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Cfas quiz bs accountancy
Accountancy (University of Northern Philippines)
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Problem 21-7 Multiple choice (PAS 40)
1. Which statement best describes investment property?
a.
b.
Property held for sale in the ordinary course of business
c.
Property held to earn rentals or for capital appreciation
Property held for use in the production and supply of goods and property held
for administrative purposes
d. Property held for capital appreciation
2. An owner-occupied property is held by an owner
A. For use in the production of goods or services.
b.
c.
d.
3.
For administrative purposes.
For sale in the ordinary course of business.
For use in production of goods and services and for administrative purposes.
Investment property includes all of the following, except
a.
Land held for capital appreciation
b. Land held for currently undetermined use
c. Building owned by the reporting entity leased out under an operating lease
d. Property held for sale in the ordinary course of business
4.
Which of the following is an investment property?
a.
Property being constructed or developed on behalf of third party
b. Property that is being constructed and developed as Investment property
5.
c.
Property held for future development and subsequent use as owner-occupied
property
d.
Owner-occupied property awaiting disposal
An investment property shall be measured initially at
a.
b.
c.
d.
Cost
Cost legs impairment
Depreciable amount less impairment
Fair value less impairment
6, which statement is true if the property is partly investment and partly owneroccupied?
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I. If the investment and owner-occupied portions could be sold or leased out
separately, the portions shall be accounted for separately as investment
property and owner-occupied property.
Il. If the investment and owner-occupied portions could not be sold or leased out
separately, the property is investment property if only an insignificant portion
is held for manufacturing or administrative purposes.
a. I only
b. Il only
c. Both 1 and 11
d. Neither I nor II
7. If an entity owns and manages a hotel, services provided to guests are a significant
component of the arrangement as a whole. In such a case, the hotel is classified
as
a. Investment property
b.
Owner-occupied property
c. Partly investment property and partly owner-occupied property d. Neither
investment property nor owner-occupied property
8. Directly attributable expenditures related to investment property include
a. Professional fees for legal services, property transfer taxes and other
transaction cost.
b. Start up costs
c.
d.
Initial operating loss incurred before the investment property achieves the
planned level of occupancy.
Abnormal amount of wasted material, labor and other resources incurred in
constructing or developing the property
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9. Which statement is true concerning property leased to an affiliate?
1. From the perspective of the individual entity that owns it, the property
leased to an amate is considered an investment property.
Il. From the perspective of the affiliates as a group and for purposes of
consolidated financial statements, the property is treated as owneroccupied property.
a. Both 1 and 11
b. Neither I nor Il
c. I only
d. 11 only
9. Which statement is incorrect in determining the fair value of an investment
property?
a. An entity shall determine the fair value of investment property by
deducting transaction cost that may be incurred upon disposal
b. The fair Value of investment property shall reflect market conditions at
the end of the reporting period.
C, if an Office is leased on a furnished basis, the fair value of the office
generally includes the fair value of the furniture because the rental
income relates to the furnished office.
d. The fair value of investment property excludes prepaid or accrued
operating lease income.
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Problem 21-8 Multiple choice (IFRS)
1.
Subsequent to initial recognition, the investment
Shall be measured using
a.
b.
Fair value model or revaluation model
Fair value through profit or loss model
c. Cost model or fair value model
d. Cost model or revaluation model
2.
If the entity uses the fair value model for the investment property, changes in fair
value are
a.
b.
c.
d.
3.
Recognized in retained earnings
Recognized in other comprehensive income
Not recognized
If the entity uses the fair value model for investment property, which statement is
true?
a. The entity should value the property at cost less accumulated depreciation
and impairment.
-b. The entity should report the increase in fair value in other comprehensive
income for the period.
c.
d.
4.
Recognized in profit or loss
The entity depreciates the investment property.
The entity does not record depreciation.
Transfers from investment property to property, plant and equipment are
appropriate
a.
b.
c.
d.
When there is change of use.
Based on the discretion of management.
Only when the entity adopts the fair value model.
The entity can never transfer property into another
classification once it is classified as investment property
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5. Under IFRS, assets classified as investment property are
a. Held for rental income
b. To be sold for a quick profit
c. Held for rental income or to be sold for a quick profit
d. Held for sale in the ordinary course of business
6. Which statement regarding investment property is correct?
a. If the entity elects the fair value model, no depreciation is taken.
b. Gain or loss from fair value adjustment is reported in the income
statement.
c. If the entity elects the cost model, depreciation should be recognized.
D. All of these statements are correct regarding investment property
7.
An investment property is derecognized when
a. It is disposed to a third party.
b. It is permanently withdrawn from use.
c. No future economic benefits are expected from the disposal.
d. In all of these cases
8.
Gain or loss from disposal of investment property shall be determined as
the difference between the
a. Net disposal proceeds and carrying amount.
b. Gross disposal proceeds and carrying amount.
c. Fair value and carrying amount of the asset.
d.
Gross disposal proceeds and fair value of the asset.
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9. Which disclosure must be made when the cost model is used for investment property
A. The fair value of the property
b. The present value of the property
c. The value in use of the property
d. The net realizable value of the property
10. Which of the following disclosures shall be made when the fair value model has been adopted?
a.
Depreciation method used
b. The amount of impairment loss recognized
c. Useful life
d. Net gains or losses from fair value adjustments
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Problem 21-9 Multiple choice (PAS 40)
1.
When the entity uses the cost model, transfers between investment
property, owner-occupied property and inventory shall be made at
a.
Fair value
B. Carrying amount
c.
d.
Cost
Assessed value
2. A transfer from investment property carried at fair value to owneroccupied property shall be accounted for at
A. Fair value which becomes the deemed cost
b.
c.
d.
3.
Carrying amount
Historical cost
Fair value less cost of disposal
If owner-occupied property is transferred to investment property that is to
be carried at fair value, the difference between the carrying amount and
fair value shall be
a.
b.
c.
Included in profit or loss
Included in retained earnings
Included in other Comprehensive income
d. Accounted for as revaluation of property
4.
If an inventory is transferred to investment-property to be
carried at fair value, the remeasurement to fair value is
A. Included in profit or loss
B. Included in other comprehensive income
c.
d.
5.
Included in retained earnings
Accounted for as revaluation surplus
When an investment property under construction is completed and carried
at fair value, the difference between the carrying amount and fair value shall
be
A. Included in profit or loss
b.
c.
Included in retained earnings
Included in other comprehensive income
d. Accounted for as revaluation of property
Problem 32-4 Multiple choice (PFRS 5)
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1.
It is group of assets to be disposed of by sale or otherwise, together
as a group in a single transaction, a directly associated with those assets
that will be in the transaction.
a.
Disposal group
b.
Discontinued operation
c. Noncurrent asset
d.
2.
Cash generating unit
An entity shall classify a noncurrent asset or disposal as held for sale
when
A. The carrying amount or disposal group is recovered through a
sale transaction.
B.
The carrying amount of the asset or disposal group is
recovered through continuing use.
c.
The noncurrent asset or disposal group is abandoned.
d. The noncurrent asset or disposal group is idle or retired from active use.
3. For the sale of a noncurrent asset to be highly probable which of the
following statements is incorrect?
a.
Management must be committed to a plan to sell the
Asset.
b.
An active program to locate a buyer and complete the plan
must have been initiated.
c.
The asset must be actively marketed for sale at a reasonable
price in relation to the current fair value.
d.
The sale is expected to qualify for recognition as a completed
sale within two years from the date of classification of the asset as
held for sale.
4. An entity shall measure a noncurrent asset or disposal group
classified as held for sale at
a. Carrying amount
b. Fair value less cost of disposal c. Lower of carrying amount and fair value
less cost of disposal.
D. Higher of carrying amount and fair value less cost of disposal.
5.
Noncurrent asset classified as held for sale shall be presented as
A. Current asset
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B. Other noncurrent as8et
C. Noncurrent investment
D. Property, plant and equipment
6. If the fair value less cost of disposal is lower than the carrying amount of
noncurrent asset classified as held for sale, the difference is
A. Not accounted for.
b. Accounted for as an impairment loss.
C. Charged to depreciation.
d. Debited to retained earnings.
7. What is the treatment of any gain on a subsequent increase in the fair
value less cost of disposal of a noncurrent asset classified as held for sale?
A. The gain shall be recognized in full.
b. Gain shall not be recognized.
c. the gain shall be recognized but not in excess of
The cumulative impairment loss previously recognized.
d. The gain shall be recognized but only in retained earnings.
8. A noncurrent asset that is to be abandoned shall) not be classified as held for
sale because
a. The carrying amount is recovered principally through continuing use.
B. It is difficult to value
c. It is unlikely that the noncurrent asset is sold within twelve months.
d. It is unlikely that there is an active market for the noncurrent asset.
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9. How should the assets and liabilities of a disposal classified as held for sale be
reported in the statement of financial position
A. The assets and liabilities shall be offset and presented as a single amount
B. The assets of the disposal group shall be reported separately under current
assets and the liabilities of the disposal group shall be reported separately
under current liabilities
c.
The assets and liabilities shall be presented as a single amount and as
a deduction from equity.
d.
There should be no separate disclosure of assets and liabilities that
form part of a disposal group.
10. An entity classified a noncurrent asset accounted for under the cost model
as held for sale at the current year-end. Because no offers were received at an
acceptable price, the entity decided at the end of next year not to sell the asset but
to continue to use it.
The asset shall be measured at the end of next year at what amount?
a. The lower of carrying amount and recoverable amount
b. The higher of carrying amount and recoverable amount
c.
The lower of carrying amount on at the basis that the asset had never
been classified as held for sale and recoverable amount
d.
carrying amount on the basis that the asset had never been classified
as held for sale and recoverable amount
Problem 34-5 Multiple choice (IFRS)
1.
Exploration and evaluation expenditures are incurred
a. When searching for an area that may warrant detailed exploration even though
the entity has not yet obtained the legal rights to explore a specific area.
b. When the legal right to explore a specific area has been obtained but the
technical feasibility and commercial viability of extracting a mineral resource are
not yet demonstrable.
c.
When a specific area is being developed and preparation8 for
commercial extraction are being made.
d.
In extracting mineral resource and processing the resource to make it
marketable or transportable.
2.
When is an entity required to recognize exploration and evaluation
expenditure as an asset?
a. When such expenditure is recoverable in future periods.
b. When the technical feasibility and commercial viability of extracting the
associated mineral resource have been demonstrated.
When required by the entity’s accounting policy for recognizing
exploration and evaluation asset
d. Such expenditure is always expensed as Incurred.
c.
3.
Which of the following expenditures would never qualify as an exploration,
and evaluation asset?
a. Expenditure for acquisition of right to explore
b. Expenditure for exploratory drilling
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C.
Expenditures
related
to
the
development
of
mineral
resource
d. Expenditures for activities in relation to evaluating the technical feasibility
and commercial viability of extracting a mineral resource
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4.
Which measurement model applies to exploration and evaluation
asset subsequent to initial recognition?
Cost model
b.
Revaluation model
C. Cost model and revaluation model
C. Recoverable amount model
5.
Which type of expenditure is included in exploration and
evaluation of mineral resources?
The extraction and processing of mineral resource for transport to
market.
b.
The commercial review of possible areas for mineral extraction
before bidding for the legal right to explore a specific area.
c. The expenditure incurred after the technical feasibility and commercial
viability of extracting a mineral resource are demonstrable.
d. None of these should be included in exploration and evaluation
expenditures.
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