. Which of the following statements is
182. Relevant information is: most accurate?
A. that information tells investors about A. As it general rule, it is sufficient for an
the company’s future economic prospects. Analyst covering an industry to be familiar

with Financial standards and regulations B. worksheet

in his/her country of residence C. worksheet plus general journal
B. An analyst should familiarize D. all of the above are possible
him/herself with the regulations and re-
porting standards that affect the company 190. What is the Return on Investments for
and/or industry that he/she analyzing 9M 2022 on Total 9M 2021?ROI=(Net
C. An analyst should be aware that Finan- Return on Investment/Cost of In-
cial reporting standards vary among coun- vestment)*100%*Time effectAnnualiza-
NARAYAN CHANGDER
tries and may be industry specific tut stan- tion1st Q (12/3 =4) 2nd Q (12/6=2) 3rd
dards are so simile that Analyst does not Q (12/9=1, 3333) 4th Q (12/12=1)
have to be concerned about it A. 1, 7%
D. none of above B. 1, 3%
186. A very large business has a small amount C. 3%

of stationery in hand at the end of the fi- D. 1, 6%
nancial year. It does not make an effort to
record it. Which of the following concepts 191. Which of the following stakeholders re-
is being applied? lies on financial reports to make invest-
ment decisions?
A. Accounting entity
A. Competitors
B. Going concern
B. Customers
C. Monetary
C. Suppliers
D. Materiality
D. Shareholders
187. Which of the following is not the enhanc-
192. Petty cash method where journalizing is
ing qualitative characteristics of financial
done when replenishing
information?
A. Imprest Fund System
A. Comparability
B. Fluctuative Fund System
B. Relevance
C. Direct Write Off Method
C. Verifiability
D. Allowance Method
D. Timeliness
193. Under PAS 34, interim financial reports
188. In what principle states that one must
should be published
base accounting records and statements on
the most accurate data available? A. Once a year at any time in that year.
A. Cost B. Within a month of the half year end.
B. Matching C. On a quarterly basis.
C. Consistency D. Whenever the entity wishes.
D. Reliability 194. What is the Return on Investments
for 9M 2022 on Corporate Solu-
189. The source of data for preparing closing tions?ROI=(Net Return on Invest-
entries is the: ment/Cost of Investment)*100%*Time
A. trial balance effectAnnualization1st Q (12/3 =4) 2nd

Q (12/6=2) 3rd Q (12/9=1, 3333) 4th B. A company’s debts and liabilities at a

Q (12/12=1) specific point in time

A. 1, 4% C. the number of employees in the orga-
B. 1, 3% nization
C. 3% D. The company’s social media followers
D. 1, 9% and engagement
195. Qualitative characteristic that financial 200. The adjusting entry to record an accrued
information must possess to be useful to expense results in which of the following
the primary users of general purpose fi- types of accounts being debited and cred-
nancial reports include ited?
A. Timeliness A. Asset/Revenue
B. Verifiability B. Asset/Liability
C. Understandability C. Expense/Asset
D. Faithful representation
D. Expense/Liability
196. Who shall mandatorily appoint Indepen-
dent Directors? 201. Brown Corporation had average days of
sales outstanding of 19 days in themost
A. Listed Public Company
recent fiscal year. Brown wants to im-
B. Public Company having:PUC ≥ Rs. 10 prove its credit policies and collectionprac-
Cr.; or Turnover ≥ Rs. 100 Cr.; or Out- tices and decrease its collection period in
standing Loans, Debentures & Deposits ≥ the next fiscal year to matchthe industry
Rs. 50 Cr. average of 15 days. Credit sales in the
C. (a) and (b) most recent fiscal year were$300 million,
and Brown expects credit sales to increase
D. None of the above
to $390 million in thenext fiscal year. To
197. Income statement or Profit and Loss ac- achieve Brown’s goal of decreasing the col-
count = Inflow minus Outflow. lection period, thechange in the average ac-
counts receivable balance that must occur
A. TRUE
is closest to:
B. FALSE
A. +$0.41 million.
198. Which of the following is a category, clas-
B. -$0.41 million.
sification, or element of the balance sheet?
A. Expenses C. -$1.22 million.
B. Liabilities D. none of above

C. Gains 202. What is not a type of company is:
D. Losses
A. Private company
199. What does the balance sheet in financial B. Service Company
reporting show?
C. Trading Company
A. A company’s revenues and expenses
over a specific period D. Industrial company

203. Which of the following is any reporting B. Salah

period shorter than a full year (fiscal or cal-
208. By default which are the available tem-
endar) and can encompass monthly, quar-
plates for Policy Table Report.
terly, or half-year statements?
A. Policy Report (including version)
A. Calendar year
B. Policy Report (full version)
B. Fixed year
C. Policy Report (excluding version)
C. Fiscal year
D. Policy Report (half version)
NARAYAN CHANGDER
D. Interim period
209. a set of interrelated concepts that deter-
204. The following is not a function of the fi- mine the function, scope and objectives of
nancial reporting conceptual framework accounting and financial reporting. In Aus-
A. Serves as a guide for standard setters tralia, the SAC (Statement of Accounting
in preparing new standards Concepts) represents the constitution for
B. As a guide for companies in preparing financial reporting.
accounting policies in the event that there A. Thinking Framework
are no applicable standards B. conceptual framework
C. As a source of additional explanation C. Framework
of a standard D. Shadow Skeleton
D. As a guide in preparing accounting poli-
cies in terms of standards that conflict 210. Represent advance payments made for
with the conceptual framework expenses which have not yet been in-
curred, used, utilized or consumed.
205. All businesses use the same system, A. Accrued Expenses
which follows established accounting
B. Unearned Expenses
guidelines called “generally accepted ac-
counting principles” C. Prepaid Expenses
A. GAAP D. Accounts Expense
B. Financial Statements 211. What group that was created last
November 1991?
206. A company receives advance payments
from customers that are immediatelytax- A. ASC
able but will not be recognized for account- B. IASB
ing purposes until the companyfulfills its C. IFAC
obligation. The company will most likely
D. None of the above.
record:
A. a deferred tax asset. 212. It is assumed that the IndoJaya company
purchased a production machine with a
B. a deferred tax liability. cash price of Rp. 70, 000, 000, -. Re-
C. no deferred tax asset or liability. lated expenses include VAT Rp. 3, 000,
D. none of above 000, travel insurance Rp. 500, 000, and
installation of Rp. 1, 000, 000, -. Calcu-
207. Investors study the company’s ROI late the amount that should be reported as
trends = confirmatory value the cost of the machine
A. Correct A. Rp. 70.000.000

B. Rp. 73.000.000 217. Refer to Figure 4.03-C. Based on this in-

C. Rp. 74.000.000 formation, what is the quick ratio for the
company?

D. Rp, 74.500.000
213. The obligation of the contractor to sell the

contractor’s share of oil for domestic needs
at a price below market price, is defined
as: A. 0.80 to 1
B. 1.25 to 1
A. FTP
C. 1.59 to 1
B. Cost Recovery
D. 3.13 to 1
C. DMO
D. DMO fee 218. The of an asset is the estimated
amount that an entity would currently ob-
214. Sales revenue should be recognised when tain from disposal of the asset, after de-
goods and services have been supplied; ducting the estimated costs of disposal, if
costs are incurred when goods and ser- the asset were already of the age and in
vices have been received.Which accounting the condition expected at the end of its
concept governs the above? useful life.
A. The business entity concept A. Residual value
B. The materiality concept B. Value in use
C. The accruals concept C. Carrying value
D. The duality concept D. Depreciable value
215. Anaya, Samuel, and Grace are study- 219. The two accounting assumptions are:1st
ing for their business exam. They come assumption:your business operates as a
across a question:‘What financial state- separate entity from your personal fi-
ment provides information about a com- nances 2nd assumption:your financial re-
pany’s sources of income and expenses?’ ports always cover a specific period of
Can you help them answer this? time
A. Balance Sheet A. True
B. Statement of Financial Position B. False
C. Cash Flow Statement 220. Arthur, Kiara, and Thomas are studying
D. Statement of Income for their finance exam. They are dis-
cussing about a financial statement that
216. Which of the following accounts will not provides information about a company’s
be closed to a profit and loss summary ac- cash inflows and outflows. Can you tell
count? them which statement it is?
A. Services revenue A. Balance Sheet
B. Depreciation Expense B. Statement of Financial Position
C. Dividend C. Cash Flow Statement
D. Accumulated Depreciation D. Statement of Income

221. Anything of value that the business owns 226. The three major classifications of activi-
ex:cash, equipment, buildings ties in a cash flow statement are:
A. Assets A. inflows, outflows, and net flows
B. Current Assets B. operating, investing and financing
C. Accounts Receivable C. revenues, expenses, and net income
D. Fixed Assets D. none of above
NARAYAN CHANGDER
222. The impairment of intangible assets with
227. If tested more than once by different par-
finite lives affects:
ties, the results show conclusions that are
A. the balance sheet but not the income not much different
statement.
A. relevant
B. the income statement but not the bal-
ance sheet. B. reliable
C. both the balance sheet and the income C. can be compared

statement. D. understandable
D. none of above
228. Which of the following disclosures re-
223. Which is correct? garding new accounting standards pro-
vides the most meaningful information to
A. IAS35 Intangible Assets
an analyst?
B. IAS36 Intangible Assets
A. The impact of adoption is discussed.
C. IAS37 Intangible Assets
B. The standard will have no material im-
D. IAS38 Intangible Assets pact.
224. Another term for Creative Accounting C. Management is still evaluating the im-
is pact.
A. aggressive accounting D. none of above
B. earning management
229. Refer to Figure 4.03-B. Based on the in-
C. impression management formation provided, what is the debt ratio
D. profit smoothing for the company?
E. bank robbery
225. is a regulatory body that is responsi-

ble to develop and regulate capital market
in Malaysia.
A. Malaysian National Bank
A. 12%
B. Malaysian Accounting Standards
Board B. 30%
C. Securities Commission C. 42%
D. Registrar of Companies D. 58%

230. The most likely company to use a C. Government and its agencies have an
liquidity-based balance sheet presentation interest in information about the contin-
is a: uance of an enterprise especially when

A. bank. they have long-term involvement or are
dependent on the enterprise.
B. computer manufacturer holding inven-
tories. D. Employees and their representative
groups are interested in information
C. software company with trade receiv- about the stability and profitability of the
ables and payables. entity
D. none of above
234. Financial reports must be presented on
231. Refer to Figure 4.04-K. Which combina- time
tion of ratios reflects the company most A. relevant
likely to be in danger of failing?
B. reliable
C. can be compared
D. understandable
235. William and Benjamin are studying for
A. Combination 1 their business exam. Ava, their tutor,
B. Combination 2 asks them, ‘Which financial statement
C. Combination 3 would you look at to find information
about a company’s assets and liabilities?’
D. Combination 4
A. Balance Sheet
232. How does financial reporting contribute B. Statement of Financial Position
to transparency in a company?
A. By keeping all financial information
confidential D. Statement of Income
B. By disclosing only favorable financial 236. Accounting information is considered to

data be relevant when it
C. By providing accurate and comprehen- A. Is capable of making a difference in a
sive financial information to stakeholders decision
D. By sharing misleading information B. Is verifiable and neutral
about the company’s performance C. Can be depended on to represent the
economic conditions and events that it is
233. Which statements is false concerning
intended to represent
users and their information needs?
D. Is understandable by reasonably in-
A. Lenders are interested in information
formed users of accounting information
that enables them to determine whether
their loans and the interest on these loans 237. Jabroni’s Meat Market recorded divi-
will be paid when due dends of $30, 000. The correct journal
B. The providers of risk capital and their entry to record the closing entry for the
advisers are concerned with the risk in- Dividends account is:
herent in, and return provided by their in- A. Debit Retained Earnings, $30, 000;
vestment credit Dividends Payable, $30, 000.

B. Debit Dividends Payable, $30, 000; 242. It identifies the sources of cash inflows,
credit Retained Earnings, $30, 000. the items on which cash was expended
during the reporting period, and the cash
C. Debit Dividends, $30, 000; credit Re-
balance as at reporting date
tained Earnings, $30, 000.
A. Statement of Cash Flows
D. Debit Retained Earnings, $30, 000;
credit Dividends, $30, 000. B. Statement of Cash Inflows
C. Statement of Cash Inflows
238. Which of the following is most likely to
NARAYAN CHANGDER
appear in the operating section of a cash D. Statement of Cash Balance
flow statement under the indirect method?
243. In case of first time implementation of Ind
A. Net income AS, there is an option to record PPE at:
B. Cash paid to suppliers A. Fair value
C. Cash received from customers B. Cost
D. none of above C. Both of the above
239. Harmonization D. none of above
A. Is different from standardization. 244. An entity may decide to include income or
B. Harmonization allows for different expenses in other comprehensive income
standards in different countries as long as when doing so would result in the state-
there are not logical conflicts. ment of profit or loss providing more rel-
evant information, or providing a more
C. Standardization involves using the faithful representation of the entity’s per-
same standards in different countries. formance for the period
D. C, B, A true A. True
240. Which groups of people are most likely to B. False
be interested in the financial statements of
a sole trader?1. Shareholders of the com- 245. On 31 December 2021. a company is-
pany2.The business’s bank manager3. The sued a $30 000 180-day note at 8 per-
tax authorities4. Financial analysts cent, using the cash received to pay for in-
ventory, and issued $110 000 long-term
A. 1 and 2 only debt al 11 percent annually, using the
B. 2 and 3 only cash received to pay for new equipment.
Which of the following most accurately re-
C. 2, 3 and 4 only flects the combined effect of both trans-
D. 1, 2 and 3 only actions on the company’s cash flows for
the year ended December 31 2021 under
241. Bank overdraft is generally presented as IFRS? Cash flows from:
A. Current assets A. Operations are unchanged
B. non-current assets‘ B. Financing increase $110, 000
C. short term liabilities C. Operating decrease $30, 000
D. long-term obligation D. none of above

246. Closing entries are made at the end of the B. 60 crore

fiscal period so that: C. 70 crore

A. the balance sheet will be up to date D. 130 crore
B. the Capital account will be up to date
250. Benefits of Global GAAP Harmonization
C. the income statement accounts will be-
A. Capital markets have become broader,
gin the next fiscal period with a zero bal-
and capital investment can move through-
ance
out the world without any obstacles.
D. both b) and c)
B. High-quality financial reporting stan-
247. These are those intended to meet the dards are used consistently throughout
needs of users who are not in a position the world and improve efficiency in capi-
to demand reports tailored to meet their tal allocation
particular information needs. C. Investors can make better investment
A. General Purpose Financial Statements decisions, portfolios will be more diverse
and financial risks will be reduced
B. Special Purpose Financial Statements
D. Companies can improve the strategic
C. All Purpose Financial Statements decision making process in the field of
D. none of above mergers and acquisitions.
E. A, B, C, D Benar
248. Which of the following statements is
most likely not true regarding standards 251. The main objectives of the IASB Frame-
for interim reporting? work are
A. Declines in inventory value should be A. to present information that is useful
deferred to future interim periods. for decision making
B. Use of the gross margin method for B. to falsify information that is useful for
computing cost of goods sold must be dis- decision making
closed. C. to distort information that is useful for
C. Costs and expenses not directly asso- decision making
ciated with interim revenue must be allo- D. to prevent information that is useful
cated to interim periods on a reasonable for decision making
basis.
D. Gains and losses that arise in an in- 252. An analyst compiles the following data
terim period should be recognized in the for a company.Based only on the informa-
interim period in which they arise if they tion above, the most appropriate conclu-
would not normally be deferred at year- sion is that, over the period FY13 to FY15,
end. the company’s:
249. Calculate Networth for the purpose of de-

termining applicability of Ind AS in case
of NBFC:Securities Premium:70 crores De-
ferred Expenditure:30 crores Capital re- A. net profit margin and financial lever-
serve out of promoters contribution:20 age have decreased.
crore Revaluation Reserve:10 crore B. net profit margin and financial lever-
A. 100 crore age have increased.

C. net profit margin has decreased but its 257. Which of these transactions requires an
financial leverage has increased. adjusting entry (debit) to Unearned Rev-
D. none of above enue?
A. Revenue earned before being col-
253. Companies do not use fair value because lected, when it is later collected
market value = expense recognition is not
available B. Revenue collected but not yet earned
A. Correct C. Revenue earned but not yet collected
NARAYAN CHANGDER
B. Salah D. Revenue collected before being
earned when it is later earned
254. A business purchased a motor car on 1
July 20X3 for $20, 000. It is to be de- 258. Revenues and expenses must be
preciated at 20 per cent per year on the recorded in the accounting period in which
straight line basis, assuming a residual they were earned or incurred, no matter
value at the end of five years of $4, 000, when cash receipts or outlays occur under
with a proportionate depreciation charge which of the following accounting meth-
in the years of purchase and disposal. The ods?
$20, 000 cost was correctly entered in the A. Cash basis accounting
cashbook but posted to the debit of the B. Tax basis accounting
motor vehicles repair account.How will the
business profit for the year ended 31De- C. Accrual basis accounting
sember 20X3 be affected by the eror? D. Revenue basis accounting
A. Understated by $18, 400 259. The continuity concept is an idea that a
B. Understated by $16, 800 business is separate and distinct from its
C. Overstated by $18, 400 owner/owners and from any other busi-
ness.
D. Overstated by $16, 800
A. True
255. Accrual accounting is used because B. False
A. cash flows are considered less impor-
tant. 260. What is not a service company is:
B. it provides a better indication of abil- A. Accounting firm

ity to generate cash flows than the cash B. PPAT
basis. C. Vehicle rental
C. it recognizes revenues when cash is D. Drugstore
received and expenses when cash is paid.
D. None of these answers are correct 261. To be a faithful representation as de-
scribed in the Conceptual Framework, in-
256. Which financial report content can be cus- formation must be all of thefollowing, ex-
tomized cept
A. Slip A. Complete
B. Policy B. Free from error
C. Prospect C. Confirmatory
D. Commission Inbox D. Neutral

262. Which of the following has the highest 267. Which appears on income statement?
authoritative support? A. Account receivables

A. International Financial Reporting Stan- B. Sales
dards.
C. Depreciation
B. International Accounting Standards.
D. Debentures
C. Interpretations of the IFRIC.
E. Advertising expense
D. Framework for Financial Reporting.
268. How many financial statements are
263. Every transaction that records both debit
there?
and credit entry is:
A. 2
A. Single entry system of book-keeping
B. 3
B. Double Entry system of book-keeping
C. 4
C. Cash basisof accounting
D. 1
D. accrual basis
269. The elements of financial statements
264. In preparing opening statement of finan-
which relate to financial position are:
cial position, an entity is required to:
A. Assets, liabilities and equity
A. Recognize all assets and liabilities
B. Income and expenses
B. Derecognize all assets and liabilities
required by PFRS. C. Assets, liabilities, income and ex-
penses
C. Measure all recognized assets and lia-
bilities in compliance with PFRS. D. Income, expenses and equity
D. All of the above. 270. George started a new business and Leo
is his accountant. Leo is preparing a finan-
265. It shows the results of operation of the
cial statement that provides information
entity at the end of a particular period.
about the company’s sources of financing
A. Statement of Financial Operation and how it is using the money. Which fi-
B. Statement of Financial Results of Oper- nancial statement is Leo preparing?
ation A. Balance Sheet
C. Statement of Financial Performance B. Statement of Financial Position
D. none of above C. Cash Flow Statement
266. When a reporting entity is not a legal en- D. Statement of Income
tity and does not comprise only legal en-
tities all linked by a parent-subsidiary re- 271. How can financial reporting aid in detect-
lationship, the boundary of the reporting ing financial fraud?
entity can contain an incomplete set of eco- A. By ignoring financial statements and
nomic activities if that entity provides a focusing on social media reviews
description of how the boundary was de- B. By analyzing revenue from different
termined marketing campaigns
A. True C. By identifying inconsistencies and
B. False anomalies in financial data

D. By comparing employee satisfaction A. 1 and 2

levels B. 2 and 3
272. What is Mydeco’s enterprise value (EV) C. 1 and 4
at the end of 2019? D. 3 and 4
A. $1, 100 million
276. What is the entity concept?
B. $1, 113.95 million
A. Assume the business will continue to
C. $1, 120 million
NARAYAN CHANGDER
operate for the foreseeable future
D. $1, 150 million
B. A boundary is drawn around each orga-
Explanation:To calculate enterprise value,
nization. This means personal assets and
take current shareholder price-for a pub-
expenses are not part of the company
lic company, that’s market capitalisation.
Add outstanding long term debt and then C. You only use GAAP for things that re-
subtract available cash. Enterprise value ally make a difference or are significant
is often used to determine acquisition to the company
prices.We subtract cash from the com- D. You have to report accounting info at
pany’s total debt so to get to net debt-if regular intervals
you buy the company and inherit its liquid
assets, the cash and liquid assets can off- 277. What is the importance of financial re-
set some of the total debt, leaving only porting for regulatory authorities?
the company’s net debtFor Mydeco Corp., A. To monitor social media marketing
it would be:598.95 + 600-85 = 1, 113.95 strategies
273. Mr Lala, the owner of Lala Enterprise, can B. To enforce taxation policies
include his personal property in the finan- C. To control employee salaries
cial statement of Lala Enterprise.
D. To review customer complaints
A. True
278. Which of the following statements about
B. False
accounting concepts and the characteris-
274. Elements of Financial Statements tic of financial information are correct?1.
The concept of accruals requires transac-
A. Definition-assets, liabilities, and other
tions to be reflected in the financial state-
financial statement elements are defined.
ments once the cash or its equivalent is re-
B. Recognition-guidelines as to when to ceived or paid.2. Information is material
recognize revenues and expenses. if its omission or misstatement could influ-
C. Measurement-various bases are al- ence the economics decision of users taken
lowed:historical cost, current cost, realiz- on the basis of the financial statements.3.
able value, and present value. Based on faithful representation, it may
D. A, B, C is true sometimes be necessary to exclude mate-
rial information from financial statements
275. According to the IASB’s Conceptual due to difficulties establishing an accurate
Framework for Financial Reporting, which figure.
TWO of the following are part of faithful A. 1 Only
representation?1. It is neutral2. It is rel-
evant3. It is presented fairly4. It is free B. 1 and 2 Only
from material error. C. 2 Only

D. 2 and 3 Only 283. Which of the following is not an assump-

tion in preparing financial statements?
279. Decision makers vary widely in the types

of decisions they make, the methods of de- A. Cost
cision making they employ, the informa- B. Economic Entity
tion they already possess or can obtain
C. Going Concern
from other sources, and their ability to pro-
cess information. Consequently, for infor- D. Monetary Unit
mation to be useful there must be a link-
age between these users and the decisions 284. Financial Accounting Standards in Indone-
they make. This link is sia adopt
A. relevance A. International Financial Reporting Stan-

dards
B. faithful representation
B. General Accepted Accounting Princi-
C. understandability ples
D. materiality C. Statement of Financial Accounting
Standards
280. Only selected explanatory notes are pro-
vided in interim financial reports prepared D. International Public Sector Accounting
under PAS 1. Standards
A. TRUE 285. International financial reporting stan-
B. FALSE dards are currently developed by which en-
tity?
281. Most businesses operate under accrual
A. The Financial Accounting Standards
basis.
Board.
A. True
B. The International Accounting Stan-
B. False dards Board.
282. Juan Martinez, CFO of VIRMIN, S.A., is C. The International Organization of Se-
selecting the depreciation method to use curities Commissions.
for a new machine. The machine has an ex- D. none of above
pected useful life of six years. Production
is expected to be relatively low initially 286. In the conceptual framework of financial
but to increase over time. The method cho- reporting, it is stated that the purpose of
sen for tax reporting must be the same preparing financial reports is to convey fi-
as the method used for financial reporting. nancial information to
If Martinez wants to minimize tax pay- A. Potential investors
ments in the first year of the machine’s life,
which of the following depreciation meth- B. Current investors and potential in-
ods is Martinez most likely to use? vestors
A. Straight-line method. C. Stakeholders, which include investors,
creditors, employees, government, part-
B. Units-of-productionmethod. ners and the community
C. Double-declining balance method. D. Current and potential investors and
D. none of above creditors.

287. Fairplay had the following information re- C. Debit Federal Income Tax Expense,
lated to the sale of its products during $12, 000; credit Federal Income Tax
2009, which was its first year of busi- Payable, $12, 000
ness:Revenue = $1, 000, 000Returns of D. Debit Federal Income Tax Payable,
goods sold = $100, 000Cash collected = $12, 000; credit Federal Income Tax Ex-
$800, 000Cost of goods sold = $700, pense, $12, 000
000Under the accrual basis of accounting,
how much net revenue would be reported 290. Based on the following information for
on Fairplay’s 2009 income statement? Star Inc., what are the total net adjust-
NARAYAN CHANGDER
A. $200, 000. ments that the company would make to
net income in order to derive operating
B. $900, 000. cash flow?
C. $1, 000, 000.
D. none of above
288. for Financial Statements shall serve

as the covering letter in transmitting the
entity financial statements to the COA,
and other regulatory agencies and other A. Add $2 million.
entities. B. Add $6 million.
A. Statement of Agency Responsibility C. Subtract $6 million.
B. Statement of Management Responsi- D. none of above
bility
291. Based on the standards, income, ex-
C. Statement of Entity Responsibility
penses and other income/expenses must
D. none of above be reported as
289. Refer to Figure 1.04-F. The estimated A. income from operations
Federal Income Tax Expense recorded for B. Earning before tax
the year was $12, 000. What is the cor-
C. Income from discontinued operations
rect adjusting entry to journalize the Fed-
eral Income Tax Expense adjustment? D. Gross income
292. Refer to Figure 1.04-F. Based on this in-

formation, what is the correct adjusting
entry to journalize the Depreciation Ex-
pense for the PCs Department?
A. Debit Federal Income Tax Expense, $1,

800; credit Federal Income Tax Payable,
$1, 800
B. Debit Federal Income Tax Payable, $1,
800; credit Federal Income Tax Expense, A. Debit Inventory-PCs, $6, 700; credit
$1, 800 Accumulated Depreciation-PCs, $6, 700

B. Debit Depreciation Expense-PCs, $6, A.

700; credit Accumulated Depreciation-
PCs, $6, 700

B.
C. Debit Accumulated Depreciation-PCs,
$6, 700; credit Inventory-PCs, $6, 700 C.
D. Debit Accumulated Depreciation-PCs,
$6, 700; credit Depreciation Expense-PCs, D. none of above
$6, 700
295. IASB Framework
293. Cole’s Custom Designs offers custom
skateboards and skateboard gear for sale. A. A. Created to build accounting stan-
Alice is the accountant for the company, dards systematically
and she is currently preparing the Depart- B. B. Created to systematically replace
mental Margin statements. Based on this accounting standards
information, what is the Cost of Merchan-
C. C Presents the basis for presenting
dise Sold the Skateboards Division? Refer
financial statements in accordance with
to Figure 1.03-B
IFRS
D. D. A and C are true
296. Employee salaries are paid every Satur-

day for 6 working days. Employee salary
per person Rp. 50, 000/day. Cafe “Dan-
bam” has 5 employees. The last salary
payment was on December 28 2020. The
adjusting entry at the end of December
2020 was
A. $7, 290 A. Salaries Expense (D); Salaries Payable
(K) Rp. 50.000
B. $, 8700
B. Salaries Expense (D); Salaries Payable
C. $8, 800 (K) Rp. 150.000
D. $15, 500 C. Salaries Expense (D); Salaries Payable
294. An analyst gathered the following infor- (K) Rp. 750.000
mation from a company’s 2021 financial D. Salaries Expense (D); Salaries Payable
statements (in $ millions). Based only (K) Rp. 250.000
on the information above, the company’s
2021 statement of cash flows in the di- 297. Technically, creative accounting provides
rect format would include amounts (in $ accounting choices that allow increasing
millions) for cash received from customers the value of the firm, namely
and cash paid to suppliers, respectively, A. Increase Income and Reduce Assets
that are closest to:
B. Reducing Expenses and Increasing
Debt
C. Increase Assets and Reduce Expenses
D. Lowering Debt and Raising Charges

298. Which of the following statements about C. a qualified opinion with respect to the
the application of IFRS in accordance with transparency of the financial statements.
The Conceptual Framework is the most cor- D. none of above
rect?
A. Entities that are not expected to con- 302. is the process of determining the
tinue in the foreseeable future are to amount of money to recognize and include
prepare their accounts onthenetrealisabl- each element of the financial statements in
evalue assumption. the balance sheet and income statement.
This process concerns the selection of a
NARAYAN CHANGDER
B. Entities may change the valuation and particular measurement basis.
measurement of assets provided they dis-
close the change and its effects in the fi- A. Financial Report Measurement
nancial report. B. Profit and Loss Measurement
C. Entities within the scope of the Cor- C. Ratio Measurement
porations Act can choose to apply Aus- D. Estimation measurements
tralian or International accounting stan-
dards when preparing their financial re- 303. Why might the growth rates of revenues
ports. and net income differ?Net Income growth
D. Entities may prepare financial state- rate can differ from revenue growth rate
ments on a cash flow basis provided that because the cost of goods sold and other
they meet the characteristics of compa- expenses can move at different rates than
rability, understandability, timeliness and revenues.
verifiability. A. TRUE
299. As per Ind AS 12 Defered Tax is created B. FALSE

on: 304. Which of the following accounts’ balance
A. Temporary Differences would be a different number on the Bal-
B. Timing Differences ance Sheet than it is on the adjusted trial
balance?
C. Permanent Differences
A. Dividing
B. Unearned service revenue
300. Which statement tells you about the fi- C. Accumulated depreciation
nancial position of the company?
D. Retained earnings
A. Income statement
B. Balance sheet 305. Oliver, Mia, and Ava are studying for
their finance exam. They are discussing a
C. Cash Flow Statement financial statement that provides a snap-
D. Notes to financial statement shot of a company’s financial position at
a specific point in time. Can you tell them
301. An independent audit report is most which statement it is?
likely to provide:
A. Balance Sheet
A. absolute assurance about the accu-
racy of the financial statements. B. Statement of Financial Position
B. reasonable assurance that the finan- C. Cash Flow Statement

cial statements are fairly presented. D. Statement of Income

306. What is the Return on Investments for 310. Benefits of harmonization:

9M 2022 on Total 9M 2022?ROI=(Net A. Accelerate global capital market inte-

gration and facilitate cross-border stock
vestment)*100%*Time effectAnnualiza- markets and facilitate international merg-
tion1st Q (12/3 =4) 2nd Q (12/6=2) 3rd ers and acquisitions.
Q (12/9=1, 3333) 4th Q (12/12=1)
B. Reduce investor uncertainty and cap-
A. 1, 7% ital costs and Reduce financial reporting
B. 1, 3% costs.
C. 3% C. It is easier and more cost effective in
the adoption of high quality standards by
D. 1, 6%
developing countries and It is easier to
307. Which of the following accounts is not a transfer accounting staff internationally
current asset? D. A, B, C All are true
A. Land 311. PT Galaxy, when recording merchandise
B. Accounts Receivable inventory used the LIFO method, then the
C. Supplies following year it changed to FIFO and the
following year used LIFO again. PT Galaxy
D. Prepaid Insurance violates the principle
308. For financial assets classified as available A. Consistency
for sale, how are unrealized gains and- B. Full Disclosure
losses reflected in shareholders’ equity?
C. Meet
A. They are not recognized.
D. Income Recognition
B. They flow through retained earnings.
312. Refer to Figure 4.03-B. Based on this in-
C. They are a component of accumulated
formation, what is the equity ratio for the
other comprehensive income.
company?
D. none of above
309. It represents advanced payments from

customers which requires settlement
through delivery of goods or services in
the future.
A. 42%
B. 58%
C. 70%
D. 88%
313. 10 year bonds issued and maturing in the
next 8 months will be presented at
A. Sales Revenue A. Long term liabilities
B. Service Revenue B. Short-term liabilities
C. Unearned Revenue C. Current assets
D. Accrued Revenue D. Non-current assets

314. Red Road Company, a consulting com- 319. Which of the following basic accounting
pany, reported total revenues of $100 mil- assumptions is threatened by the exis-
lion, total expenses of $80 million, and tence of severe inflation in the economy?
net income of $20 million in the mostre- A. Monetary unit assumption
cent year. If accounts receivable increased
by $10 million, how much cash didthe com- B. Periodicity assumption
pany receive from customers? C. Going-concern assumption
A. $90 million. D. Economic entity assumption
NARAYAN CHANGDER
B. $100 million. 320. PURPOSE OF FINANCIAL STATEMENTS
C. $110 million. A. Provides information about financial
D. none of above position, performance and changes in po-
sition. Prepared for the purpose of meet-
315. Which statement tells you about the fi-
ing the common needs of most of its users,
nancial performance of the company?
although it does not provide all the infor-
A. Income statement mation that these users need.
B. Balance sheet B. Presents financial information and is
C. Cash Flow Statement not required to present non-financial in-
D. Notes to financial statement formation.
C. Finance of a company for making eco-
316. Why is financial reporting important for nomic decisions.
businesses?
D. Shows what management has done
A. To showcase their marketing strate- (stewardship) and responsibility for man-
gies aging the resources that have been en-
B. to comply with legal requirements trusted to him.
C. To entertain stakeholders E. All statements are incorrect
D. To promote social media presence 321. Merchandise Inventory is listed on the In-
317. The accounting equation is Assets = Lia- come Statement as:
bilities + Owners Equity A. a current liability.
A. True B. a current asset.
B. False C. a component in the calculation of the
318. Pay attention to the following owner’s equity.
data:Initial inventory 2, 000 kg @ Rp. D. a component in the calculation of Cost
10, 000 Purchase I 4, 000 kg @ Rp. 12, of Goods Sold.
000 Purchase II 3, 000 kg @ Rp. 15, 000
322. Which of the following best describes cor-
PD Merpati Jaya made sales of 5, 000 kg.
porate governance?
If the ending inventory value calculated
using the LIFO method is A. Corporate governance is the system of
rules and regulations surrounding finan-
A. Rp 44.000.000
cial reporting.
B. Rp 44.400.000
B. Corporate governance is the system by
C. Rp 54.700.000 which companies and other entities are di-
D. Rp 64.000.000 rected andcontrolled.

C. Corporate governance is carried out 327. What is Mydeco’s market capitalization

by the finance department in preparing at the end of 2019?
the financialstatements

A. $550 million
D. Corporate governance is the system by B. $599 million
which an entity monitors its impact on the
C. $601 million
naturalenvironment.
D. $650 million
323. Mydeco’s book debt-equity ratio change Explanation:Market capitalization is calcu-
from (a) in 2015 to (b) in 2019, while the lated by multiplying the total number of
market debt-equity ratio changed from (c) shares outstanding by the stock price per
in 2015 to (d) in 2019. share. For Mydeco Corp., the market cap-
A. a 1.98 italization at the end of 2019 is 55 mln *
$10.89 = $598.95 million.
B. b 2.19
328. Which factors may indicate that recogni-
C. c 1.15
tion of an item meeting the definition of an
D. d 1.00 asset or a liability may not provide useful
Explanation:The book debt-equity ratio information?
is calculated as Long term Debt ÷
A. Uncertainty about whether an asset or
Stockholder′ s Equity Long term Debt ÷
liability exists
Market Capitalisation
B. Low probability of an inflow or outflow
324. FR 01 control category is detective. of economic benefits
A. True C. Other factors
B. False D. All of the above
E. None of the above.
325. James, George, and Noah started a com-
pany together. They are trying to under- 329. Which of the following remained un-
stand their company’s sources of financing changed in the 2018 Conceptual Frame-
and how the money is being used. Which work?
financial statement should they refer to? A. The reporting entity
A. Balance Sheet B. Derecognition
B. Statement of Financial Position C. Presentation and disclosure
C. Cash Flow Statement D. Concepts of capital and capital mainte-
D. Statement of Income nance
330. Which of the following are advantages of
326. Which one of the following asets may be
trading as a limited liability company?1.
classified as a non-current asset in the fi-
Operating as a limited liability company
nancial statements of a business?
makes raising finance easier because ad-
A. A tax refund due next year ditional sharescan be issued to raise addi-
B. A motor vehicle held for resale tional cash.2. Operating as a limited liabil-
ity company is more risky than operating
C. A computer used in the office as a sole trader because theshareholders
D. Cleaning products used to clean the of- of a business are liable for all the debts
fice floors of the business whereas the sole trader

isonly liable for the debts up to the amount 334. State the ratio used to measure the aver-
he has invested. age time it takes a company to collect each
A. 1 only APLOG customer receivable.
B. 2 only A. Cash Ratio

B. Debt Ratio
C. Both 1 and 2
C. Collection Period Ratio
D. Neither 1 or 2
D. Current Ratio
NARAYAN CHANGDER
331. Which of the following is the meaning of
EQUITY? 335. In preparing a company’s statement of
cash flows complying with IAS 7 State-
A. Resources owned as a result of past
ments of Cash Flows, which ONE of the
events and provide economic benefits to
following items could form part of the cal-
the Company in the future.
culation of cash flow from financing activ-
B. Entity capital used in carrying out com- ities?
pany operations or activities.
A. Dividend paid
C. Present obligations of the Company
B. Issue of bonus shares
arising from past events whose settle-
ment is expected to result in an outflow. C. Proceeds of sale premise
D. Company financial reports that reflect D. Payment of salaries
company profits and losses
336. Which is correct?
332. The Peterson’s Piano Company would A. IAS36 Impairment of assets
like to determine Cost of Goods Sold for
the past quarter. Per the general ledger, B. IAS35 Impairment of assets
sales are equal to $2, 312, 350, begin- C. IFRS36 Impairment of assets
ning inventory is equal to $952, 000, net D. IFRS35 Impairment of assets
purchases are equal to $875, 200, and
estimated ending inventory has been cal- 337. Non-financial measurements include all
culated to be $783, 650. Based on this of the following except
information, what is the Peterson’s Piano
A. backlog information
Company’s Cost of Goods Sold?
B. customer satisfaction indexes.
A. $706, 850
C. reject rates on goods purchased
B. $860, 450
D. All of the choices are non-financial
C. $863, 650
measurements
D. $1, 043, 550
338. Mrs Tri Astuti and Mr Fahmi agreed to es-
333. Which of the accounts below is a real ac- tablish a company. One form of company
count? that they can establish is:
A. Rent is paid in advance A. Partnership
B. Services revenue B. Cooperation
C. Rent Expense C. Corporation
D. Payroll Expense D. Soleproprietorship

339. A balance sheet reports a business’s fi- 344. Asfa Bhd issued its annual financial re-
nancial ports within one month of the end of the
year; this is an example of which ingredi-

A. Condition over a specific period of time
ent of primary quality of accounting infor-
B. Progress over a specific period of time mation?
C. Condition on a specific date A. Neutrality
D. Progress on a specific date B. Timeliness
C. Predictive value
340. Free from bias (neutral) and representa-
tive (presenting compliance) D. Representational faithfulness
A. Understandability 345. Which of the following is not a major chal-
B. Comparability lenge facing the accounting profession?
C. Relevance A. Nonfinancial measurements.
D. Reliability B. Timeliness.
C. Accounting for hard assets.
341. A company sold merchandise of $8, 000
D. Forward-looking information.
to a customer in December. The company’s
sales terms require the customer to pay 346. The forms of information produced by ac-
the company in 30 days. The company’s counting are:
income statement reported the sale in De-
cember. This is proper under which ac- A. Report on business activities
counting principle/guideline? B. Business world planning
A. Full Disclosure C. Financial statements
B. Revenue Recognition D. Rules of the business world
C. Monetary Unit E. Assessment of the world of business
D. none of above 347. Eesha, Elsie, and George are studying for
their finance exam. They are discussing
342. Interest expense should be presented about a financial statement that provides
as information about a company’s cash in-
A. Operational expenses flows and outflows. Can you tell them
which statement it is?
B. administrative and general expenses
A. Balance Sheet
C. financial burden
D. other burdens
343. Which of the following is not a required fi- D. Statement of Income
nancial statement according to IAS No. 1?
348. Which of the following is not considered
A. Statement of financial position.
as an Outgo/Outflow in Income statement
B. Statement of changes in income. (Profit and Loss)?
C. Statement of comprehensive income. A. Expenses
D. none of above B. Change in Reserve

C. Dividend C. $1, 268, 800

D. None of the above D. $1, 271, 900
349. A conceptual framework for financial re- 352. The characteristic of Malaysian Institute
porting is: of Certified Public Accountant (MICPA) is
as follow, except:i) Establish in 1958 as
A. A set of items which make up an en-
company limited guarantee ii) Establish
tity’s financial statements
in 1967 under accountants Act 1967 as
B. A set of financial reporting standards
NARAYAN CHANGDER
private sector accountancy bodies iii) Its
C. A set of regulations which govern fi- is regulations cover the practices of the
nancial reporting whole accounting profession in Malaysia
iv) Regulates the practice of its members
D. A set of principles which underpin fi- who carry the title of certified public ac-
nancial reporting countant (CPA)
350. Accounting harmonization is a process A. i and ii
that reduces alternatives while retaining B. i and iv
a high degree of flexibility in accounting
C. ii, iii and iv
practices.
D. all above
A. Harmonization is different from stan-
dardization (or uniformity) which implies 353. Which is correct?
the elimination of alternatives in account-
A. IAS16 Property, Plant and equipment
ing practices.
B. IFRS16 Property, Plant and equipment
B. The objective of accounting harmoniza-
tion is to have comparable financial state- C. IAS15 Property, Plant and equipment
ments from companies in different coun- D. IFRS15 Property, Plant and equipment
tries.
354. The conceptual framework is a financial
C. Harmonization of regulations (de jure
reporting standard
harmonization) does not necessarily pro-
duce harmonization of practices (de facto A. True
Harmonization). B. False
D. none of above
355. An accountant should record revenue as
351. Peterson’s Piano Company would like to it is earned even if cash has not been re-
determine the gross profit for the past ceived at the end of the accounting period.
quarter. Per the general ledger, sales are This statement complies with the
equal to $2, 312, 350, beginning inven- A. Consistency concept
tory is equal to $952, 000, net purchases B. Prudence concept
are equal to $875, 200, and estimated
ending inventory has been calculated to C. Accrual-based concept
be $783, 650. Based on this information, D. Entity concept
what is Peterson’s Piano Company’s gross
profit? 356. Emily, Benjamin, and Thomas are part of
a school project where they have to ana-
A. $860, 450 lyze a company’s financial health. They
B. $1, 043, 550 come across a document that shows the

company’s revenues and expenses during of $410, 700. Based on this information,
a particular period of time. What is this what is the departmental margin for the
financial statement called? Women’s Department?

A. Balance Sheet A. $35, 500 net income
B. Statement of Financial Position B. $47, 818 net income
C. Cash Flow Statement C. $35, 500 net loss
D. Statement of Income D. $47, 818 net loss
357. On January 1 2019, PD Jalali sold mer- 360. A core objective of the International Or-
chandise to Toko Kenari for IDR 6, 000 ganization of Securities Commissions is to:
with payment terms n/30. Based on this
data, the recording carried out by PD Jalali A. eliminate systemic risk.
is B. protect users of financial statements.
A. Trade receivables Rp. 6, 600-Sales-Rp. C. ensure that markets are fair, efficient,
6, 000 Input VAT-Rp. 600 and transparent.
B. Accounts receivable Rp. 6, 600-Sales- D. none of above
Rp. 6, 000
C. Sales Returns IDR 6, 600-Accounts 361. Priya, Muhammad, and William are part
Receivable-IDR 6, 000 of a school project where they have to an-
alyze a company’s financial health. They
D. Cash Rp. 6, 600-Sales Deductions-Rp. come across a document that shows the
6, 000 Accounts receivable-Rp. 600 total amount of cash that has been gen-
erated and used by the company during a
358. A conversion of a face value $1 million
particular period of time. What is this fi-
convertible bond for $1 million of common
nancial statement called?
stock would most likely be:
A. Balance Sheet
A. reported as a $1 million investing cash
inflow and outflow. B. Statement of Financial Position
B. reported as a $1 million financing cash C. Cash Flow Statement
outflow and inflow. D. Statement of Income
C. reported as supplementary informa-
tion to the cash flow statement. 362. Decision usefulness is the underlying
theme of the conceptual framework
D. none of above
A. Correct
359. Jones Department Store has two di-
B. Salah
visions:the Men’s Department and the
Women’s Department. The accountant 363. IFRS stands for:
is preparing interim reports for the com-
pany and is currently working on com- A. Internal Financial reporting standards
pleting the worksheet. The Men’s De- B. Interim Finance & reporting standards
partment columns show a debit total of
$435, 809 and a credit total of $387, 991. C. International Financial Reporting Stan-
The Women’s Department columns show a dards
debit total of $375, 200 and a credit total D. none of above

364. Cell Services Inc. (CSI) had 1, 000, 000 B. Statement of Financial Position
average shares outstanding during allof
2009. During 2009, CSI also had 10, 000
options outstanding with exerciseprices of D. Statement of Income
$10 each. The average stock price of CSI
during 2009 was $15. For purposes of 368. On a monthly basis, prior to C+5 Bravo
computing diluted earnings per share, how Submission, the GL Tie Out Reconciliation
many shares would be used in the denom- between the GL and Bravo submission is
inator? performed, reviewed and approved via
NARAYAN CHANGDER
A. 1, 003, 333. signature (either written or electronic) and
dated by management.
B. 1, 006, 667.
A. True
C. 1, 010, 000.
B. False
D. none of above
365. Which of the following most likely signals 369. Which of the following is not an objective
that a manufacturing companyexpects de- of The Conceptual Framework?
mand for its product to increase? A. Addresses the common needs of users
A. Finished goods inventory growth rate of financial reports.
higher than the sales growth rate B. Enables consistency of qualitative
B. Higher unit volumes of work in characteristics in financial reports.
progress and raw material inventories
C. Enables implementation of one univer-
C. Substantially higher finished goods, sal set of accounting standards.
with lower raw materials and work-in-
process D. Provides guidance for transactions not
addressed in existing accounting stan-
D. none of above dards
366. The personal assets of the owner of
a company will not appear on the com- 370. What is an entity-specific aspect of rele-
pany’s balance sheet because of which vance?
principle/guideline? A. Predictive value
A. Monetary unit B. Confirmatory value
B. Economic entity C. Timeliness
C. Cost
D. Materiality
D. none of above
371. To meet the financial information needs
367. Leo, Oliver, and Oscar are studying for of users, the elements of financial reports
their business exam. They are discussing are
the financial statements of a company.
They are trying to identify the financial A. Income statement
statement that contains the information B. Notes to financial reports
about the company’s expenses and rev-
enues. Can you help them? C. Income
A. Balance Sheet D. Income

372. What is the Return on Investments B. Interest earned

for 9M 2022 on L&H Re?ROI=(Net
C. Accounts Receivable

vestment)*100%*Time effectAnnualiza- D. Service Fees
tion1st Q (12/3 =4) 2nd Q (12/6=2) 3rd
Q (12/9=1, 3333) 4th Q (12/12=1) 377. The accountant of Scrub and Shine Ltd
A. 1, 4% identified an aggregate charge of $500
000 (comprising 126 various supplier in-
B. 1, 3%
voices) of advertising expense for a new
C. 3% microfibre cloth within the entity’s finan-
D. 1, 9% cial records. Should the accountant present
this item separately in the financial state-
373. The following are the functions of ac- ments?
counting in the business world, except
A. Yes, the aggregate value of this adver-
A. communicate financial information to tising expenditure is material.
various parties
B. Yes, details of all transactions should
B. as one of the requirements for fulfill-
be disclosed to assist users make fully in-
ing legal standards for business activities
formed decisions
C. maintain records systematically
C. Possibly. This would depend on the
D. guarantee that financial reports are size and nature of the advertising expen-
prepared honestly and without manipula- diture relative to other items disclosed in
tion the financial report.
374. Which of the following is not APL’s oper- D. No, the individual values of the in-
ating income voices comprising this amount are imma-
A. Terminal Kargo terial. The disclosure requirements do not
apply to immaterial items.
B. Regulated Agent
C. Consultant 378. Three of the following are related to
D. Logistics faithful representation. Which one is not
a characteristic of faithful representation?
375. Appointment of woman Directors is
mandatory for following companies: A. Materiality
A. Listed Companies B. Completeness

B. Public Companies with PUC ≥ 10 Cr. C. Neutrality
or Turnover ≥ 300 Cr.
D. Freedom from error
C. Public Companies with PUC ≥ 100 Cr.
or Turnover ≥ 300 Cr. 379. The same accounting policies should be
D. (a) or (c) consistently used to prevent misleading
profit that may arise from different ac-
376. Which of the following is not a compo- counting policies.
nent of the Income Statement (Profit and
Loss)? A. True
A. Dividend payout B. False

380. Which of the following statements is/are 384. In which year does the phase of insti-
true?1. Directors of companies have a tution contribution of the creation and in-
duty of care to show reasonable compe- creasing role of institution in the develop-
tence in their managementof the affairs ment of accounting principles was?
of a company.2. Directors of companies
A. 1900-1933
must act honestly in what they consider
to be the best interest of thecompany.3. B. 1933-1959
A Director’s main aim should be to create
wealth for the shareholders of the com- C. 1959-1973
NARAYAN CHANGDER
pany. D. 1973
A. 1 and 2 only
B. 2 only 385. Amelia, Thomas, and Matilda are study-
ing for their accounting exam. They come
C. 1, 2 and 3 across a question asking, ‘Which financial
D. 1 and 3 only statement reports the financial position of
a company at a specific date?’
381. Which term refers to the amount by
which the carrying amount of an asset ex- A. Statement of Financial Position
ceeds its recoverable amount? B. Balance Sheet
A. Residual value
C. Statement of Income
B. Depreciable amount
D. Cash Flow Statement
C. Impairment loss
D. Recoverable amount 386. Refer to Figure 4.03-H. Based on this in-
formation, what is the ratio of property,
382. Casual Vacancy of a woman director shall
plant, and equipment to long-term liabili-
be filled by
ties for the company?
A. GM-OR
B. EGM
C. GM-SR
D. BM-OR
383. If a reliable measure of fair value is no

A. 1.79 to 1
longer available without undue cost or ef-
fort, an item of Investment Property will B. 1.83 to 1
be
C. 2.14 to 1
A. Transferred to PPE under PFRS for
Small Entities D. 2.68 to 1
B. Transferred to Inventories under PFRS
387. The principle of expense recognition
for SMEs
states that debits must equal credits in ev-
C. Converted from Cost Model to Fair ery transaction
Value Model under PFRS for SMEs
A. Correct
D. Converted from Fair Model to Cost
Model under PFRS for Small Entities B. Salah

388. Refer to Figure 4.03-G. Based on the 392. The accounting principle that requires
information provided, what is the return every good or service obtained to be
(rate earned) on net sales? recorded based on all costs incurred in ob-

taining it is
A. Full Disclosure Principle
B. Historical Cost Principle
C. The Principle of Meeting
A. 19.6%
D. Consistency Principle
B. 24.7%
C. 31.1% 393. Which of the following statements about
a departure from IFRS is correct?
D. 38.1%
A. Departure is never permitted
389. The bank statement on 31 October 20X7 B. Departure is permitted when the fi-
showed an overdraft of $800. On recon- nancial statement would be unfairly pre-
ciling the bank statements, it was discov- sented because of compliance with IFRS.
ered that a cheque drawn by your company
C. Departure is permitted when manage-
for $80 had not been presented for pay-
ment and the external auditor agree on
ment, and that a cheque for $130 from a
the departure.
customer had been dishonoured on 30 Oc-
tober 20X7, but that this had not yet been D. Departure is permitted when the dis-
notified to you by the bank. What is the closure of the adopted accounting policy
correct bank balance to be shown in the is detailed in the notes.
statement of financial position at 31 Octo-
ber 20X7? 394. The Daisy Company wants to determine
the gross profit for the past quarter. Per
A. $1, 010 overdrawn the general ledger, sales are equal to
B. $880 overdrawn $152, 000, beginning inventory is equal
to $67, 330, net purchases are equal to
C. $750 overdrawn $87, 800, and estimated ending inven-
D. $720 overdrawn tory has been calculated to be $83, 650.
Based on this information, what is the
390. The amount customers owe your business gross profit for the Daisy Company?
A. Assets A. $63, 180
B. Current Assets B. $71, 480
C. Accounts Receivable C. $80, 520
D. Fixed Assets D. $88, 820
391. Replaced the interpretations committee. 395. PAS 34 states a presumption that anyone
reading interim financial reports will
A. IFRIC
A. Understand all International Financial
B. PIC
Reporting Standards.
C. PFRS
B. Have access to the records of the en-
D. NOT tity.

C. Have access to the most recent annual the information provided, what is the com-
report. ponent percentage for the Cost of Mer-
chandise Sold for the Clothing Division?
D. Not make decisions based on the re-
Refer to Figure 1.03-A
port.
396. On which two financial statements would

the Retained Earnings account appear?
A. Balance Sheet
NARAYAN CHANGDER
B. Retained Earnings Statement
A. 40%
C. Income Statement
B. 46%
D. Statement of Cash Flows
C. 47%
397. Unrelaised gain/loss in case of which of D. 53%
the following is not transferred to Other
Comprehensive Income 401. A company that is about to be liquidated
A. Amortised cost does not record depreciation = expense
recognition
B. Fair Value through Other Comprehen-
sive Income (Debt) A. Correct
C. Fair Value through Other Comprehen- B. Salah

sive Income (Equity)
402. International accounting standards are
D. None of the above used as a result of:
398. You record your income when it is re- A. International or political agreements
ceived and your expenses when they are B. Voluntary compliance
paid
C. Voluntary compliance
A. Cash Basis
D. A, B, C Benar
B. Accrual Basis
403. In this report, expenses are classified
399. PAS 34 shall be applied by based on
A. entities which are required by the gov-
ernment or other entities to provide in-
terim financial reports
B. those who choose to provide interim fi-
nancial reports
C. a and b
D. all reporting entities who are adopting
A. Nature
the “full” PFRSs
B. function
400. The accountant for the Eckland Company
C. Type
is preparing a Statement of Gross Profit
with Component Percentages. Based on D. Type

404. What are the inputs that required to gen- 407. Sipadan Enterprise is allowed to change
erate commission inbox. its depreciation method in order to in-
crease its profit and still considered neu-

A. Reseller Company
tral.
B. Date From
A. True
C. Date To
B. False
D. Agent
408. Spare parts and servicing equipment are
405. Reports how much cash your business usually accounted for as:
took in and where the cash went
A. Inventory
A. General Journal
B. Separate class of fixed assets
B. General Ledger
C. Expensed off to profit or loss
C. Income Statement
D. Always capitalised
D. Balance Sheet
E. Statement of Cash Flows 409. The final basis change will cause a 50 M
USD decrease in reserve. How will the Ba-
406. Companies X and Z have the same sis Change affect Profit and Loss?
beginning-of-the-year book value of eq- A. Change in Reserve = +50 M USD
uity and the same tax rate. The compa-
nies have identical transactions through- B. Change in Reserve =-50 M USD
out the year and report all transactions C. Income Statement will not be affected
similarly except for one. Both companies
acquire a £300, 000 printer with a three- D. None of the above
year useful life and a salvage value of £0
on 1 January of the new year. Company
right to the CEO on January 1, 2022. Af-
X capitalizes the printer and depreciates it
ter a 3-year service, the employee is en-
on a straight-line basis, and Company Z
expenses the printer. The followingyear-
preciation in share price over the market
end information is gathered for Company
X.Based on the information given, Com-
pany Z’s return on equity using year-end
equity will be closest to:
mining the compensation. The share op-
tion right has the following terms:Service
2024Number of shares-100, 000Exercise
date-January 1, 2025The quoted prices of
150December 31, 2022-155December 31,
A. 5.4%. 2023-152December 31, 2024-160What
is the journal entry on December 31, 2022
B. 6.1%.
A. Debit-Salaries Expense 500,
C. 7.5%.
000Credit-Accrued Salaries Payable 500,
D. none of above 000

B. Debit Salaries-Expense 166, A. a woman only

667Credit-Accrued Salaries Payable 166,
B. male or female
667
C. Debit-Salaries Expense 200, C. any person
000Credit-Accrued Salaries Payable-200, D. all of above
000
D. None of the above 414. What is included in the category of incen-
tives to commit fraud in company financial
NARAYAN CHANGDER
411. Which of the following statements about reporting is
contingent assets and contingent liabilities
are correct? 1 A contingent asset should A. Personal Incentive
be disclosed by note if an inflow of eco- B. Market Expectations
nomics benefits is probable.2 A contingen
liability should be disclosed by note if it is C. Special Circumstances
probable that a transfer of economic ben- D. Cover-up Fraud
efits to settle it will be required, with no
E. Life Style
provision being made. 3 No disclosure is
required for a contingent liability if it isnot
probable that a transfer of economic ben-
efits to settle it will be required.4 No dis- A. IAS1 Presentation of Financial State-
closure is required for either a contingent ments
liability or a contingent asset if the likeli- B. IAS2 Presentation of Financial State-
hood of a payment or receipt is remote. ments
A. 1 and 4 only
C. IFRS1 Presentation of Financial State-
B. 2 and 3 only ments
C. 2, 3 and 4
D. IFRS2 Presentation of Financial State-
D. 1, 2 and 4 ments
412. The Eckland Company would like to de- E. IFRS3 Presentation of Financial State-
termine gross profit for the past quarter. ments
Per the general ledger, sales are equal to
$853, 500, beginning inventory is equal 416. PAS 34 Interim Financial Reporting re-
to $350, 000, net purchases are equal to quires listed entities to provide interim fi-
$146, 000, and estimated ending inven- nancial reports.
tory has been calculated to be $46, 500.
A. TRUE
Based on this information, what is the Eck-
land Company’s gross profit? B. FALSE
A. $250, 500
417. your year begins and ends any other
B. $404, 000 months besides January and December
C. $449, 500
A. Accounting Period
D. $696, 000
B. Calendar Year
413. If there is a single casual vacancy at a
C. Fiscal Year
place of woman director then casual va-
cancy shall be filled by D. none of above

418. All purpose journal that records any busi- 423. The business entity concept is only appli-
ness transaction cable to sole proprietors.

A. General Journal A. True
B. General Ledger B. False
C. Income Statement 424. Adjusting entries are necessary because
D. Balance Sheet accounts are allowed to become inaccurate
between financial statement dates.
E. Statement of Cash Flows
A. True
419. On being appointed as director, he shall B. False
file Form with Company.
A. DIR-12 425. Criticism & suggestions on International
Standards
B. DIR-2
A. Setting international standards is a
C. DIR-8 simple solution to a complex problem
D. DIR-1 B. Some observers argue that setting in-
ternational accounting standards is basi-
420. Which of the following sources of infor- cally a tactic of large accounting firms that
mation used by analysts is found outside provide international accounting services
a company’s annual report? to expand their markets.
A. Auditor’s report C. Adoption of the int standard. Will lead
B. Peer company analysis to excessive standards.
C. Management’s discussion and analy- D. A, B, C Benar
sis
426. Which type of adjustment occurs when
D. none of above cash is not collected or paid, but the re-
lated income or expense is reportable in
421. During 2020 PT AP recorded revenue of the current period?
Rp. 235 billion at a cost of Rp. 195 billion,
how much profit? A. Cull
A. Rp. 65 billion B. Deferral
B. Rp. 50 billion C. Estimate
C. Rp. 40 billion D. Accrual
D. Rp. 35 billion 427. Which of the following expenses is rec-

ognized immediately in the interim period
422. The financial statements most frequently and not allocated to the other interim peri-
provided include all of the following ex- ods?
cept the
A. Annual depreciation of equipment that
A. statement of financial position. benefits the entire annual period.
B. income statement. B. Real property tax
C. statement of cash flows. C. 13th month pay of employees
D. statement of retained earnings. D. Impairment of assets

428. The IASB revised the Conceptual Frame- 433. Adjusting entries are necessary to
work because the previous version is A. Update and correct the accounts at the
A. no longer relevant end of the period
B. no longer useful B. balance the books at the end of the pe-
riod
C. useful but needed improvements
C. record the sales of the period
D. useful but is required to be revised by
D. ensure the equality of the debits and
legislation
NARAYAN CHANGDER
credits
429. Which of the following uses the “Full 434. William’s trial balance at 30 Septem-
PFRSs”? ber 20X5includes the following bal-
A. Large or publicly-accountable entities ances:Trade receivable $75, 943Re-
ceivables allowances $4, 751 How
B. Medium size entity should these balances be reported in
C. Small entities william’sstatements of financial position
as at 30 September 20X5?
D. Micro entities
A. An asset of $71, 192
430. Statements or documents that summa- B. An asset of $75, 943 an a liability of $4,
rize the results of your business operation 751
and provide a picture of its financial posi- C. A liability of $71, 192
tion.
D. A liability of $75, 943 and an asset of
A. GAAP $4, 751
B. Financial Statements 435. Samuel is studying for his accounting
exam. He comes across a term that de-
431. Which of the following is the foundation
scribes the financial statement that re-
of the Conceptual Framework?
ports the financial position of a company
A. The objective of general purpose finan- at a specific date. Can you help him iden-
cial reporting tify the term?
B. A reporting entity concept A. Statement of Financial Position
C. The qualitative characteristics of, and B. Balance Sheet
the constraint on, useful financial informa- C. Statement of Income
tion D. Cash Flow Statement
D. The elements of financial statements
436. The accounting concept which states that
432. Financial Accounting Framework means income is recognized when earned regard-
a set of accounting principles, standards, less of when collected and expense is rec-
interpretations, and pronouncements that ognized when incurred regardless of when
must be adopted in the preparation and paid.
submission of the annual financial state- A. Matching Principle
ments of a particular class of entities. B. Time Period
A. TRUE C. Accrual
B. FALSE D. Deferral

437. When producing information for external which had to be razed because it was not
parties, you must be guided by financial suitable for the company’s intended use.
accounting standards. The relevant areas After deducting the proceeds from the sale

of accounting science in this case are: of the remains of the old building, ABC
A. Cost accounting Company still had to spend Rp. 60, 000,
000, -. The notary fee is IDR. 10, 000,
B. Financial Accounting 000, -, and brokerage commission of Rp.
C. Tax accounting 8, 000, 000, -which is also borne by the
D. Management accounting company. How to record the land pur-
chase.
438. In the current Covid pandemic conditions, A. Tanah 500.000 (K) Kas 500.000
financial reports must reflect a healthy fi-
nancial condition. Which of the following B. Kas 500.000 (K) Tanah 500.000
do you think can be said to be a healthy C. Tanah 578.000 (K) Kas 578.000
financial reporting condition?
D. Kas 578.000 (K) Tanah 578.000
A. Pend Rp. 10 billion, Profit Rp. 2 Billion,
Receivables Rp. 6 Billion and Cash Flow 442. Accountants who work as independent
Rp. 4 billion auditors are:
B. Pend Rp. 10 billion, Loss Rp.-2 Billion, A. Management accountant
Receivables Rp. 4 Billion and Cash Flow
B. Government accountant
Rp. 6 billion
C. Public accountant
C. Pend Rp. 10 billion, Profit Rp. 100 Mil-
lion, Receivables Rp. 2 Billion and Cash D. BPK Accountant
Flow Rp. 8 billion E. Educator Accountant
D. Pend Rp. 10 billion, Loss Rp.-100 mil-
lion, Receivables Rp. 8 Billion and Cash 443. Has full discretion in developing and pur-
Flow Rp. 2 billion suing the technical agenda for setting ac-
counting standards in the Philippines.
439. Under PFRS for Small Entities, Biological
A. IASB
Assets are recognized using which model:
B. IAS
A. Cost or Fair Value Model
C. IFRS
B. Fair Value or Current Market Price
Model D. FRSC
C. Cost or Current Market Price Model
444. Buyers will get a 2% discount if payment
D. Cost or Market Value Model is made within 10 days after the transac-
tion and payment is made within 30 days.
440. The Chart of Accounts is the list of ac- The correct term to express this is
counts a business uses in its operation
A. 2/10
A. True
B. 2/10, n/30
B. False
C. 2%/10, n/30
441. Assume that Company ABC purchased
real estate for cash of Rp. 500, 000, 000, D. n/30
-. On the land stood an old warehouse E. 2/10, EOM

445. Refer to Figure 4.03-H. Based on this in- D. none of above

formation, what is the equity per share for
the company? 448. What is Mydeco’s market-to-book ratio
at the end of 2019?
A. 1.92
B. 2.19
C. 0.46
A. $17.50 per share
NARAYAN CHANGDER
D. 1.12
B. $21.00 per share Explanation:The market-to-book ratio is
calculated by dividing the market capital-
C. $28.00 per share
ization by the book value of stockholders’
D. $37.50 per share equity. For Mydeco Corp., the ratio at the
end of 2019 is 598.95 / 273.7=2.19
446. An analyst gathered the following in-
formation from a company’s 2018 finan- 449. In case of Loans, interest income
cial statements (in $ millions).Based only is booked on Net Carrying amount, i.e.,
on the information above, the company’s Gross Carrying amount less Loss al-
2018 statement of cash flows in the di- lowance:
rect format would include amounts (in $
A. Stage I
millions) for cash received from customers
and cash paid to suppliers, respectively, B. Stage II
that are closest to: C. Stage III
D. none of above
450. SCOPE(Basic Framework discusses)

A. 1. Objectives of financial reports
B. 2. Qualitative characteristics that de-
A. cash received from customers =
termine the usefulness of information in
$249.70; cash paid to suppliers =
financial reports
$169.70
C. 3. Definition, recognition and mea-
B. cash received from customers =
surement of the elements that make up fi-
nancial reports.
$174.50
D. 4. The concept of capital and capital
C. cash received from customers =
preservation.
$182.10 E. All statements are True
D. none of above 451. In which part of the structure’s ISA is the
447. Neutrality of information in the finan- explanation of the purpose and scope of
cial statements most closely contributes to the ISA?
which qualitative characteristic? A. Objectives
A. Relevance. B. Definition
B. Understandability. C. Introduction
C. Faithful representation. D. Requirements

E. Application and other explanatory ma- A. Reporting

terial B. Summarizing

452. Journal entry of Cash purchase would be C. Classifying
A. debit purchase, credit sales D. Recording
B. debit purchase, credit cash E. Accounting
C. debit cash, credit purchase 456. The Audit Oversight Board (AOB) is es-
D. debit purchase, credit bank tablished under Part 111A of the Securi-
ties Commission Act 1993.
453. That a business may only report activi-
A. TRUE
ties on financial statements that are specif-
ically related to company operations, not B. FALSE
those activities that affect the owner per-
sonally, is known as which of the follow- 457. Which ONE of the following statements
ing? describes faithful representation, a quali-
tative characteristic of faithful representa-
A. monetary measurement concept tion?
B. separate entity concept A. Revenue earned must be matched
C. time period assumption against the expenditure incurred in earn-
ing it.
D. going concern assumption
B. Having information available to
454. Which of the following best describes the decision-makers in time to be capable of
purpose of disclosure notes in the financial influencing theirdecisions.
statements?
C. The presentation and classification of
A. To provide more detail for the users items in the financial statements should
of financial statements about the informa- stay the same fromone period to the next.
tion in the balance sheet and statement of
D. Financial information should be com-
profit or loss
plete, neutral and free from error
B. To allow companies to present their fi-
nancial results in a more favourable way 458. Which of the following is not a basic ac-
by only disclosingsome things in the notes counting concept is
and not on the main financial statements. A. Konsep Entitas Bisnis (Business Entity)
C. To give all the detail of all the transac- B. Business Unity Concept
tions that occurred during the period be-
C. Concept of Continuity (Going Concern)
cause the mainfinancial statements only
present a summary. D. Full Disclosure Concept
D. To explain the accounting treatment 459. What are the Financial Statement Asser-
adopted where management have chosen tions covered by FR-21?
not to apply accounting standards.
A. Accuracy and Validity
455. An activity that aims to summarize the B. Completeness and Accuracy
company’s financial transactions which
have been classified in general ledger es- C. Accuracy and Restricted Access
timates into the Trial Balance is called D. Completeness and Validity

460. Which of the following are TRUE of part- C. Deduct both after-taxinterest pay-
nerships?1. The partners’ individual ex- ments and capital expenditures fromop-
posure to debt is limited.2.Financial state- erating cash flows.
ments for the partnership by law must be
D. none of above
produced and made public.3.A partnership
is not a separate legal entity from the part- 464. Which is one of the elements of a fi-
ners themselves. nancial report that describes a company’s
A. 1 and 2 only profit/loss position, namely?
NARAYAN CHANGDER
B. 2 only A. Cash flow statement
C. 3 only B. Profit or loss report
D. 1 and 3 only C. Financial position report
461. Equipment reported on January 1, 2020 D. All are correct
Rp. 2, 500, 000. Equipment purchases
during 2014 Rp. 4, 600, 000. Equipment 465. PURPOSE OF THE CONCEPTUAL FRAME-
remaining on December 31, 2020 Rp. 1, WORK (used as a reference):
000, 000. The correct adjustment entry A. Financial report preparation commit-
for equipment is tee in carrying out its duties
A. Supplies Expense (D) Rp. 6.100.000Sup-
B. The auditor provides an opinion re-
plies (K) Rp. 6.100.000
garding whether the financial statements
B. Supplies Expense (D) Rp. 1.500.000Sup- are in accordance with generally accepted
plies (K) Rp. 1.500.000 accounting principles
C. Supplies (AND) Rp. 1.000.000 Supplies C. Users of financial reports in interpret-
Expense (KRp. 1.000.000 ing the information presented in financial
D. Supplies (D) Rp. 6.100.000Supplies Ex- reports
pense (K) Rp. 6.100.000 D. All Statements are correct
462. Which module could not generate a report 466. The income statement is best used to
A. Policy evaluate a company’s:
B. Workinbox A. financial position.
C. Leads B. sources of cash flow.
D. Inbound Email C. financial results from business activi-
ties.
463. Which of the following is an appropriate
method of computing free cash flow to the D. none of above
firm?
467. In which of the following transaction,
A. Add operating cash flows to capital ex-
sale of loan portfolio is not treated as true
penditures and deduct after-tax interest
sale and are not derecognised from books
payments.
of accounts:
B. Add operating cash flows to after-tax
A. Direct Assignment Transaction
interest payments and deduct capital ex-
penditures. B. Pass through certificate Transaction

468. Which is correct? C. Unearned Rent (D); Rent Revenue (K)

A. IAS37 Provisions, Contingent Liabili- Rp. 6.000.000

ties and Contingent assets D. Rent Revenue (D); Unearned Rent (K)
Rp. 6.000.000
B. IAS36 Provisions, Contingent Liabili-
ties and Contingent assets 471. Parker Industries has a debt ratio of
C. IFRS37 Provisions, Contingent Liabili- 48.2%. The industry average for com-
ties and Contingent assets panies similar to Parker is 43.5%. This
means that Parker likely:
D. IFRS36 Provisions, Contingent Liabili-
ties and Contingent assets A. will avoid any difficulty with its credi-
tors.
469. The financial statements of DN Proper-
B. will be viewed as having high credit-
ties have reflected a rate earned on aver-
worthiness.
age total assets for the past three years
of 11.2%, 12.1%, and 13.4%. Industry C. has less liquidity than other firms in
statistics show that businesses similar to the industry.
DN Properties typically have a rate earned D. has greater than average financial risk
on average total assets between 11.0% when compared to other firms in its indus-
and 15.0%. Based on the given informa- try.
tion, which statement is correct?
A. DN Properties struggles to put its as-
right to the CEO on January 1, 2022. Af-
sets to profitable use.
B. DN Properties needs to sell assets to titled to receive a cash equal to the ap-
reduce the rate to below 11.0%. preciation in share price over the market
C. DN Properties is using its assets in value on January 1, 2022. The market
a way that is increasing net income but value on January 1, 2020 is the prede-
is still failing to meet acceptable industry termined price for the purpose of deter-
standards. mining the compensation. The share op-
tion right has the following terms:Service
D. DN Properties is improving its use of period-January 1, 2022-December 31,
assets for increasing profitability and is 2024Number of shares-100, 000Exercise
operating near the same level as similar date-January 1, 2025The quoted prices of
companies in the industry. the entity’s share are:January 1, 2022-
470. It is known that the Unearned Rent value
2023-152December 31, 2024-160What
is Rp. 6, 000, 000 in the trial balance on
is the debit entry on December 31, 2023?
December 31 2020. It is known that the
rental income that has been received for A. Salaries Expense 200, 000
1 year’s rent starting from November 1 B. Salaries Expense 33, 333
2020. The adjusting entry at the end of
December 2020 is C. Salaries Expense 166, 667
A. Unearned Rent (D); Rent Revenue (K) D. Salaries Expense 500, 000
Rp. 1.000.000 473. Which of the following is the principle
B. Rent Revenue (D); Unearned Rent (K) that a company must recognize revenue in
Rp. 1.000.000 the period in which it is earned, it is not

considered earned until a product or ser- B. Composed of members of the audit

vice has been provided? team.
A. Cost principle C. Composed of members of a company’s
B. Revenue recognition principle board of directors who are not involved in
the day-to-day operations of the company.
C. Expense recognition (matching) princi-
ple D. A committee composed of persons not
D. Full disclosure principle associating in anyway with the client or
NARAYAN CHANGDER
the boardof directors.
474. US generally accepted accounting princi-
ples are currently developed by which en- 478. This financial position report is presented
tity? in the format
A. The Securities and Exchange Commis-
sion.
B. The Financial Accounting Standards
Board.
C. The Public Company Accounting Over-
sight Board.
A. one step
D. none of above
B. two steps
475. What is the primary purpose of financial
reporting? C. account form
A. To provide insights into a company’s fi- D. report form
nancial performance and position
B. To create competition among busi- 479. Which of the following is not a contrib-
nesses utory factor towards faithful representa-
tion?
C. To assess employee satisfaction
A. Consistency
D. To attract new customers
B. Neutrality
476. Shareholders’ equity reported on the bal-
ance sheet is most likely to differ fromthe C. Completeness
market value of shareholders’ equity be- D. Freedom from error
cause:
A. historical cost basis is used for all as- 480. George and Lily are studying for their
sets and liabilities. business exam. Their tutor, Samuel, asks
B. some factors that affect the genera- them, ‘Which financial statement would
tion of future cash flows are excluded. you look at to find information about a
company’s cash inflows and outflows?’
C. shareholders’ equity reported on the
balance sheet is updated continuously. A. Balance Sheet
D. none of above B. Statement of Financial Position
477. An audit committee is C. Cash Flow Statement

A. Composed of internal auditors. D. Statement of Income

481. In case of prepayment of loan asset, the arrangement, being when the entity and
unamortised transaction cost is: the counterparty have shared understand-
ing of the terms and conditions of the ar-

A. recorded as gain/loss on prepayment
rangement.
B. amortised over the original remaining
C. A date at which the entity and the coun-
period of loan asset
terparty agree to a share-based payment
C. None of the above arrangement, being when the entity and
D. none of above the counterparty have shared understand-
ing of the policies, terms, conditions and
482. USERS OF FINANCIAL STATEMENTS (lim- pre-existing contract of agreement includ-
ited): ing the liason.
A. Investor and employees D. None of the above.
B. Lender and Public 485. Of the accounts contained in the adjusted
C. Creditor and Government and their trial balance column in the work sheet as
agencies below, which will be included in the liabili-
D. Customer ties side of the Statement of Financial Po-
sition column?
E. All wrong
A. Income received in advance
483. Which of the following is not a role of The B. Prepaid insurance
Conceptual Framework (The Framework)?
C. Non-current assets held for sale
A. It is the foundation that standard- D. Investment property
setters use when developing accounting
standards. 486. The following are Subsidiaries in SH Com-
B. It enables the external auditors to mercial & Trading, except
evaluate compliance with IFRS and then A. Pertamina International Timor SA
form an opinion. B. Pertamina International Marketing &
C. It enables consistency when the exist- Distribution
ing accounting standards do not provide C. PT. Archipelago Regas
guidance on a particular issue.
D. PT Pertamina Lubricant
D. It is an alternative to the detailed ac-
counting standards as it is much easier 487. How does the Conceptual Framework ex-
to understand by users of financial state- plain the role of stewardship?
ments. A. Providing information needed to as-
sess management’s stewardship is identi-
484. What is grant date?
fied as an additional objective of financial
A. A date at which the entity and the coun- reporting, equal in prominence to provid-
terparty agree to a share-based payment ing financial information useful to users in
arrangement, being when the entity and making decisions relating to providing re-
the counterparty have shared understand- sources to the entity
ing of the policies, terms, conditions and B. Decisions relating to providing re-
pre-existing contract of agreement. sources to the entity depend on users’ as-
B. A date at which the entity and the coun- sessment of the amount, timing and uncer-
terparty agree to a share-based payment tainty of the prospects for future net cash

inflows to the entity and on their assess- A. Accrued Expense

ment of management’s stewardship B. Accrued Revenue
C. Providing information needed to as- C. Deferred Revenue (Unearned Rev-
sess stewardship is more important than enue)
providing information needed to assess
the prospects for future cash inflows to D. Deferred Expense (Prepaid Expense)
the entity 493. It shows the changes in equity between
D. Financial reports are not intended to two accounting periods reflecting the in-
NARAYAN CHANGDER
provide information needed to assess crease or decrease in the entity’s net as-
stewardship sets during the year.
A. Statement of Changes in Net As-
488. Revenue should be recognized
sets/Equity
A. at the end of production
B. Statement of Net Assets
B. at the time of cash collection
C. Statement of Equity
C. when realized D. none of above
D. when the performance obligation is
satisfied 494. GL Tie out reconciliation must be re-
viewed and approved prior to what sub-
489. Refers to the allocation of the cost of the mission?
asset over its estimated useful life. A. QTBS
A. Consumption B. QSSA
B. Deterioration C. QBTS
C. Against the Asset D. QSSM
D. Depreciation
495. It is prepared after adjusting entries are
490. An entity is prohibited from publishing a made and posted in the ledger.
complete set of financial statements in ac- A. Income Statement
cordance with PAS 1 in its interim financial B. Balance Sheet
report.
C. Adjusted Trial Balance
A. TRUE
D. Unadjusted Trial Balance
B. FALSE
496. Refer to Figure 4.03-C. Based on the in-
491. Below are the parties who need account- formation provided, what is the working
ing information, especially in making deci- capital for Ryan’s Sporting Goods?
sions or company policies?
A. Employee
B. Investor
C. Creditor A. $10, 000
D. Government B. $66, 000
492. Rent paid in advance is an example of C. $70, 000

which of the following? D. $71, 000

497. The enhancing qualitative characteristics 501. Intrinsic value is?

of financial information include: A. The difference of market value of
share option over the option price.

A. Comparability and understandability
B. Relevance and timeliness B. The excess of market value over the
nominal value.
C. Understandability and faithful repre-
sentation C. The difference between the market
value and the fair value
D. Relevance and faithful representation
D. None of the above.
498. The remaining equipment is Rp. 500, 502. Insurance paid Rp. 18, 000, 000 for a
000, in the Trial Balance there is an Equip- period of 1 year starting May 1 2020 and
ment account of Rp. 800, 000 recorded as insurance expense. If adjust-
A. Supplies (D) Rp. 300, 000 Supplies Ex- ments to insurance are made on June 30
pense (K) Rp. 300, 000 2020. Then the correct amount of insur-
ance expense is
B. Supplies Expense (D) 500, 000 Sup-
plies (K) Rp. 500, 000 A. Rp. 1.500.000
C. Supplies (D) Rp. 500, 000 Supplies Ex- B. Rp. 3.000.000
pense (K) Rp. 500, 000 C. Rp. 7.500.000
D. Supplies Expense (D) Rp. 300, 000 Sup- D. Rp. 10.500.000
plies (K) Rp. 300, 000
503. Which of the following is the pro (agree)
499. Farr Corp. had the following trans- Rational for regulating financial account-
actions during the quarter ended March ing practicei. Markets for information are
31, 20X7:Loss from rare earthquake P70, not efficient; without regulation a sub-
000Payment of fire insurance premium optimal amount of information will be pro-
for calendar year 20X7 P100, 000 What duced and ignore the rights of individual
amount should be included in Farr’s income investors, some of whom can lose their
statement for the quarter ended March 31, savings as a result of relying upon unreg-
20X7? (Casualty loss-Insurance expense) ulated disclosure.ii. Investors need pro-
tection from fraudulent organizations that
A. Casualty loss:70, 000; Insurance ex- may produce misleading informationiii. Ac-
pense:100, 000 counting information iv. Enhancing compa-
B. Casualty loss:70, 000; Insurance ex- rability
pense:25, 000 A. iii only
C. Casualty loss:17, 500; Insurance ex- B. i and ii
pense:25, 000
C. i, ii, and iii
D. Casualty loss:0; Insurance ex- D. i, ii and iv
pense:100, 000
504. An entity may rely on estimates to a less
500. Recording transactions with rounding to extent during interim reporting compared
hundreds of rupiah = materiality to annual reporting.
A. Correct A. TRUE
B. Salah B. FALSE

505. The Stockholders’ Equity section of the 508. Which of the following the accounting
balance sheet for Alpine Ski Shop is shown standard that can be accepted i. Interna-
in Figure 4.03-F. The beginning stockhold- tional Accounting Standard Board ii. Fi-
ers’ equity amount was $500, 000.00. nancial Accounting Standards Board USA iii.
Net income after federal income tax for Accounting Standards Board United State
the year was $65, 000.00. The cur- iv. Australian Accounting Standards Board
rent market price of the stock is $20.00 Australia
per share. Based on the information pro- A. iii only
vided, what is the return (rate earned) on
NARAYAN CHANGDER
average common stockholders’ equity for B. i, ii, and iii
Alpine Ski Shop? C. i, ii, and iv
D. all above
509. The signatories in the Statement of Man-

agement Responsibility is/are the:
A. Head of Finance/Accounting Office
only
A. 7.7%
B. 9.7% B. Head of Agency/Authorized Represen-
tative only
C. 11.5%
C. Both the Head of Finance/Accounting
D. 13.3%
Office and the Head of Agency/Authorized
506. Income tax expense reported on a com- Representative
pany’s income statement equals taxes- D. none of above
payable, plus the net increase in:
A. deferred tax assets and deferred tax 510. Under IFRS, a loss from the destruction
liabilities. of property in a fire would most likelybe
classified as:
B. deferred tax assets, less the net in-
crease in deferred tax liabilities. A. continuing operations.
C. deferred tax liabilities, less the net in- B. discontinued operations.
crease in deferred tax assets.
C. other comprehensive income.
D. none of above
D. none of above
507. The two “levels” of harmonization
511. Refer to Figure 1.04-E. Based on this in-
A. Harmonization in accounting stan-
formation, what is the correct journal en-
dards, which is increased agreement in
try to record the closing entry for Income
accounting rules.
Statement accounts with debit balances?
B. Harmonization in practice, which is in-
creased agreement in actual accounting
practices.
C. Harmonization in standards may or
may not result in harmonization in prac-
tice.
D. A, B, C True

A. Debit Income Summary-General, $40, 514. The responsibility for the fair presenta-
500; credit Income Summary-Books, $5, tion and reliability of financial statements
000, Income Summary-Music, $4, 000, rests with the of the reporting entity.

Sales Discount-Books, $1, 500, Sales Re- A. Accountants
turns and Allowances-Books, $1, 000,
Sales Discount-Music, $2, 000, Sales Re- B. Employees
turns and Allowances-Music, $1, 500, C. Management
Purchases-Books, $10, 000, Purchases- D. none of above
Music, $12, 000, Advertising Expense-
Books, $2, 500, Advertising Expense- 515. Fresh Market’s gross profit margin is un-
Music, $1, 000 changed, but the net profit margin (return
B. Debit Income Summary-Books, $5, on sales) declined over the same period.
000, Income Summary-Music, $4, 000, What is a possible reason for this?
Sales Discount-Books, $1, 500, Sales Re- A. Dividends were decreased.
turns and Allowances-Books, $1, 000, B. Sales increased relative to expenses.
Sales Discount-Music, $2, 000, Sales Re-
turns and Allowances-Music, $1, 500, C. The U.S. Congress increased the tax
Purchases-Books, $10, 000, Purchases- rate.
Music, $12, 000, Advertising Expense- D. The cost of goods sold increased rela-
Books, $2, 500, Advertising Expense- tive to sales.
Music, $1, 000; credit Income Summary-
General, $40, 500 516. Which of the following is not considered
as an Inflow in Income statement (Profit
C. Debit Sales, $9, 000; credit Income and Loss)?
Summary, $9, 000
A. Premium
D. Debit Income Summary, $9, 000;
B. Segregated Fund
credit Sales, $9, 000
C. Investment Income
512. The definition of accounting as an art was D. None of the above
put forward by:
517. An entity owns a number of farms that
A. AAA harvest produce seasonally. Approxi-
B. AICPA mately 80% of the entity’s sales are in
the period August to October. Because the
C. IBRA
entity’s business is seasonal, PAS 34 sug-
D. IAI gests
E. THING A. Additional notes be written in the in-
terim reports about the seasonal nature
513. It should be understandable to people of the business.
with general financial knowledge. B. Disclosure of financial information for
A. Comparability the latest and comparative 12-month pe-
riod in addition to the interim report.
B. Understandability
C. Additional disclosure in the accounting
C. Relevance policy note.
D. Reliability D. No additional disclosure.

518. Global used $20 million of its available B. Increases the scope for professional
cash to repay $20 million of its long-term judgement.
debt. Which line items in Global’s balance C. Eliminates the scope for professional
sheet would be affected? judgement.
A. Cash D. Has no impact on the scope for profes-
B. Long-term Debt sional judgement
C. Book Value of Equity 523. The financial report covers all the impor-
NARAYAN CHANGDER
D. Accounts Receivable tant things = materiality
Explanation:When Global repays its long- A. Correct
term debt, it uses its cash reserves, de-
creasing the Cash line item. Simultane- B. Salah
ously, the Long-term Debt line item de- 524. Which of the following is false about
creases because the debt is repaid. keeping accounting records?
519. PAS 34 encourages publicly traded enti- A. To sufficiently explain the transactions
ties to provide at least quarterly interim of the company
financial report and publish them not later B. Records need to be retained for five
than 45 days after the end of the interim years
period.
C. Records are to be kept at the regis-
A. FALSE tered office
B. TRUE D. Audit can be carried out conveniently
and properly
520. Assuming no changes in other vari-
ables, which of the following would de- 525. The conceptual framework set out the
creaseROA? concepts that underlie the preparation and
A. A decrease in the effective tax rate. presentation of financial statements
B. A decrease in interest expense. A. true
C. An increase in average assets. B. false
D. none of above 526. In the event of a conflict between the
Conceptual Framework and Accounting Pol-
521. Which one is liability?
icy, according to the Purworejo Accounting
A. Loans Policy Regulation
B. Cash A. A conceptual framework is featured
C. Capital B. The conceptual framework is given rel-
D. Debentures ative prominence
E. Payables C. Accounting policies are favored
D. Accounting policies are favored rela-
522. What effect does a framework have on tively
an accountant’s need to exercise profes-
sional judgement? 527. Cash flows from taxes on income must be
A. Reduces the scope for professional separately disclosed under:
judgement. A. IFRS only.

B. US GAAP only. A. Balance Sheet

C. both IFRS and US GAAP. B. Statement of Financial Position

D. none of above C. Cash Flow Statement
528. Use of paranthetical information (brack- D. Statement of Income
ets) in financial reports = verifiability
533. Identify which of the following state-
A. Correct ments are true or false.1. The directors
B. Salah of a company are ultimately responsible
for the preparation of financial statements,
529. A report of the revenue, expenses, and even if the majority of the work on them
net income or loss for the accounting pe- is performed by the finance department.2.
riod If financial statements are audited, then
A. General Journal the responsibility for those financial state-
ments insteadfalls on the auditors instead
B. General Ledger
of the directors.3. There are generally no
C. Income Statement laws surrounding the duties of directors in
D. Balance Sheet managing the affairs of acompany.
E. Statement of Cash Flows A. 1 only
B. 2 only
530. A company using the LIFO method reports
the following in £.Cost of goods sold for C. 2 and 3 only
2018 under the FIFO method is closest to: D. 1 and 3 only
534. is a regulatory body that is responsi-

ble to promote monetary and financial sta-
bility.
A. £48, 530. A. Malaysian National Bank
B. £49, 080. B. Maybank Malaysia
C. £52, 520. C. Securities Commission
D. none of above D. Registrar of Companies
531. Financial reports are prepared not to ac- 535. Cost accounting provides
commodate the needs of certain parties =
cost constraints A. significant cost classification
A. Correct B. relevant cost for decision making

B. Salah C. acsertains costs of production
D. cost objects
532. Isla started a small business and Samuel
is helping her with the financial aspects. 536. When a company buys shares of its own
They are trying to understand the total stock to be held in treasury, it recordsa re-
amount of cash that has been generated duction in:
and used during a particular period of time.
Which financial statement should they re- A. both assets and liabilities.
fer to? B. both assets and shareholders’ equity.

C. assets and an increase in sharehold- C. Statement of Comparison of Budget

ers’ equity. and Actual Amounts
D. none of above D. none of above
537. The two main statute governing finan- 540. Refer to Figure 4.03-D. Based on this in-
cial reporting by companies are Financial formation, what is the ratio of property,
Reporting Act 1997 and Companies Act plant, and equipment to long-term liabili-
2016. ties for the company?
NARAYAN CHANGDER
A. True
B. False
538. Bank Negara undertook a review of the

original BNM/GP3 in 1989 and made
some modifications and refinements to the A. 1.04 to 1
original provisions. the main provisions of
BNM/GP3 were as follows except: B. 1.63 to 1
A. where a loan is classified as non- C. 2.88 to 1
performing, interest accrued should be D. 3.77 to 1
suspended and credited to interest-in-
suspense account 541. Micro entities has no option to use as
B. a specific provision is required for their financial reporting framework either
doubtful or bad loan account when there the income tax basis or PFRS for SEs.
is a shortfall in security value over the A. TRUE
amount of loan outstanding
B. FALSE
C. financial institutions are required to
build up and maintain a general provision 542. Which is correct?
for bad and doubtful debts of at least 1.5%
of total outstanding loans, net of interest- A. IAS10 Events after the Reporting Pe-
in-suspense and specific provision for bad riod
and doubtful debts B. IAS3 Events after the Reporting Period
D. conduct such public consultation as C. IAS12 Events after the Reporting Pe-
may be necessary in order to determine riod
the contents of accounting concepts, prin-
ciples and standards. D. IAS8 Events after the Reporting Period
539. It is a separate additional financial state- 543. This means an unintentional mistake in
ment for comparison of budget and actual the financial statements which reduces or
amounts which shall be prepared since the increases the related accounts by ten per
financial statements and budget of NGAs cent (10%) or more.
are not on the same accounting basis. A. Entity
A. Statement of Comparison of Budgetary
B. Error
and Actual Amounts
C. Fraud
B. Statement of Comparison of Budgeted
and Actual Amounts D. Issuer

544. Which is correct? 548. Purple Fleur S.A., a retailer of floral prod-
A. IAS7 Statement of cashflows ucts, reported cost of goods sold forthe
year of $75 million. Total assets in-

B. IAS6 Statement of cashflows creased by $55 million, but inventory-
C. IFRS7 Statement of cashflows declined by $6 million. Total liabilities
D. IFRS6 Statement of cashflows increased by $45 million, and accounts-
payable increased by $2 million. The cash
545. An entity granted a share appreciation paid by the company to its suppliersis most
right to the CEO on January 1, 2022. Af- likely closest to:
A. $67 million.
preciation in share price over the market B. $79 million.
value on January 1, 2022. The market C. $83 million.
value on January 1, 2020 is the prede- D. none of above
mining the compensation. The share op- 549. Interim financial reports may be prepared
tion right has the following terms:Service using either PAS 1 Presentation of Finan-
period-January 1, 2022-December 31, cial Statements or PAS 34 Interim Financial
2024Number of shares-100, 000Exercise Reporting.
date-January 1, 2025The quoted prices of A. FALSE
B. TRUE
2023-152December 31, 2024-160What 550. The following are accounts that must be
is the debit entry on January 1, 2025? eliminated in the financial statements
A. Accrued Salaries Payable 800, 000 A. Third Party Receivables
B. Salaries Expense 1, 000, 000 B. Related party debt
C. Accrued Salaries Payable 1, 000, 000 C. Investment
D. Salaries Expense 800, 000 D. Fixed assets
546. What is the most notable specific differ- 551. is the transfer of journalized transac-
ence between GAAP and IFRS? tions to their accounts.
A. Related to accounts payable treatment A. Posting
B. Related to treatment of accounts re- B. Recording
ceivable C. Updating
C. Related to the treatment of inventories D. Journalizing
D. Related to treatment of intangible as-
sets 552. What will the balance on the suspense
account be after making the necessary en-
547. In DA transaction, financial asset is cre- tries to correct the errors affecting the sus-
ated by crediting/creating: pense account?
A. Liability A. $2, 440 debit
B. Other Comprehensive Income B. $15, 560 Credit
C. Retained Earnings C. $13, 640 Debit
D. Profit and Loss Account D. $3, 440 Debit

553. What is the role of Financial Reporting B. Providing information regarding the
Foundation? performance of a business
A. To issue new accounting standards C. Enabling users to assess the perfor-
B. To review, revise or adopt standards mance of management to aid decision
as existing accounting standards making
C. To develop conceptual framework D. Providing reliable investment advice
D. To supervise the activities of MASB
558. Deferred tax assets, which appear on the
NARAYAN CHANGDER
554. Revision of the Conceptual Framework balance sheet, arise when:
will automatically lead to changes in Stan- A. a deficit amount is paid for income
dards that are inconsistent with the re- taxes and the company expects to elimi-
vised concepts. nate the deficit over the course of future
A. True operations
B. False B. the company paid the tax
555. A supplier of goods on credit is interested C. an excess amount is paid for in-
only in the statement of financial position, come taxes (taxable income higher than
ie an indication of the current state of af- accounting profit) and thecompany ex-
fairs. The objective of financial statements pects to recover the difference during the
is to provide information about the finan- course of future operations.
cial position, performance and changes in D. none of above
financial position of an entity that is use-
ful to a wide range of users in making eco- 559. The sale of a building for cash would be
nomic decisions.Identify, by indicating the classified as what type of activity on the
relevant box in the table below, whether cash flow statement?
each of the following statements istrue or
A. Operating
false
A. True, False B. Investing
B. False. True C. Financing

C. True, True D. none of above
D. False, False
560. Finance Lease is allowed under PFRS for
556. Depreciation is a top process Small Entities
A. Valuation A. True
B. Cash Accumulation B. False
C. Cost allocation
561. The main revenue generating activity of
D. Appraisal the company is
557. According to the IASB Conceptual Frame- A. Operational Activities
work which of the following is NOT an ob-
B. Sales Activities
jective of financial statements?
C. Funding Activities
A. Providing information regarding the fi-
nancial position of a business D. Investment Activities

562. Represent revenue or income already col- utilised in more difficult times, to smooth-
lected but not yet earned; also referred to profits.Identify, by indicating the relevant
as advances from customers. box in the table below, whether each of

the following statements iscorrect or incor-
rect.
A. correct, incorrect
B. incorrect, correct
C. correct, correct
D. incorrect, incorrect
566. a block of time covered by an accounting
report is
A. Accrued Income
A. Accounting Period
B. Service Revenue
B. Calendar Year
C. Unearned Revenue C. Fiscal Year
D. Sales Revenue D. none of above
563. The following types of companies are ser- 567. Who is responsible for establishing IFRS?
vice companies except: A. IFAC
A. Accounting firm B. IASB
B. Legal aid agency office C. FISH
C. Vehicle rental D. IASCF
D. Drugstore 568. Which one of the following is NOT a qual-
itative characteristic of financial informa-
564. Global’s EBIT in 2018 is $9.66 mil-
tion according to the Conceptual Frame-
lion.Given that Global’s interest expenses
work for Financial Reporting?
are $7.7 million and the tax rate is 26%,
what is Global’s net income in 2019? A. Faithful representation
A. + $1.45 million B. Relevance
B. -$0.55 million C. Timeliness
C. + $3.96 million D. Accruals
D. + $0.51 million 569. Revenue is recognized when the work is

Explanation:Net Income is calculated as completed = accrual
follows:Net Income = (EBIT-Interest) * A. Correct
(1-Tax Rate)Net Income = (9.66-7.7) * (1- B. Salah
0.26)
570. From 2015 to 2019, what was the to-
565. Companies should neverchange the pre- tal cash flow from operations that Mydeco
sentation orclassification of items in their generated?
financial statements, even if there is a
A. $246.4 million
significant change in the nature of oper-
ations.2. Companies should create provi- B. $247.4 million
sions in times of company growth to be C. $248.3 million

D. $249.1 million 575. Timeliness and neutrality are two ele-

Explanation:The total cash flow ments of relevance
from operations from 2015 to A. Correct
2019 can be calculated by sum-
ming the individual yearly cash B. Salah
flows:48.5+50.5+47.8+46.6+54=247.4 576. An analyst has calculated a ratio using as
million. the numerator the sum of operatingcash
571. What was Mydeco’s gross margin in flow, interest, and taxes and as the de-
NARAYAN CHANGDER
2019? nominator the amount of interest.What is
this ratio, what does it measure, and what
A. 0.51 does it indicate?
B. 1.96 A. This ratio is an interest coverage ratio,
C. 0.53 measuring a company’s ability to meet its
interest obligations and indicating a com-
D. 1.89
pany’s solvency.
Explanation:The Gross Margin is calcu-
lated as GROSS PROFIT/REVENUE. For B. This ratio is an effective tax ratio, mea-
Mydeco in 2019, it is 310.7/604.1 = 0.51 suring the amount of a company’s operat-
ing cash flow used for taxes and indicat-
572. The first level of the conceptual frame- ing a company’s efficiency in tax manage-
work identifies the recognition and mea- ment.
surement concepts used in setting account-
C. This ratio is an operating profitability
ing standards
ratio, measuring the operating cash flow
A. Correct generated accounting for taxes and inter-
B. Salah est and indicating a company’sliquidity.
D. none of above
573. The main accounting issues that must be
anticipated in upstream businesses, ex- 577. The financial statement that presents a
cept shareholder’s residual claim on assets is
A. Impairment the:
B. Asset retirement & Obligation (ARO) A. balance sheet.
C. Increase in oil prices (ICP) B. income statement.
D. Government audit (SKK & DGP) C. cash flow statement.
D. none of above
574. Which of the following payment is not in-
cluded in calculation of lease liability: 578. Refer to Figure 4.03-D. Based on the in-
A. variable lease payments that depend formation provided, what is the equity per
on an index or a rate share for the company?
B. amounts expected to be payable by the
lessee under residual value guarantees
C. variable lease payments that depends
on turnover
D. fixed payments, less any lease incen- A. $6.00 per share
tives receivable B. $9.40 per share

C. $9.80 per share C. Periodicity assumption

D. $25.00 per share D. Historical cost assumption

579. Which of the following statements about 582. Which of the following is the current
enhancing qualitative characteristics of fi- value measurement bases?
nancial statements is not correct? A. Fair value
A. Fair values of assets that cannot be B. Current cost
verified in an active market should not be
C. All of the above
disclosed in the financialstatements.
B. The financial statements of similar en-
tities adopting different asset measure- 583. Interpretations committee was estab-
ment bases can be adequately compared. lished when?
C. The value of invoices not yet received A. 2004
from suppliers for services should be esti-
B. 2000
mated at financial year end for reporting
purposes. C. 1982
D. Financial statements should be pre- D. 1973
sented with the assumption that a reason-
584. Unearned revenue is a(n) account.
able and informed third person will know
how to analyse financial information. A. Revenue
B. Expense
580. The IASB’s Conceptual Framework for
Financial Reporting gives six qualita- C. Asset
tive characteristics offinancial information. D. Liability
What are these six characteristics?
585. Which statement tells you about the as-
A. Relevance, Faithful representation, sets, liabilities and equity of the business?
Comparability, Verifiability, Timeliness
and Understandability A. Balance sheet
B. Accuracy, Faithful representation, B. Income statement

Comparability, Verifiability, Timeliness C. Cash flow statement
and Understandability D. None of them
C. Relevance, Faithful representation,
Consistency, Verifiability, Timeliness and 586. Pay attention to the following
Understandability data:Beginning inventory 1, 000 kg @
Rp. 3, 000 Purchase I 5, 000 kg @ Rp. 3,
D. Relevance, Comparability, Consis- 500 Sales I 3, 000 kg Purchase II 2, 000
tency, Verifiability, Timeliness and Under- kg @ Rp. 3, 750 Sales II 2, 500 kg If us-
standability ing the FIFO method, the ending inventory
value is
581. Which of the following is not a basic as-
sumption underlying the financial account- A. Rp 7.500.000
ing structure? B. Rp 8.200.500
A. Economic entity assumption C. Rp 8.500.170
B. Going concern assumption D. Rp 9.250.000

587. An activity that aims to group a com- 592. Under IFRS, income includes increases in
pany’s financial transactions in general economic benefits from:
ledger estimates is called
A. increases in liabilities not related to
A. Reporting owners’ contributions.
B. Summarizing B. enhancements of assets not related to
C. Classifying owners’ contributions.
D. Recording C. increases in owners’ equity related to
NARAYAN CHANGDER
E. Accounting owners’ contributions.
588. Accounting is concerned with those D. none of above

facts which be measured in monetary
terms.Based on the above statement, 593. Green Glory Corp., a garden supply
which concept should be best applied for? wholesaler, reported cost of goods sold
for the year of $80 million. Total assets
A. Accrual concept increased by $55 million, including an in-
B. Prudence concept crease of $5 million in inventory. Total li-
C. Historical cost concept abilities increased by $45 million, includ-
ing an increase of $2 million in accounts
D. Monetary concept payable. The cash paid by the company to
its suppliers is most likely closest to:
589. Which of the following is not included in
Tier II capital: A. $73 million
A. Preference shares other than those B. $77 million
which are compulsorily convertible into
equity C. $83 million
B. Revaluation reserves at discounted D. none of above
rate of fifty five percent
C. Debentures 594. When preparing interim financial reports
in accordance with PAS 34, financial state-
D. Hybrid debt capital instruments ment users are presumed to have access
590. In the interest of timeliness and cost con- to the most recent annual financial report
siderations, less information may be pro- of the entity.
vided at interim dates. This is most likely A. FALSE
an application of the concept of
B. TRUE
A. materiality
B. consistency 595. What is the first document financing re-
C. relevance over reliability porting Malaysia before independence?
D. faithful representation A. Companies Ordinances (and amend-

ments) 1940, 1946. 1956
591. The company prepares an interim report
= going concern B. Companies Act 1965
A. Correct C. Companies Bill 2015

B. Salah D. none of above

596. Deferred credits will appear on C. 2.452

the balance sheet under which head- D. none of above
ing/classification?

601. Small shareholder means a shareholder
A. Assets
holding shares of
B. Owner’s/Stockholders’ Equity
A. Nominal value of not more than Rs.20,
C. Liabilities 000
D. none of above B. Nominal value of more than Rs.20, 000
597. Companies Act 2016 creates two inde- C. Market value of not more than Rs.20,
pendent bodies which are Financial Report- 000
ing Foundation and Malaysian Accounting D. None of the above
Standards Board.
602. Companies Bill 2015 has been approved
A. True by parliament to replace 1965 in its entity.
B. False However there are some conflict has been
removed on Companies Bill 2015 such as:i)
598. The framework attempts to develop a set Definition of subsidiaries is now aligned
of interrelated concepts, which serve to to that approved accounting standard for
structure and explain existing financial re- accounting purposes. ii) Fifth Schedule iii)
porting practices. Ninth schedule iv) Companies Ordinances
A. Thinking Framework A. ii only
B. conceptual framework B. i and ii
C. Descriptive Framework C. i, iii, and iv
D. Shadow Framework D. all above
599. Customers/consumers need information 603. Which of the following statements about
regarding: accounting concepts and the characteris-
A. director of the company tics of financialinformation are correct?1.
The concept of accruals requires transac-
B. Company commissioner
tions to be reflected in the financial state-
C. Price of company products ments once thecash or its equivalent is re-
D. Corporate survival ceived or paid.2. Information is material
if its omission or misstatement could influ-
E. Company shareholders
ence the economic decisions ofusers taken
600. The following presents selected financial on the basis of the financial statements.3.
information for a company:The financial Based on faithful representation, it may
leverage ratio is closest to: sometimes be necessary to exclude mate-
rial informationfrom financial statements
due to difficulties establishing an accurate
figure.
A. 1 only
B. 1 and 2 only
A. 0.113 C. 2 only
B. 0.277 D. 2 and 3 only

604. A company has its transitional state- 609. Useful for making predictions and provid-
ments to start using IFRS as standard, ing useful information to users
what do they have to do? A. Understandability
A. Adjust transitional statements to all
B. Comparability
IFRS requirements and policies
B. Adjust transitional statements to all C. Relevance
IFRS but not IAS, IFRIC or SIC D. Reliability
C. Adjust transitional statements to IFRS
NARAYAN CHANGDER
610. Accounting standards result from the in-
requirements
teraction of factors
D. Adjust transitional statements to IFRS
policies and some requirements A. economic events
B. personal interests
605. Audit committee is meant for of the
company. C. historical journey
A. Bankers D. all true
B. BOD
611. The owner records the taking of private
C. Shareholders = economic entity
D. Creditors A. Correct
606. The final basis change will cause a 50 M B. Salah
USD decrease in reserve. Which lines in In-
come Statement (Profit and Loss) will be 612. Global used $5 million in cash and $5 mil-
affected? lion in new long-term debt to purchase a
A. Reinsurance $10 million building. Which line items in
Global’s balance sheet would be affected?
B. Basis Change impact
A. Cash
C. Surrender Benefit
D. Change in Reserve B. Long-term Debt
C. Assets
A. IFRS 15 Revenue from contracts with D. Inventory
customers Explanation:ASSET SIDE:-Cash decreases
by $5 million;Assets increase by $10
B. IAS 15 Revenue from contracts with million due to the new building.Tot
customers change:+$5 millionLIABILITY SIDE:-
C. IFRS 18 Revenue from contracts with Long-term debt increases by $5 mil-
customers lion.Tot change:+$5 million
D. IAS 18 Revenue from contracts with
613. The amount your business owes to credi-
customers
tors
608. Can you generate a duplicate Commission A. Liabilities
Inbox with the same Reseller and Date
Range inputs? B. Accounts Payable
A. Yes C. Owner’s Equity
B. No D. none of above

614. Which of the following is not a qualita- A. 3.13 to 1

tive characteristic of financial statements? B. 3.22 to 1

A. Relevant C. 3.27 to 1
B. Reliable D. 3.92 to 1
C. Timeliness
619. The following are accounting standards
D. Understandability prepared by the Financial Accounting Stan-
dards Board, except
615. Refer to income or revenue already
earned but has not yet been collected. A. Financial Accounting Standards
B. ETAP Financial Accounting Standards
(Private Entity SAK)
C. EMKM Financial Accounting Standards
D. Sharia Accounting Standards
620. December 2020 interest income Rp. 100,

000, but will only receive it next month.
The adjusting entry at the end of Decem-
A. Unearned Revenue ber 2020 is
B. Accrued Income A. Interest Receivable (D); Interest Rev-
C. Prepaid Income enue (K) Rp. 110.000
D. Service Revenue B. Interest Receivable (D); Interest Rev-
enue (K) Rp. 100.000
616. Using the straight-line method of depre- C. Interest Expense (D); Interest Payable
ciation for reporting purposes andacceler- (K) Rp. 100.000
ated depreciation for tax purposes would
most likely result in a: D. Interest Receivable (D); Interest
Payable (K) Rp. 110.000
A. valuation allowance.
B. deferred tax asset. 621. Refer to Figure 4.03-J. Using the infor-
mation provided, what is the accounts re-
C. temporary difference. ceivable turnover rate for each year, 20X2
D. none of above and 20X1?
617. For a right to meet the definition of an as-

set, it needs to be likely that the right will
produce economic benefits for the entity
A. True A. 5.71 times for 20X2; 4.41 times for
20X1
B. False
B. 6.67 times for 20X2; 4.00 times for
618. Refer to Figure 4.03-C. Based on the in- 20X1
formation provided, what is the current ra-
C. 5.00 times for 20X2; 4.92 times for
tio for the company?
20X1
D. 2.86 times for 20X2; 2.21 times for
20X1

622. Which of the following components of the 627. Revenue earned but not yet collected is
cash flow statement may be prepared un- an example of which of the following?
der the indirect method under both IFRS
A. Deferred expense (prepaid expense)
and US GAAP?
A. Operating B. Deferred revenue (uneamed revenue)
B. Investing C. Accrued revenue

C. Financing D. Accrued expense
NARAYAN CHANGDER
D. none of above
628. A report of the final balances of all as-
623. In order to carry out accounting records, set, liability, and owner’s equity accounts
each transaction must be expressed in at the end of an accounting period
units of money. This statement is part of
A. General Journal
A. basic accounting concepts
B. General Ledger
B. concept in starting a business
C. Income Statement
C. the concept of carrying out a contract
D. interaction concept D. Balance Sheet
E. Statement of Cash Flows
624. In which of the following measurement
transaction cost is not adjusted in the fair
629. Accounting is all about
value of asset:
A. Amortised cost A. Recording entries
B. Fair Value through Other Comprehen- B. Calculating profit

sive Income (Debt) C. providing relevant financial informa-
C. Fair Value through Other Comprehen- tion for decision makers
sive Income (Equity)
D. calculating asset values
D. Fair Value through Profit & Loss
630. Qualitative characteristics of information
625. cooperation between two or more oil and
gas companies carried out with the aim A. Understandability
of cultivating and developing their geologi- B. Convergen Validity
cally close areas, is a form of cooperation:
C. Flexibility
A. Technical Assistance Contract (TAC)
B. Enhanced Oil Recovery (EOR) D. Facility
C. Unitized 631. Generally, company condition reports are
D. PSC Contract routinely reported to the board of direc-
tors every?
626. Accrual concept is based on:
A. Weekly
A. matching principle
B. dual aspect principle B. Monthly
C. cost principle C. Daily

D. going concern concept D. Yearly

632. Jabroni’s Meat Market recorded a final C. Financial Reporting

net income of $75, 000. The correct clos- D. none of above
ing entry to record net income in the Re-

tained Earnings account is: 636. that a financial report must be able to
A. Debit Retained Earnings, $75, 000; produce the same results when carried out
credit Income Summary-General, $75, by another person using the same method
000. is referred to as
A. Comparability
B. Debit Income Summary-General, $75,
000; credit Retained Earnings, $75, 000. B. Verifiability
C. Debit Income Summary, $75, 000; C. Understandability
credit Net Income, $75, 000. D. Neutrality
D. Debit Net Income, $75, 000; credit In-
637. Relevance and faithful representation are
come Summary, $75, 000.
two fundamental qualities that make ac-
633. Harmonization and Convergence counting information useful for decision
making
A. Harmonization:The process of reduc-
tion of alternatives while maintaining a A. Correct
high degree of flexibility in accounting B. Salah
practices.
638. Refer to Figure 1.04-C. The January 1
B. Term is now becoming “antiquated.” beginning balance of Prepaid Insurance ac-
C. Convergence the adoption of one count was $8, 000. Based on this infor-
set of standards internationally. This is mation, what is the correct adjusting entry
the main objective of the IASB. to journalize the prepaid insurance adjust-
ment?
D. A, B, C True
634. What is the Return on Investments

for 9M 2022 on P&C Re?ROI=(Net
vestment)*100%*Time effectAnnualiza-
tion1st Q (12/3 =4) 2nd Q (12/6=2) 3rd
Q (12/9=1, 3333) 4th Q (12/12=1)
A. 1, 4% A. Debit Prepaid Insurance, $8, 000;
B. 1, 3% credit Insurance Expense, $8, 000
C. 3% B. Debit Insurance Expense, $8, 000;

credit Prepaid Insurance, $8, 000
D. 1, 9%
C. Debit Insurance Expense, $3, 800;
635. It involves the process of preparation, credit Prepaid Insurance, $3, 800
presentation and submission of General D. Debit Prepaid Insurance, $3, 800;
Purpose Financial Statements and other re- credit Insurance Expense, $3, 800
ports.
639. The change in income tax rate under CRE-
A. Financial Reports ATE Act is an adjusting subsequent event
B. Financial Statements in 2020.

A. True B. can be compared with similar informa-

B. False tion about an enterprise at other points in
time
640. The SEC issued the SRC Rule 68 as C. would have no impact on a decision
amended. maker
A. TRUE D. is free from bias toward a predeter-
B. FALSE mined result
NARAYAN CHANGDER
641. In order to assess a company’s ability to 645. Disqualification of a director is specified
fulfill its long-term obligations, an analyst in section
would most likely examine: A. Sec-149
A. activity ratios. B. Sec-152
B. liquidity ratios. C. Sec-164
C. solvency ratios. D. Sec-161
D. none of above 646. Significant financial reporting issues fac-
642. If equity equals $100, 000, which of the ing global financial reporting and efficient
following is true? capital allocation include all of the follow-
ing except
A. Liabilities exceed equity by $100.000.
A. How to provide backward-looking in-
B. None of the above is true formation.
C. Assets exceed liabilities by $100.000 B. How to report nonfinancial measures
D. Assets + liabilities equal $100, 000 such as customer satisfaction.
C. How to provide forward-looking infor-
643. GWM Sports Complex has equity per
mation
share of $95 for the current year. The
equity per share for the past two years D. How to provide real-time financial
was $128 and $112, respectively. Which statement information
statement would most likely explain the 647. Which of the following countries adapted
change in equity per share over the past the requirements of IFRS for SMEs?
three years?
A. Costa Rica
A. GWM has decreased its operating ex-
penses significantly over the past three B. Peru
years. C. Brazil
B. GWM has reduced notes receivable D. Ecuador
significantly over the past three years.
648. Mr Andi separates company assets and
C. GWM has consistently increased net personal property. This concept is
income over the past three years. called
D. GWM had a significant decrease in A. Sustainable Concept
sales over the past three years. B. Concept of Measurement and Value of
644. Information is neutral if it Money
A. provides benefits which are at least C. Concept of Exchange Price
equal to the costs of its preparation D. Business Entity Concept

649. According to the Conceptual Framework C. The going concern concept

for Financial Reporting, which of the fol-
D. The business entity concept
lowing is not an enhancing qualitative char-

acteristic of information in financial state-
654. Accounting is considered to provide an
ments?
overview of the company’s current eco-
A. Accuracy. nomic situation. This is the nature of ac-
B. Timeliness. counting as
C. Comparability. A. Catata historis
D. none of above B. Economic reality
650. The initial measurement of goodwill is C. Information Systems
most likely affected by: D. Accountability
A. an acquisition’s purchase price.
E. Activity procedures
B. the acquired company’s book value.
C. the fair value of the acquirer’s assets 655. Which of the following is a fundamental
and liabilities. quality of useful accounting information?
D. none of above A. Conservatism
651. The non-controlling (minority) interest in B. Comparability
consolidated subsidiaries is presentedon C. Faithful representation
the balance sheet:
D. Consistency
A. as a long-term liability.
B. separately, but as a part of sharehold- 656. On December 1, ABC Co. hired Marko
ers’ equity. Smith to begin working on January 2 at a
C. as a mezzanine item between liabili- monthly salary of $4, 000. ABC’s balance
ties and shareholders’ equity. sheet of December 31 will show a liability
of what amount?
D. none of above
A. No liability
652. Accounting policies, methods, and esti-
mates used in preparing financial state- B. $48, 000
ments are most likely to be found in the: C. $4, 000
A. auditor’s report. D. none of above
B. management commentary.
C. notes to the financial statements. 657. Which principle states that one must “re-
port enough information for outsiders to
D. none of above make informed decisions about the com-
653. Which accounting concept should be con- pany?”
sidered if the owner of a business takes A. Revenue
goods from inventory for their own per-
sonal use? B. Matching
A. The materiality concept C. Disclosure
B. The accruals concept D. Consistency

658. Which one is asset? 662. A company’s taxable income is the basis
for its:
A. Bonds
A. Income tax payable (an assets)
B. Car
B. income tax payable (a liability)
C. Receivables
C. income tax payable (a stockholders eq-
D. Borrowings uity)
E. Inventories D. none of above
NARAYAN CHANGDER
659. Refer to the expenses that are already 663. Cole’s Custom Designs offers custom
incurred, used, utilized or consumed but skateboards and skateboard gear for sale.
have not yeen been paid. Alice, the accountant for the company, is
currently preparing the Departmental Mar-
gin statements. Based on the information
provided, what is the Departmental Mar-
gin for the Skateboards Division? Refer to
Figure 1.03-B
A. Prepaid Expenses
B. Unearned Expenses
C. Accrued Expenses
D. Accounts Expense
660. During periods of rising inventory unit

costs, a company using the FIFOmethod A. $7, 290
rather than the LIFO method will report a
lower: B. $8, 700
A. current ratio. C. $8, 800

D. $15, 500
B. inventory turnover.
C. gross profit margin. 664. The fundamental qualitative characteris-
tics of financial information are:
D. none of above
A. Relevance and comparability
661. The final basis change will cause a 50 M B. Faithful representation and compara-
USD decrease in reserve. Which lines in bility
Balance Sheet will be affected?
C. Relevance and faithful representation
A. Asset D. Verifiability and understandability
B. Liability
665. The conceptual framework is not a tem-
C. Owner’s Equity plate for
D. Asset and Liability A. Financial Report Preparer
E. Liability and Owner’s Equity B. Inspector

C. Financial Report Users 670. NBFC shall not be allowed to voluntarily

D. Auditor APIP adopt Ind AS.

A. True
666. Audited financial reports are usually pub-
lished in March = timeliness B. False
A. Correct 671. Which is correct?
B. Salah A. IAS1 Inventories
667. Refer to Figure 1.04-C. The January 1 B. IAS2 Inventories
beginning inventory was $8, 000. What C. IFRS1 Inventories
is the correct adjusting entry to journalize
D. IAS3 Inventories
the supplies adjustments for the Clothing
Department? 672. Which template consists all versions &
transaction types of a Policy for a busi-
ness partner. E.g:New Business, MTA,
Cancelled
A. Policy Report (including version)
B. Policy Report (excluding version)
A. Debit Supplies-Clothing, $5, 700; A. IFRS19 Leases
credit Supplies Expense-Clothing, $5, 700 B. IFRS18 Leases
B. Debit Supplies Expense-Clothing, $5, C. IFRS17 Leases
700; credit Supplies-Clothing, $5, 700
D. IFRS16 Leases
C. Debit Supplies Expense-Clothing, $8,
000; credit Supplies-Clothing, $8, 000 674. A legal position of a director includes
D. Debit Supplies-Clothing, $8, 000; A. As a trustee
credit Supplies Expense-Clothing, $8, 000
B. As a managing partner
668. Where there is a conflict between the C. As an employee
requirement of the conceptual framework
D. As an officer
and the requirement of any specific stan-
dards, the requirement of the conceptual E. All of the above
framework should be followed
675. Insurance that has not expired is 5 times
A. True that has expired, insurance that has ex-
B. False pired is Rp500.000. In Trial Balance
there is an Insurance Expense account
669. Which of the following accounting con- Rp6.000.000
cepts means that similar items should re-
A. Prepaid Insurance (D) Rp2.500.000 In-
ceive a similar accounting treatment?
surance Expense (K) Rp2.500.000
A. Conformity
B. Insurance Expense (D) Rp500.000 Pre-
B. Accruals paid Insurance (K) Rp500.000
C. Matching C. Prepaid Insurance (D) Rp3.500.000 In-
D. Consistency surance Expense (K) Rp3.500.000

D. Insurance Expense (D) Rp2.500.000 680. Under PFRS for Small Entities, Retire-
Prepaid Insurance (K) Rp2.500.000 ment Benefit Obligation is computed under
676. Under PFRS for Small Entities, MSMEs A. Defined Contribution Plan
must only adopt Taxes Payable Method B. Defined Benefit Plan
A. True C. Accrual Approach
B. False D. Any of Defined Benefit Plan or Accrual
Approach
NARAYAN CHANGDER
677. Deferred tax liabilities should be treated
as equity when: 681. The debit side of a trial balance totals
A. they are not expected to reverse. $50 more than the credit side. Which one
of the following could this be due to?
B. the timing of tax payments is uncer-
tain. A. A purchase of goods for $50 being
omitted from the payables control account
C. the amount of tax payments is uncer-
tain. B. A sale of goods for $50 being omitted
from the receivables control account
D. none of above
C. An invoice of $25 for electricity being
678. Which ONE of the following is NOT an ob- credited to the electricity account
jective of the IFRS Foundation? D. A receipt for $50 from a customer be-
A. Through the IASB, develop a single set ing omitted from the cash book
of globally accepted International Finan-
cial ReportingStandards (IFRSs) 682. Refer to Figure 4.04-L. Based on the
price-earnings ratio for each year, which
B. Promote the use and rigorous applica- company shows an unfavorable trend for
tion of International Financial Reporting attracting potential investors?
Standards (IFRSs)
C. Ensure International Financial Report-
ing Standards (IFRSs) focus primarily on
the needs of global, multi-national organi-
sation
D. Bring about the convergence of na-
tional accounting standards and IFRSs
679. Refer to Figure 4.03-E. Based on this in-

A. Company W
formation, what is the return (rate earned)
on average total assets? B. Company X
C. Company Y
D. Company Z
683. Plant Assets Costs for Buildings include

A. 16.8% all costs directly related to the purchase or
construction, which include Purchase Costs
B. 37.1% and Construction Costs. Which is not the
C. 45.1% scope of purchase costs.
D. 57.5% A. Purchase costs

B. Closing costs and she is currently preparing the Depart-

C. Building permit fees mental Margin statements. Based on the
information provided, what is the Mer-

D. Notary fees chandise Available for Sale for the Skate-
boards Division? Refer to Figure 1.03-B
684. An auditor determines that a company’s
financial statements are prepared in ac-
cordance with applicable accounting stan-
dards except with respect to inventory re-
porting. This exception is most likely to
result in an audit opinion that is:
A. adverse.
B. qualified.
C. unqualified.
D. none of above A. $7, 290
B. $8, 700
685. Financial reports are prepared in rupiah =
monetary units C. $8, 800
A. Correct D. $15, 500
B. Salah 687. Accounting information is prepared based
on standards = comparability
686. Cole’s Custom Designs offers custom
skateboards and skateboard gear for sale. A. Correct
Alice is the accountant for the company, B. Salah

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PRACTICE BOOK» NOT FOR SALE

DESIGNED FOR SURE SUCCESS

JAI SHREE RAM

PRACTICE BOOK» NOT FOR SALE

It is my deepest gratitude and warmest

To my mother JOYTSNA CHANGDER

who has been a constant source of Knowledge and in-

The aim of this publication is to sup-

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PRACTICE BOOK» NOT FOR SALE

B. 20000 11. COMPUTATIONALVilo Corp. has estimated

6. B 6. C 7. A 8. C 9. A 10. D 11. C 12. A

A. 130. A. Political environment.

C. Statement of financial position in the D. 16.36%

13. C 14. A 15. B 16. C 17. A 18. A 19. A 20. D

PRACTICE BOOK» NOT FOR SALE

22. Refer to Figure 1.04-D. The correct jour-

21. A 22. C 23. C 24. A 25. B 26. D 27. C

27. Select the statement that is most suitable A. IAS 1

C. Depreciation Expense (D) Rp2.000.000 B. impairment.

C. $1, 077, 217. A. Quotes to FS

D. none of above B. Notes to FS

28. C 29. C 30. B 31. A 32. C 33. A 34. B 35. A

35. Financial Statements of corporation with A. FIFO

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A. True D. Specific Identification

B. False 41. If the current cost measurement basis is

B. The year-end financial statements’ C. Replacement cost

D. All of the above B. International Accounting Standards

36. B 37. D 38. D 39. B 40. A 41. C 42. A 43. D 44. B

45. A warehouse fire destroyed $5 million A. Financial Accounting

47. Accounting provides the information neces- 51. Which is correct?

45. A 46. B 47. A 48. B 49. E 50. C 51. A 52. A

PRACTICE BOOK» NOT FOR SALE

D. Salaries Expense 1, 000, 000 C. i, ii, and iv

53. C 54. C 55. C 56. D 57. C 58. A 59. B 60. D

B. Government B. Overcoming “Nationalism” and tradi-

C. Accrual 67. Arthur, Florence, and Max are studying for

C. Workinbox B. IFRS but may be classified as either op-

PRACTICE BOOK» NOT FOR SALE

A. Revenue expenditure C. Is not a PFRS and hence does not de-

69. B 70. D 71. A 72. A 73. A 74. C 75. B 76. D

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D. Verifiability 93. Failure of financial reporting and auditing.

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A. Delivery charges B. Debit Uncollectible Accounts Expense,

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110. The information provided by a balance B. $82, 500

113. At 30 June 20X2 a company had $1m

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A. Inventory management has con- B. A, C, D All are correct

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136. Which appears on balance sheet?

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145. All U.S. businesses uses the same sys- D. Accountability