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CFAS chapter 1 problem 1-3 to 1-6

Problem 1-3 Multiple choice (ACP)
1. What is the standard-setting body in the Philippines at the present time?
a. Accounting Standards Council
b. Auditing and Assurance Standards Council
c. Philippine Accounting Standards Board
d. Financial Reporting Standards Council
2. All of the following are represented in FRSC, except
a. Board of Accountancy
b. Securities and Exchange Commission
c. Commission on Audit
d. Department of Budget and Management
3. The Philippine Financial Reporting Standards collectively include
a. PFRS corresponding to IFRS.
b. PAS corresponding to IAS
c. Philippine Interpretations corresponding to IFRIC and SIC Interpretations and
Interpretations developed by PIC.
d. All of these are included in Philippine Financial Reporting Standards
4. Accounting standard-setting has been characterized as
a. A political process
b. Using the scientific method
c. Pure deductive reasoning
d. A legal process
5. GAAP is an abbreviation for
a. Generally authorized accounting procedures
b. Generally applied accounting procedures
c. Generally accepted auditing practices
d. Generally accepted accounting principles
6. What is the primary service of CPAs in public practice?
a. Auditing
b. Taxation
c. Managerial accounting
d. Controllership
7. Accountants employed in entities in various capacity as accounting staff, chief
accountant or controller are said to be engaged in
a. Public accounting
b. Private accounting
c. Government accounting
d. Financial accounting
8. It is the area of the accountancy profession that encompasses the process of
analyzing, classifying, summarizing and communicating all transactions involving the
receipt and disposition of government funds and property and interpreting the results
a. In ernal auditing
b. External auditing
c. Private accounting
d. Government accounting
9. How many CPD credit units are required for accreditation to practice the
a. 120 units
b. 100 units
C. 60 units
d. 15 units
10. A CPA shall be permanently exempted from renewal of CPA license
a. At the age of 65 years
b. When working abroad
c. When practicing the profession abroad
d. When studying abroad
Problem 1-4 MCQ (IFRS)
1. The International Accounting Standards was formed
a. To enforce IFRS in foreign countries
b. To develop a single set of high quality IFRS
c. To establish accounting standards for multinational entities
d. To develop accounting standards for countries that do not have their own standardsetting bodies
2. The International Accounting Standards Board
a. Was the predecessor to the IASC.
b. Can overrule the USA GAAP when their policies disagree.
c. Promotes the use of high-quality and understandable global accounting standards.
d. Has its headquarters in Geneva.
3. The IASB declared that the merits of proposed standards are assessed
a. From a position of neutrality
b. From a position of materiality
c. Based on possible impact on behavior
d. Based on arguments of lobbyist
4. The standard-setting process includes in the correct order
a. Exposure draft, research, discussion paper and accounting standard
b. Research, exposure draft, discussion paper and accounting standard
c. Research, discussion paper, exposure draft and accounting standard
d. Discussion paper, research, exposure draft and accounting standard
5. The IASB employs a due process system which
a. Is an efficient system for collecting dues from members.
b. Enables interested parties to express their views on issues under consideration.
c. Identifies the accounting issues that are the most important.
d. Requires that all CPAs must receive a copy of IFRS.
6. What is the due process in standard-setting by IASB?
a. IASB operates in full view of the public.
b. Public hearings are held on proposed standards.
c. Interested parties can make their views known.
d. All of these are part of due process in standard-setting
7. The standards published by IASB are called
a. International Accounting Standards
b. Financial Reporting Standards
c. International Financial Reporting Standards
d. Statement of Financial Accounting Standards
8. What is the possible danger if politics plays too big a role in developing IFRS?
a. Financial reporting standards are not truly generally accepted.
b. Individuals may influence the standards.
c. User groups become active.
d. The IASB delegates its authority to elected officials.
9. Accounting standard-setting
a. Can be described as a political process which reflects political actions of various
interested user groups as well as a product of research and logic.
b. Is based solely on research and logic.
c. Is a legalistic process.
d. Is democratic in the sense that a majority of accountants must agree with a
standard before it becomes enforceable.
10. IFRIC Interpretations issued by IASB
a. Are considered authoritative and must be followed.
b. Cover newly identified financial reporting issues not specifically addressed.
c. Cover issues where unsatisfactory or conflicting interpretations have developed.
d. All of these are true about IFRIC Interpretations.
Problem 1-5 Multiple choice (IAA)
1. Financial accounting is concerned with
a. General purpose reports on financial position and financial performance.
b. Special reports for inventory management.
c. Special reports for income tax computation.
d. d. General purpose reports on changes in share prices.
2. Financial accounting can be broadly defined as the area of accounting that prepares
a. General purpose financial statements to be used by parties internal to the entity.
b. Financial statements to be used by investors.
c. General purpose financial statements to be used by parties both internal and
external to the entity.
d. Financial statements to be used primarily by management.
3. Financial accounting emphasizes reporting to
Regulatory bodies
Internal auditors
Creditors and investors
4. Managerial accounting emphasizes
a. Reporting financial information to external users
b. Reporting to the SEC
c. Expertise in data processing
d. Developing accounting information for use within an entity
5. Which statement is true regarding managerial and financial accounting?
a. Managerial accounting is generally more precise.
b. Managerial accounting need not follow generally accepted accounting principles
while financial accounting must follow GAAP.
c. Managerial accounting has a future focus.
d. The emphasis on managerial accounting is relevance and the emphasis on
financial accounting is timeliness.
Problem 1-6 Multiple choice (IAA)
1. Generally accepted accounting principles
a. Are accounting adaptations based on law.
b. Derive their credibility and authority from leg rulings and court precedents.
c. Derive their credibility and authority from government regulatory authority
d. Derive their credibility and authority from general recognition and acceptance by
the accountancy profession.
2. Which statement best describes GAAP?
a. The accounting principles have been formulated in the public sector.
b. The accounting principles have been developed on the basis of such factors as
usage and practical necessity.
c. The accounting principles are the same as laws.
d. The accounting principles do not apply to small and medium-sized entities.
3. Proper application of accounting principles is most dependent upon the:
a. existence of specific guidelines.
b. oversight of regulatory bodies.
c. external audit function.
d. professional judgment of the accountant.
4. Once an accounting standard is established.
A. The standard is continually reviewed to see if modification is necessary
B. The standard is not reviewed, unless SEC makes complaint
C. The task of reviewing the standards to see if modification is necessary is given to
D. The principle of consistency states that no revision should ever be made to the
5. The primary responsibility for properly applying GAAP lies with
a. External auditor
b. Internal auditor
c. Management
d. . National accounting organization