UNIVERSITY OF SANTO TOMAS
UST-Alfredo M. Velayo – College of Accountancy
España, Manila
IAC 11 – INTEGRATED REVIEW IN FINANCIAL ACCOUNTING AND REPORTING
2ND TERM, ACADEMIC YEAR 2019-2020
AGRICULTURE
1. All of the following must be satisfied before a biological
asset can be recognized, except
a. The entity controls the asset as a result of past event.
b. It is probable that future economic benefits relating to the
asset will flow to the entity.
c. An active market for the asset exists.
d. The fair value or cost of the asset can be measured
reliably.
2. Which
of
the
following
statements
is
true
regarding
agricultural produce?
a. In all cases, an entity shall measure agricultural produce
at fair value less cost of disposal at the point of harvest.
b. The fair value of agricultural produce at the point of
harvest can always be measured reliably.
c. The fair value measurement of agricultural produce stops at
the time of harvest.
d. All of these statements are true regarding agricultural
produce.
3. An entity had a plantation forest that is likely to be
harvested and sold in 30 years. How should income be accounted
for?
a. No income should reported annually until first harvest and
sale in 30 years.
b. Income should be measured annually and reported using a fair
value approach that
recognizes
and measures biological
growth.
c. The eventual sale proceeds should be estimated over the 30year period.
d. The plantation forest should be valued every five years.
4. Animals related to recreational activities, for example, game
parks and zoos, including the natural breeding of animals in
zoos, shall be accounted for under what standard?
a. PAS 41 – Agriculture
b. PAS 16 – Property, plant and equipment
c. PAS 40 – Investment property
d. Either PAS 41 or PAS 16
5. According to IASB, bearer plants, such as grape vines, rubber
trees and oil palms which are used solely to grow produce over
several periods should be accounted for as
a. Biological assets with disclosure
b. Biological assets without disclosure
c. Property, plant and equipment
d. Noncurrent investments
6. Which of the following typically would a result in a deferred
tax liability?
a. Warranty expense
b. Bad debt expense
c. Installment sales method for tax purposes and accrual
accounting for financial reporting
d. Unearned rental income
7. If the fair value of the biological asset cannot be determined
reliably, the biological asset should be measured at
a. Cost
b. Net realizable value
c. Current cost
d. Cost
less
accumulated
depreciation
and
accumulated
impairment losses
8. Agricultural activity
a. Is the aggregation of similar animals or plants
b. Is the detachment of agricultural produce from a biological
asset
c. Comprises the processes of growth, degeneration, production
and procreation of a biological asset
d. Is the management by an entity of biological transformation
of biological asset into agricultural produce or additional
biological asset
9. All of the following items are classified as biological
assets, except
a. Dairy cattle
b. Chickens
c. Eggs
d. Trees
10. Biological assets are measured at
a. cost.
b. lower of cost and net realizable value.
c. net realizable value.
d. fair value less cost of disposal.
11. Agricultural produce is harvested product of biological
asset and measured at
a. fair value.
b. fair value less cost of disposal at the point of harvest.
c. net realizable value.
d. net realizable value less normal profit margin.
12. The costs to sell of biologic al assets and agricultural
produce include all of the following, except
a. Commissions to brokers and dealers
b. Levies by regulatory agencies
c. Transfer taxes and duties
d. Transport costs
13. In rare circumstances where the fair value cannot be
determined reliably, the biological asset shall be measured at
a. Cost.
b. Cost less accumulated depreciation.
c. Cost
less
accumulated
impairment losses.
d. Net realizable value.
depreciation
and
accumulated
14. A gain or loss arising on the initial recognition of
biological asset and from a change in fair value less cost of
disposal of a biological asset shall be included in
a. The profit or loss for the period.
b. Other comprehensive income.
c. A separate revaluation reserve.
d. A general reserve.
15. When agricultural produce is harvested, the harvest should
be accounted for as “inventory”. For this purpose, the initial
cost of the inventory is
a. Fair value less cost of disposal at the point of harvest
b. Historical cost of the harvest
c. Historical cost less impairment
d. Market value
16. Land that is related to agricultural activity is measured
a. At fair value
b. At fair value in combination with the biological asset that
is being grown on the land.
c. At the resale value separate from the biological asset that
is being grown on the land.
d. In accordance with PAS 16 Property, plant and equipment or
PAS 40 Investment property.
END