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CFAS

The document discusses accounting concepts and definitions. It covers topics such as the definition of accounting, the conceptual framework, qualitative characteristics of financial statements, elements of financial statements, recognition, presentation and disclosure requirements. It also includes multiple choice questions testing understanding of these concepts.

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albertojrmorado
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5 views

CFAS

The document discusses accounting concepts and definitions. It covers topics such as the definition of accounting, the conceptual framework, qualitative characteristics of financial statements, elements of financial statements, recognition, presentation and disclosure requirements. It also includes multiple choice questions testing understanding of these concepts.

Uploaded by

albertojrmorado
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Accounting is a service activity and the function is to provide quantitative information,


primarily financial in nature, about economic entities, that is intended to be useful in
making economic decision. This accounting definition is given by
a. Accounting Standards Council
b. AICPA Committee on Accounting Terminology
c. American Accounting Association
d. Board of Accountancy
The Accounting Standards Council provides the following definition: Accounting is
a service activity, and the function is to provide quantitative information, primarily
financial in nature, about economic entities, that is intended to be useful in making
economic decision (Definition of Accounting Standards Council, Valix, et.al., pg.2).
2. Which is true about the Conceptual Framework?
a. The Conceptual Framework is not a Standard.
b. The Conceptual Framework describes the concepts for general purpose financial
reporting.
c. In case of conflict, the requirements of the IFRS prevail over the Conceptual
Framework
d. All of these statements are true.
The Conceptual Framework will be used in future standard setting decision but no
changes are made to the current IFRSa. The Conceptual Framework is intended to guide
standard setters, preparers and users of financial information in the preparation and
presentation of statementsb. In case where there is conflict, the requirements of the
International Financial Reporting Standards shall prevail over the Conceptual
Frameworkc (Conceptual Framework, Authoritative status of Conceptual Framework.
Valix, et.al., pg.28-29) .
3. What are the attributes that make the information provided in the financial statement
useful to the readers?
a. Qualitative characteristics of financial information
b. Quantitative characteristics of financial information
c. Elements of financial statements
d. Objectives of financial reporting
Qualitative characteristics are the qualities or attributes that make financial
accounting information useful to the users. (Qualitative Characteristics. Valix, et.al.,
pg.47).
4. What is the general objective of financial statements?
a. To provide information about economic resources of an entity, claims against
the entity and changes in the economic resources and claims.
b. To assess future cash flows to the entity.
c. To assess management stewardship of economic resources.
d. To satisfy the information needs of users of financial statements.
Financial statements provide information about economic resources of the reporting
entity, claims against the entity and changes in the economic resources and claims
(General Objective of Financial Statements. Valix, et.al., pg. 79).

5. The elements directly related to the measurement of financial position are


a. Asset, liability and equity
b. Asset and liability
c. Income and expense
d. Asset, liability, equity, income and expense
The elements directly relayed to the measurement of financial position are: asset,
liability and equity (Elements of Financial Statements. Valix, et.al., pg. 94).
6. It is the process of capturing for inclusion in the financial statements an item that meets
the definition of the elements of financial statements.
a. Recognition
b. Measurement
c. Classifying
d. Derecognition
The Revised Conceptual Framework defines recognition as the process of capturing
for inclusion in the financial statements an item that meets the definition of an asset,
liability, equity, income or expense (Recognition and measurement. Valix, et.al., pg.107).

7. The presentation and disclosure requirement achieves all of the following, except
a. An effective communication tool
b. More relevant and faithfully represented financial information
c. Understandability and comparability of information
d. Financial position, financial performance and cash flows
The presentation and disclosure can be an effective communication tool about the
information of financial statements. Effective communication of information in financial
statement makes the information more relevant and contributes to a faithful
representation of an entity’s assets liabilities, income and expenses. Effective
communication of information in financial statements also enhance the understandability
and comparability of information in the financial statement (Presentation and disclosure.
Valix, et.al., pg. 131).
8.
9. Prepare a properly classified statement of financial position on December 31, 2022

10. Compute total distribution costs and total administrative expense

11. What amount should be reported as net cash provided by operating activities?

a. 3,000,000
b. 3,300,000
c. 2,700,000
d. 2,000,000

12. Prepare the journal entry to recognize the change in the inventory valuation from FIFO to
weighted average method.

13. Prepare adjusting entries on December 31, 2022 for the events after reporting period.

14. What total amount should be reported as related party disclosures in the notes to Dean
Company’s consolidated financial statements for the current year?

a. 1,500,000
b. 1,550,000
c. 1,750,000
d. 3,000,000

15. At what figure should the inventory be measured?


a. 880,000
b. 760,000
c. 980,000
d. 940,000

16. What amount should be reported as total cost of land?


a. 9,160,000
b. 8,560,000
c. 9,000,000
d. 8,660,000

17. Prepare journal entries for the first year to record each independent government grant.

18. What amount should be reported as cost of the electricity generating plant on November
30, 2022?
a. 6,000,000
b. 6,450,000
c. 6,500,000
d. 6,550,000

19. a. Prepare journal entries to record the transactions under equity method.
b. Compute the carrying amount of the investment in associate on December 31, 2023.

20. What amount should be reported as impairment loss for the year?
a. 1,500,000
b. 2,000,000
c. 500,000
d. 0

21. What total amount should be reported as intangible assets?


a. 11,100,000
b. 11,500,000
c. 10,600,000
d. 13,100,000

22. a. Prepare journal entries for 2022 if the entity has elected the cost model of measuring
the investment property.
b. Prepare journal entries for 2022, 2023 and 2024 if the entity has elected fair value
model of measuring investment property.

23. 1. What total amount should be reported as biological assets?


a. 7,800,000
b. 5,800,000
c. 5,000,000
d. 7,000,000
2. What total amount should be included in property, plant and equipment?
a. 4,600,000
b. 3,400,000
c. 1,800,000
d. 4,200,000

24. What total amount should be accrued as provision on December 31, 2022?
a. 2,000,000
b. 2,500,000
c. 3,100,000
d. 2,300,000

25. A financial instrument is any contract that gives rise to


a. A financial asset
b. A financial liability
c. A financial asset of one entity and a financial liability of another entity
d. A financial asset of one entity and a financial liability or equity instrument
of another entity
PAS 32, paragraph 11, defines a financial instrument as any contract that gives
rise to both a financial asset of one entity and a financial liability or equity instrument
of another entity (Financial Instrument. Valix, et.al., pg.402).
26. a. Prepare journal entries for current year.
b. Compute the total income tax expense for current year.

27. What amount should be reported as projected benefit obligation on December 31?
a. 6,420,000
b. 7,500,000
c. 7,920,000
d. 8,220,000

28. What amount should be reported as basic earnings per share?


a. 8.50
b. 9.50
c. 9.00
d. 5.00

29. What total amount of expenses should be included in the income statement for the first
quarter?
a. 800,000
b. 725,000
c. 200,000
d. 0

30. In preparing financial statement in a hyperinflationary economy, what total amount


should be classified as monetary assets?
a. 6,200,000
b. 6,600,000
c. 6,700,000
d. 7,700,000

31. This is defined as the first annual financial statements in which an entity adopts PFRS by
an explicit and unreserved statement of compliance with PFRS?
a. PFRS financial statements
b. First PFRS financial statements
c. Opening PFRS statement of financial position
d. First audited financial statement
The first PFRS financial statements are the first annual statement in which ana
entity adopts PFRS by an explicit and unreserved statement of compliance with
PFRS (First PFRS financial statements. Valix, et.al., pg.489).

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