PHINMA University of Pangasinan ACC 109 Intermediate Accounting 4

College of Management and Accountancy Series of 2024

NAME: _____________________________________ STUDENT NUMBER: _________________________

YEAR/BLOCK: ______________________________ DATE: _____________________________________
Quiz on STATEMENT OF FINANCIAL d. Must make the current and noncurrent presentation
except when a presentation based on liquidity
POSITION provides information that is reliable and more
Multiple Choice Choose the best answer for each relevant.
of the following questions and indicate the letter in your
7. An entity shall classify an asset as current under all of the
answer sheet. Use CAPITAL LETTERS ONLY. following conditions, except
a. The entity expects to realize, or intends to sell or
1. What is the objective of financial statements? consume it within normal operating cycle.
a. To provide information about the financial position, b. The entity holds the asset primarily for the purpose of
financial performance and changes in the financial trading.
position useful to a wide range of users c. The entity expects to realize the asset within twelve
b. To prepare a statement of financial position and months after the reporting period.
statement of comprehensive income d. The asset is cash or cash equivalent restricted to
c. To present relevant, reliable, comparable and settle a liability for more than twelve months after the
understandable information reporting period.
d. To prepare financial statements in accordance with all
applicable standards 8. An entity shall classify a liability as current under all of the
following conditions, except
2. An entity shall present a. The entity expects to settle the liability within the
a. The statement of financial position more prominently normal operating cycle.
b. The income statement more prominently b. The entity holds the liability primarily for the purpose
c. The statement of cash flows more prominently of trading.
d. Each statement with equal prominence c. The liability is due to be settled within twelve months
after the reporting period.
3. When an entity changes the end of the reporting period d. The entity has the right at the end of reporting period
longer or shorter than one year, an entity shall disclose all of to defer settlement of the liability for at least twelve
the following, except months after the reporting period.
a. Period covered by the financial statements.
b. The reason for using a longer or shorter period. 9. A financial liability that is due to be settled within twelve
c. The fact that amounts presented in the financial months after the reporting period shall be classified as
statements are not entirely comparable. noncurrent
d. The fact that similar entities in the geographical area a. When it is refinanced on a long-term basis before the
in which the entity operates have done so. issue of financial statements.
b. When the entity has the right at the end of the
4. An entity must disclose comparative information for reporting period to roll over an obligation for at least
a. The previous comparable period for all amounts twelve months after the and of reporting period.
reported. c. When it is refinanced on a long-term basis after the
b. The previous comparable period for all narrative and end of reporting period.
descriptive information. d. Under all of these circumstances.
c. The previous comparable period for all amounts
reported, and for all narrative and descriptive 10. When an entity breaches under a long-term loan
information when it is relevant to an understanding of agreement on or before the end of the reporting period with the
the current period’s financial statements. effect that the liability becomes payable on demand, the liability
d. The previous two comparable periods for all amounts is classified as
reported. a. Current under all circumstances
b. Noncurrent under all circumstances
5. When the classification of items in the financial statements is c. Current if the lender agreed after the reporting period
changed, the entity and before the issuance of the statements not to
a. Must not reclassify the comparative amounts demand payment as a consequence of the breach.
b. Can choose whether or not to reclassify d. Noncurrent if the lender agreed after the end of the
c. Must reclassify the comparative amounts unless it is reporting period to provide a grace period for at least
impracticable to do so. twelve months after the reporting period.
d. Must reclassify current year amounts only.

6. In presenting a statement of financial position, an entity 11. An entity provided the following information on
a. Must make the current and noncurrent presentation. December 31, 2022:
b. Must present assets and liabilities in the order of Accounts payable 2,000,000
liquidity. Accrued expenses 800,000
c. Must choose either the current and noncurrent or the Bonds payable 2,500,000
liquidity presentation. Premium on bonds payable 300,000
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Deferred tax liability 500,000 15. An entity provided the following unadjusted balances
Income tax payable 1,100,000 at year-end:
Cash dividend payable 600,000 Cash 850,000
Share dividend payable 400,000 Share premium 600,000
Note payable – due March 1, 2023 1,500,000 Accounts receivable 1,650,000
What amount should be reported as total current Retained earnings 1,100,000
Prepaid taxes 600,000
liabilities?
Translation adjustment – debit 500,000
a. 6,000,000
Accounts payable 400,000
b. 6,400,000 Revenue 3,600,000
c. 4,500,000 Share capital 500,000
d. 6,500,000 Expenses 2,600,000

12. An entity reported the following current assets at During the current year, estimated tax payments of
December 31, 2022: P600,000 were charged to prepaid taxes. The entity has
Cash, including P1,000,000 sinking fund and P500,000 not yet recorded income tax expense. There were no
value added tax fund 5,000,000 differences between financial income and taxable tax
Accounts receivable 2,000,000 income and the tax rate is 25%. Included in accounts
Inventory, including goods received on consignment receivable is P500,000 due from a customer. Special
P200,000 800,000 terms granted to this customer require payment in equal
Equity investment at FVPL 3,000,000 semiannual installments of P125,000 every April 1 and
Equity investment at FVOCI 1,500,000 October 1. What amount should be reported as total
Deferred tax asset 550,000 current assets?
Deposit made on inventory to be delivered a. 2,600,000
in 18 months 150,000 b. 2,250,000
What total amount of current assets should be reported c. 2,475,000
December 31, 2022? d. 3,100,000
a. 11,200,000
b. 11,250,000 16. An entity reported the following liability balances on
c. 9,600,000 December 31, 2022:
d. 9,750,000 10% note payable issued on October 1, 2021, maturing
October 1, 2023 2,000,000
Use the following information for the next two 12% note payable issued on March 1, 2021 maturing on
questions March 1, 2023 4,000,000
An entity provided the following trial balance on December Under the loan agreement, on December 31, 2022 the
31, 2022: entity had an existing right to defer settlement of the 10%
Cash overdraft ( 200,000) note payable for at least twelve months after December
Property, plant and equipment, net 1,900,000 31, 2022. On March 1, 2023, the entire P4,000,000
Accounts receivable net 700,000 balance of the 12% note payable was refinanced through
Accounts payable 700,000 issuance a long-term obligation payable lump sum. The
Inventory 1,200,000 2022 financial statements were issued on March 31, 2023.
Share capital 3,000,000 What amount of the notes payable should be classified as
Prepaid expenses 200,000 current on December 31, 2022?
Share premium 500,000 a. 6,000,000
Land held for resale 2,000,000 b. 4,000,000
Retained earnings 1,600,000 c. 2,000,000
d. 0
Checks amounting to P600,000 were written to vendors
and recorded on December 31, 2022 resulting in cash 17. The end of reporting period of an entity is December
overdraft of P200,000. The checks were mailed on 31, 2022 and the financial statements for 2022 are
January 15, 2023. Land held for resale was sold for cash authorized for issue on March 31, 2023.
on January 31, 2023.  The entity had equity investments held for
13. What total amount should be reported as current trading. On December 31, 2022, these
assets? investments were recorded at the fair value of
a. 4,500,000 P5,000,000. During the period up to February 15,
b. 4,100,000 2023, there was a steady decline in the fair value
c. 4,300,000 of the shares in the portfolio and on February 15,
d. 2,500,000 2023, the fair value had fallen to P2,000,000.
 The entity had reported contingent liability on
14. What total amount should be reported as current December 31, 2022 related to court case in which
liabilities? the entity was the defendant. The case was not
a. 1,300,000 heard until the first week of February 2023. On
b. 1,500,000 March 1, 2023, the judge handed down a
c. 900,000 decision against the entity and determined that
d. 700,000 the entity was liable to pay damages and costs
totaling P3,000,000.
 On December 31, 2022 the entity had accounts
receivable from a large customer in the amount of
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P4,000,000. On March 15, 2023, the entity was advised in 23. General purpose financial statements are those
writing by the liquidator of the said customer that the statements that cater to the
customer was insolvent and that only 10% of the accounts a. common and specific needs of a wide range of external and
receivable will paid on December 31, 2023. internal users.
What total amount should be reported as “adjusting b. common needs of a wide range of external and internal
events” on December 31, 2022? users.
a. 6,600,000
c. common needs of a wide range of external users.
b. 7,000,000
d. specific needs of a wide range of external users.
c. 9,600,000
d. 0
24. In virtually all circumstances, a fair presentation is
18. Which of the following statements is correct? achieved by compliance with applicable IFRSs. A fair
a. PAS 1 Presentation of Financial Statements presentation also requires an entity: (choose the incorrect
prescribes the basis for presentation of general and statement)
special purpose financial statements to improve a. to select and apply accounting policies in
both inter-comparability and intra-comparability. accordance with PAS 8 Accounting Policies,
b. Intra-comparability is also referred to as horizontal Changes in Accounting Estimates and Errors. PAS 8 sets
comparability while inter-comparabilityis also referred out a hierarchy of authoritative guidance that management
to as vertical comparability. considers in the absence of a Standard or an
c. Working capital is the net amount of a company’s Interpretation that specifically applies to an item.
relatively liquid resources. It is the excessof total b. to present information, including accounting policies, in
assets over total liabilities. a manner that provides relevant, reliable, comparable and
d. Equity is the residual interest in the net assets of an understandable information.
entity. c. to provide additional disclosures when compliance with
the specific requirements in PFRSs is insufficient to
19. According to PAS 1, these are financial statements enable users to understand the impact of particular
intended to serve the needs of users who do not have transactions, otherevents and conditions on the entity’s
the authority to demand financial reports tailored for financial position and financial performance.
their own needs. d. to establish a system of internal control the
a. General purpose financial statements responsibility for which is the entity’s management.
b. Common purpose financial statements Furthermore, the entities financial statements should
c. Regular financial statements be audited by an independent external party at least
d. All-purpose financial statements annually.

20. The assessment of an entity’s going concern shall 25. Each component of the financial statements shall be
cover a minimum period of identified clearly. In addition, the following information shall
a. one year be displayed prominently, and repeated when it is
b. three years necessary for a proper understanding of the information
c. three months presented:
d. any of these I. The name of the reporting entity or other means
of identification, and any change in that
information from the preceding balance sheet
21. In which of the following instances would a liability date;
that would otherwise be presented as current is II. Whether the financial statements cover the
presented as noncurrent? individual entity or a group of entities;
a. The liability is payable on demand but the entity III. The balance sheet date or the period
estimates that it is probable that the lender will not covered by the financial statements,
demand payment within 12 months after the reporting whichever is appropriate to that component of
period. the financial statements;
b. The liability is payable on demand but the lender IV. The presentation currency, as defined in PAS 21
promises the entity after the reporting period that the The Effects of Changes in Foreign Exchange
lender will not demand payment in the next 12 Rates
months. V. The level of rounding used in presenting amounts
c. The entity enters into a refinancing agreement after in the financial statements.
the reporting period but before the financial a. I, II, III
statements are authorized for issue. b. I, II, IV, V
d. The entity enters into a refinancing agreement and c. I, II, III, IV
the refinancing agreement is completed by the d. I, II, III, IV, V
balance sheet date.

22. In a classified balance sheet, deferred tax 26. This financial statement is also called the balance sheet or
assets/liabilities are presented as the statement of financial condition.
a. non-current items if the deferred taxes are not a. Statement of financial position
expected to reverse within 12 months after the b. Statement of financial performance
reporting period c. Statement of financial operation
b. noncurrent items d. Any of these.
c. current items
d. a or c
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27. Which of the following information is not shown in the
balance sheet
a. Assets
b. Liabilities
c. Income
d. Equity

28. A complete set of financial statements does not include

a. Statement of profit or loss and other comprehensive
income
b. Statement of cash flows
c. Statement of retained earnings
d. Note to financial statements

29. These refer to the resources controlled by a business that

have resulted from past events and have the potential to
provide the business economic benefits.
a. Assets
b. Liabilities
c. Income
d. Equity

30. A statement of financial position that shows distinctions

between current and noncurrent assets and liabilities is
called
a. Classified statement of financial position
b. Unclassified statement of financial position
c. Current statement of financial position
d. All of these

****END OF QUIZ****

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PHINMA University of Pangasinan ACC 109 Intermediate Accounting 4
College of Management and Accountancy Series of 2024

NAME: _____________________________________ STUDENT NUMBER: _________________________

YEAR/BLOCK: ______________________________ DATE: _____________________________________

Quiz on Quiz on STATEMENT OF FINANCIAL POSITION

ANSWER SHEET

General Instructions
1. Strictly, no cell phone is allowed during the examination.
2. Borrowing, lending, and substitution/replacement of calculators while the examination is in progress are strictly
prohibited.
3. Use black ballpen only. Avoid using correction tape and friction pen. Strictly, no erasure.
4. Use CAPITAL LETTERS ONLY.
5. Your writing should be good and legible; it does not mean your writing has to be beautiful but it should be legible
(clear enough to read) with a neat and clean copy. Students who get good marks have good writing with a neat
and clean copy. Students who fail have a dirty copy with poor and illegible writing. Don’t try to fill pages
unnecessarily and write fast with illegible writing.
6. Strictly no cheating.
SCORE:

1 11 21

2 12 22

3 13 23

4 14 24

5 15 25

6 16 26

7 17 27

8 18 28

9 19 29

10 20 30

Checked by:

____________________________________

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