CFAS FINALS REVIEWER Page 1
PAS 32 (Financial Instruments; Presentation)
Determine whether it is true or false.
I. Financial liability is the entity has no obligation to pay cash or
another financial asset or to exchange financial instruments under
potentially unfavorable condition.
II. Equity instrument is the entity has a contractual obligation to pay
cash or another financial asset or to exchange financial instruments
under potentially unfavorable condition.
a.
Both are true
b.
I is true and II is false
c.
I is false while II is true
d.
Both are false
Which cannot be considered a financial asset?
a.
Cash
b.
A contractual right to receive cash or another financial
asset from another entity.
c.
A contractual right to exchange financial instruments
with another entity under conditions that are potentially
unfavorable.
d.
An equity instrument of another entity
Financial liability - is any liability that is:
a. A contractual obligation to exchange financial assets
or financial liabilities with another entity under conditions
that are potentially favorable to the entity
b. A contractual obligation to deliver cash or another
financial asset to another entity.
c. A contract that will or may be settled in the entity's
own equity instruments and is classified as the entity's
own equity instrument.
d. None of the above.
On December 31, 2020, and 2019, TLC Company had 100,000
ordinary shares and 10,000 cumulative preference shares of 5%, P100
par value. No dividends were declared on either the preference or
ordinary shares in 2020 or 2019. Net income for the current year was
P900,000. What amount should be reported as basic earnings per
share?
a.
8.5
b.
10
c.
9.50
d.
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This instrument is any contract that evidences a residual interest in
the assets of an entity after deducting all of its liabilities.
a. Financial Instruments
b. Equity Instrument
c. Financial Liability
d. Puttable Instrument
It is a computation made for ordinary shares. It is a form of
profitability ratio which represents how much was earned by each
ordinary share during the period.
a. Diluted earnings per share
b.
Basic earnings per share
c.
Restatement per share
d.
Earnings per share
What is a Non-Financial Asset?
a. Cash
b. Receivables
c. Sinking Fund
d. Physical Asset
It is known as an entity’s own shares that were previously issued but
were subsequently reacquired but not retired.
A. Redeemable Preference Shares
B. Callable Preference Shares
C. Ordinary Shares
D. Treasury Shares
Are presented either in the statement of financial position or in the
notes as a deduction from equity.
a. Purchase
b. Share
c. Separately
d. Directly
Which of the following is within the scope of PAS 32?
a. Assets held for sale in the ordinary course of business
b. Contracts relating to employee benefits
c. Financial instruments that are within the scope of PFRS
9
d. Investments in associates and joint ventures
Which of the following is not a non-financial asset?
a. Physical assets
b. Intangible assets
c. Prepaid expenses and advances to suppliers
d. Cash
Which of the following is within the scope of PAS 32?
a.
Financial assets in the form of investments in subsidiaries,
associates and joint ventures.
b.
Contracts for the delivery or receipt of commodity and
other non-financial items that can be settled net in cash
or other financial assets.
c.
Physical assets, such as inventories and PPE.
d.
Liabilities arising from constructive obligations.
Which of the following is a key objective of PAS 32?
a) Standardizing revenue recognition practices
b) Ensuring transparency in financial reporting
c) Providing guidelines for employee benefits
d) Regulating property, plant, and equipment
Which of the following statements are correct?
Statement 1: Deferred revenue and warranty obligations are
financial liabilities because the outflow of the economic benefits is
the delivery of goods and services rather than a contractual
obligation to pay cash.
Statement 2: a preference share that gives the holder the right to
require the issuer to redeem the instrument at a particular date for a
fixed or determinable amount is also a financial liability because the
issuer has a contractual obligation to pay cash at some future time.
a. Only statement 1 is true.
b. Only statement 2 is true
c. Both a and b are true.
d. Neither a or b
PAS 33 (Earnings Per Share)
How should preference shares that are redeemable mandatorily be
presented in the statement of financial position?
a. Noncurrent financial liability
b. Current financial liability
c. Equity
d. Either current or noncurrent financial liability
depending on redemption date
PAS 33 requires the following two presentations of PPS:
a.
classified, unclassified
b.
Basic earnings per share, Diluted earnings per share
c.
Cash and cash equivalents
d.
Outstanding share
Entity A had 100,000 ₱10 par, 10% cumulative preference shares
outstanding all throughout 20x1. Entity A reported profit after tax of
₱1,200,000 for the year ended December 31, 20x1. The movements
in the number of ordinary shares are as follows:
1/1/20x1 Ordinary shares outstanding 120,000
3/1/20x1 Shares issued for cash 42,000
9/30/20x1 Subscribed shares 20,000
11/1/20x1 Reacquisition of treasury shares (12,000)
Outstanding shares at the end of period 170,000
What is the basic earnings per share?
a. 5.92
b. 6.96
c. 7.09
d. 6.13
PAS 33 is intended to apply in which of the following?
a.
Publicly-listed entities
b.
Non-publicly listed entities
c.
Financial institutions
d.
All entities using the PFRSs
PAS 33 requires which of the following presentations of earning per
share?
I. Basic earnings per share
II. Diluted earnings per share
III. Retained earnings per share
IV. Book value earnings per share
A. I and II
B. I, II, and III
C. I, II, III, and IV
D. I and III
Earnings per share (EPS) are calculated by dividing:
a) Net profit after tax by total equity
b) Net profit after tax by the weighted average number
of ordinary shares outstanding
c) Net profit before tax by total assets
d) Net profit before tax by the weighted average
number of ordinary shares outstanding
These are examples of potential ordinary shares except one
a. Convertible preference share
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b. Preference Dividend
c. Convertible bonds
d. Options, warrants and their equivalents
When computing for diluted earnings per share, the __________ shall
be used in computing for the incremental shares.
a. Earnings per Share
b. Diluted Earnings per Share
c. Treasury Share Method
d. Income Method
It is a form of profitability ratio which represents how much was
earned by each ordinary share during the period.
a. Earnings per share (EPS)
b. Earnings per minute (EPM)
c. Earnings per person (EPP)
d. Earnings per day (EPD)
Is the amount of profit for the period per share, reflecting the
maximum dilutions that would have resulted from conversions,
exercises, and other contingent issuances.
a.Profit period
b. Basic earning per share
c. Dilute earnings per share
d. None of the above
The is assumed to have taken place on the date the potential
ordinary shares became outstanding.
a.Date
b. Outstanding
c. Ordinary shares
d. Conversion
When shall ordinary shares issued as a result of the conversion of a
debt instrument to ordinary shares be included in the weighted
average number of shares?
a. The date when interest ceases to accrue.
b. The date when dividends are reinvested.
c. The date when cash is receivable.
d. A or B, whatever comes first.
How shall an entity calculate the basic earnings per share?
a. By dividing the weighted average number of ordinary
shares outstanding during the period by profit or loss
attributable to ordinary equity holders of the parent
entity.
b. By dividing profit or loss attributable to ordinary equity
holders of the parent entity by the weighted average
number of ordinary shares outstanding at the end of the
reporting period.
c. By dividing profit or loss attributable to ordinary equity
holders of the parent entity by the weighted average
number of ordinary shares outstanding during the period.
d. By dividing the weighted average number of ordinary
shares outstanding at the end of the reporting period by
profit or loss attributable to ordinary equity holders of the
parent entity.
How Basic and Diluted earnings per share are computed?
I. profit or loss from continuing operations
II. profit or loss for the year
III. profit or loss for the month
IV. profit or loss from discontinued operations if the entity reports a
discontinued operation.
V. profit or loss from discontinued operations if the entity reports a
continuing operation.
a. I, III, IV
b. II, V,
c. I, II, IV
d. II, III, IV, V
Where share dividends or share splits create a change in the capital
structure, the increase or decrease in the number of shares shall be
recognized as;
a. Contemplative
b. Retrospectively
c. Retroactively
d. Proactively
PAS 34 (Interim Financial Reporting)
Pertains to the preparation and presentation of interim financial
reports for an interim period.
a.
Interim financial report
b.
Interim reporting
c.
Interim period
d.
None of the above
Define materiality
a.
Materiality judgment on recognition, classification, and
disclosure of items in the interim financial report are
assessed in relation to the interim financial period data,
and not forecasted annual data.
b.
Materiality judgment on recognition and disclosure of
items in the interim financial report are assessed in
relation to the interim financial period data, and not
forecasted annual data.
c.
Materiality judgment on recognition and disclosure of
items in the interim financial report are assessed in
relation
d.
All of the above
The following are examples of the kinds of disclosures required by
PAS 34
except
a.
The write-down of inventories to a net realizable value
and the reversal of such a write-down.
b.
Recognition of a loss from the impairment of property,
plant and equipment, intangible assets, or other assets,
and the reversal of such an impairment loss.
c.
acquisition and disposal of items of property, plant, and
equipment.
d.
corrections of prior period errors
e.
extraordinary items.
What is an Accounting Standard that encourages publicly traded
entities to provide at least semi-annual interim financial reports and
publish them not later than 60 days after the end of the interim
period?
A. PAS 32
B. PAS 33
C. PAS 34
D. PAS 36
Interim financial reports shall be published
a. Once a year
b. Within a month of the half year-end
c. On a quarterly basis
d. Whenever the entity wishes
If an entity does not prepare interim financial reports,
a.
Its annual financial statements would not conform to the
PFRSs.
b.
Its annual financial statements should not be described
to have been prepared in accordance with PFRSs
c.
The conformance of its annual financial statements with
the PFRSs is not affected.
d.
Both A and B
Interim financial reports should include which of the following
components?
a) Only balance sheet and income statement
b) Balance sheet, income statement, and cash flow
statement
c) Balance sheet, income statement, cash flow
statement, and statement of changes in equity
d) Only cash flow statement
How is income tax expense for the third quarter interim period
computed?
a. the annual rate multiplied by the third quarter income
b. the estimated tax for the first three quarters based on
an annual rate less a similar estimate for the first two
quarters
c. the rate applicable during the third quarter multiplied
by three
d. cumulative income tax for three quarters
Which of the statements below is true about the scope of PAS 34?
a. PAS 34 does not require entities to provide interim
financial reports.
b. PAS 34 applies if an entity is required by government,
securities regulators, stock exchanges, and accountancy
bodies or the entity elects or chooses to publish an
interim financial report in accordance with PFRSs.
c. PAS 34 encourages publicly traded entities to provide
at least semi-annual interim financial report and publish
them not later than 60 days after the end of the interim
period.
d. All of the statements are true.
PAS 34 _______ publicly entities to provide at least semi-annual
interim financial reports and publish them not later than 60 days
after the end of the interim period.
a. made
b. should
c. encourages
d. use
This recognition and measurement benefit the entire year or are
incurred (earned) over the year and are spread out over the interim
period.
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a. Cost and Expenses (income)
b. Gain and Losses
c. Recognition and Measurement
d. Interest Period
What view on interim reporting is considered as a discrete ('standalone') accounting period?
a. Integral View
b. Materiality
c. Other Disclosures
d. Discrete Views
It is intended to provide an update on the latest complete set of
annual financial statements.
a. interim reports
b. financial reports
c. annual reports
d. a and b
What PAS 34 encourages if an entity’s business is highly seasonal?
a. If an entity’s business is highly seasonal, PAS 34
encourages disclosure of financial information for the
latest 12 months and comparative information for the
prior 12-month period in addition to the interim period
financial statements.
b. If an entity’s business is highly seasonal, PAS 34
encourages disclosure of financial position for the latest
12 months and comparative income for the prior 12month period in addition to the interim period financial
statements.
c. If an entity’s business is highly seasonal, PAS 34
encourages disclosure of financial position for the latest 6
months and comparative income for the prior 6-month
period in addition to the interim period financial
statements.
d. b
Which of the following components is not included in providing an
interim financial report?
a. Condensed statement of financial position
b. Condensed statement of comprehensive income
c. Selected explanatory notes
d. Condensed notes to financial statements
PAS 36 (Impairment of Assets)
It is impaired if its carrying amount exceeds its recoverable amount
a.
Liability
b.
Equity
c.
Asset
d.
Capital
Which of the following terms does this statement define: “the
amount by which the carrying amount of an asset or a cashgenerating unit exceeds its recoverable amount?
a.
Impairment loss
b.
Depreciation
c.
Value in use
d.
Fair value
The impairment loss is recognized in profit or loss and presented
separately in which of the following?
a.
Statement of Financial Position
b.
Income Statement
c.
Cash flows
d.
a and b
It is known that an entity is not required to estimate the recoverable
asset if there's no indication. Among the following below, Which is
not an indication that an asset is impaired?
a. The carrying amount of net assets is lower than its
market capitalization.
b. Decline in the asset's value more than what is
expected as a result of passage of time of normal use of
it.
c. Showing significant changes in technological, market,
economic or legal environment in the market to which
an asset is dedicated.
d. Discontinuance, Disposal or restructuring plans which
affect the use of asset.
Which of the following terms best describes the higher of an assets’
fair value less costs of disposal and its value in use?
A. Revalued amount
B. Recoverable amount
C. Carrying amount
D. Depreciate amount
Publicly traded entities are encouraged to provide interim financial
reports
a. At least at the end of the half-year and within 60 days
of the end of the interim period
b. Within a month of the half year-end
c. On a quarterly basis
d. Whenever the entity wishes
External sources of information indicating that an asset may be
impaired includes:
a.
Worse economic performance than expected
b.
An asset is idle, part of a restructuring, or held for disposal
c.
Obsolescence or physically damaged
d.
The carrying amount of the net assets of the entity is
more than its market capitalization
Which of the following terms best describes the higher of an assets’
fair value less costs of disposal and its value in use?
A. Revalued amount
B. Recoverable amount
C. Carrying amount
D. Depreciate amount
Which of the following asset is not within the scope of PAS 36,
Impairment of Assets?
a.
Building
b.
Patents
c.
Inventories
d.
Exploration and evaluation assets
How should an entity determine the recoverable amount of an asset
under PAS 36?
a) By estimating its market value.
b) By comparing it to the asset's historical cost.
c) By calculating its replacement cost.
d) By assessing its fair value less costs to sell or value in
use.
A fall in the market value of an asset so that the recoverable
amount is now less than the carrying amount in the statement of
financial position
a. Impairment
b. Carrying amount
c. Recoverable amount
d. Value in use
It is the present value of the future net cash flows expected to be
derived from the continuing use of an asset and from its disposal at
the end of its useful value.
a. Value in use
b. Cash flow
c. Fair value
d. Non-current assets
What are the assets that contribute to the future cash flows of
several departments?
a. Fixed Assets
b. Intangible assets
c. Corporate Assets
d. Current Assets
It is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market
participants at the measurement date.
a. carrying amount
b. cost of disposal
c. fair value
d. value in use
The level of testing for goodwill impairment is.
a. Reporting entity
b. Subsidiary entity
c. Cash generating unit.
d. Product line
Is recognized immediately in profit or loss, unless the asset is carried
at a revalued amount, in which case, revaluation surplus is
decreased first and any excess is recognized in the other
comprehensive income.
a. Discount Rate
b. Impairment Loss
c. Value in Use
d. None of the above
PAS 37 (Provisions, Contingent Liabilities and Contingent Assets)
A liability of uncertain timing or amount.
a.
Present obligation
b.
Recognition
c.
Past events
d.
Provisions
With regards to PAS 37, which of the following is/are incorrect?
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I. “Probable" means more than 50% likely to occur.
II. "Remote" means 20% likely to occur.
III. "Possible" means 50% or less likely to occur.
IV. "Remote" means 10% or less likely to occur or very slight
occurrence.
a.
II only
b.
IV only
c.
III and IV
d.
All of these are correct.
In PAS 37, which is not accrued in the statement of financial position.
a. Provision
b. Contingent Asset
c. Contingent Liability
d. Both B and C
A provision should be recognized when _________.
A. An enterprise has a present obligation as a result of a
past event.
B. It is probable that an outflow of will be required to
settle an obligation.
C. A reliable estimate can be made of the amount of
the obligation.
D. All of the above.
Which statement is incorrect where the expenditure required to
settle a provision is expected to be reimbursed by another party?
a. In the income statement, the expense relating to the
provision may be presented net of the reimbursement.
b. The reimbursement shall not be treated as a separate
asset but "netted" against the estimated liability for the
provision.
c. The amount of the reimbursement shall not exceed
the amount of the provision.
d. The reimbursement shall be recognized only when it is
virtually certain that the reimbursement would be
received if the entity settles the obligation.
A liability of uncertain timing or uncertain amount.
a.
Past event
b.
Loss Contingency
c.
Provision
d.
Future Event
A provision should be recognized when _________.
A. An enterprise has a present obligation as a result of a
past event.
B. It is probable that an outflow of will be required to
settle an obligation.
C. A reliable estimate can be made of the amount of
the obligation.
D. All of the above.
Provision is a liability of an uncertain timing or amount that meets all
of the following conditions
except:
a) Possible obligation
b) Present obligation
c) Probable outflow
d) Reliably estimated
Under PAS 37, Contingent Assets are those that are not recognized
because they do not meet all of the asset recognition criteria i.e.:
I. Resource controlled arising from past events
II. Probable inflow
III. Possible obligation
IV. Reliable estimation
a. I, II, and III
b. I, II, and IV
c. II, III, and IV
d. I and II only
According to PAS 37, a present obligation that is possible and can
be measured reliably is
a. Recognized
b. Recognized and disclosed
c. Disclosed only
d. Ignored
It is normally recognized as a debit to expense (or loss) and a credit
to an estimated liability account.
a. Provisions
b. Expected Value
c. Operating Losses
d. Sales
What term does PAS 37 use in referring to liabilities and assets that
are not recognized?
a. contingent
b. provision
c. liability
d. intangible
Contingent liability will or will not be recognized as a provision
(liability) depending on the?
a.
The degree of uncertainty
b.
The outcome of a future event
c.
Whether they are probable and estimable
d.
The present condition suggesting a liability.
According to PAS 37, a provision is
a. A present obligation that cannot be measured reliably
b. A possible obligation that arises from past events.
c. A liability of uncertain timing or amount.
d. A reliable estimate can be made of the amount of the
obligation
PAS 38 ( Intangible Assets )
An identifiable non monetary assets without physical substance
a.
Recognition
b.
Financial statements
c.
Intangible assets
d.
Cash flow
The useful life of an intangible asset must be assessed as
a.
Indefinite
b.
Finite
c.
Either a or b
d.
None of the above
Which is an essential criteria of intangible assets?
1. Identifiability
2. Verifiability
3. Comparability
4. Control
5. Future economic benefits
6. Understandability
a. 1,4,5
b. 1,2
c. 4,5,6
d. 1,3
An intangible asset is regarded as having an indefinite useful life
when:
A. There is a foreseeable limit to the period over which
the asset is expected to generate net cash inflows to the
entity.
B. There is no foreseeable limit to the period over which
the asset is expected to generate net cash inflows to the
entity.
C. The useful life of the intangible asset from contractual
right.
D. The useful life of the intangible asset arises from legal
right.
The Cost of a separately acquired intangible asset comprises the
purchase price, including import duties and non refundable
purchase taxes, and
a. Cost of introducing a new product or service
b. Cost of conducting a business in a new location
c. Administration and other general overhead cost
d. Directly attributable cost of preparing the asset for the
intended use
Which of the following is a characteristic of an intangible asset?
a.
Long-lived
b.
Claim to a specific amount of cash in the future
c.
Held for resale
d.
Physical existence
An intangible asset is regarded as having an indefinite useful life
when:
A. There is a foreseeable limit to the period over which
the asset is expected to generate net cash inflows to the
entity.
B. There is no foreseeable limit to the period over which
the asset is expected to generate net cash inflows to the
entity.
C. The useful life of the intangible asset from contractual
right.
D. The useful life of the intangible asset arises from legal
right.
Which of the following is an essential element of an intangible asset?
a) Control
b) Future economic benefits
c) Identifiability
d) All of the above
Which of the following statements are true?
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I. Intangible assets are initially measured at cost.
II. Reinstatement of costs already expensed is prohibited.
III. If it is not clear whether an expenditure is a research or a
development cost, it is treated as a research cost.
a. I, II, and III
b. I and II
c. II and III
d. I and III
Which of the following does not describe an intangible asset?
a. Lacks physical existence
b. Monetary
c. Provides long-term benefit
d. Classified as noncurrent
All of the following are essential elements of an intangible asset
except:
a. Identifiability
b. Control
c. Monetary
d. Future Economic Benefits
Which of the following choices describes the following statements
about Intangible Asset?
I. An identifiable non-monetary asset without physical substance.
II. Deposits in banks, receivables, and other debt instruments are
identified as intangible assets.
III. Initially measured at cost when acquired.
a. statement I is correct, but statements II and III are
incorrect
b. statements I and III are correct, but statement II is
incorrect
c. statements I, II, and III are correct
d. statements I, II, and III are incorrect
The following statements are based on PAS 38
I.
II.
III.
a.
b.
c.
d.
Expenditure on an intangible asset that was initially
recognized as an expense shall be recognized as part of
the cost of an intangible asset at a later date.
No intangible asset arising from the research and
development phase of an internal project shall be
recognized in all cases.
Internally generated brands, mastheads, publishing titles,
customer list and items similar in substance shall be
recognized as intangible assets.
False, False, False
True, False, False
True, False, True
True, True, True
The cost of an internally generated intangible asset includes all of
the following, except
a. Expenditure on training staff to operate asset.
b. Compensation costs of personnel directly engaged in
generating the asset.
c. Expenditure on materials used in generating the
intangible asset.
d. Fees to register a legal right.
PAS 40 ( Investment Property )
It is held to earn rentals or for capital appreciation or both.
a.
Initial measurement
b.
Exchange of assets
c.
Investment property
d.
Recognition
Subsequent to initial recognition, the investment property shall be
measured at
a.
Fair value
b.
Cost less any accumulated depreciation and any
accumulated impairment losses
c.
Revalued amount
d.
Either fair value or cost less any accumulated
depreciation and any accumulated impairment losses
Which of the following properties falls under the definition of
investment property?
I.
II.
III.
IV.
a.
b.
c.
d.
Land held for long-term capital appreciation.
Property occupied by an employee paying rent at
market rate.
Property being constructed on behalf of third parties
A building owned by an entity and leased out under an
operating lease.
I and IV
II and IV
I, II, and III
IV
A. Property held to earn rentals.
B. Property held for capital appreciation.
C. Property used in the production or supply of goods or
services.
D. A and C
Pas 40 applies to all types of entities, regardless of their size or
industry.
Pas40 requires investment property to be revalued at least once
every three years.
A. True, True
B. True, False
C. False true
D. False, False
An investment property that is measured under the cost model is
accounted for using?
a. PAS 16
b. PAS 28
c. PAS 40
d. PAS 27
If property held under an operating lease is classified as investment
property:
a. All investment property will be accounted for using the
fair value model.
b. Depreciation will no longer be charged.
c. All property held under operating leases are classified
as investment properties.
d. None of the above
Which of the following does not define investment property?
A. Property held to earn rentals.
B. Property held for capital appreciation.
C. Property used in the production or supply of goods or
services.
D. A and C
Which of the following does not define investment property?
a. Property held to earn rentals
b. Property held for capital appreciation
c. Property used in the production or supply of goods or
services
d. A and C
An investment property shall be measured initially at
a. Cost.
b. Cost less impairment
c. Depreciable amount less impairment
d. Fair value less impairment
An investment property shall be measured initially at its
a. Cost
b. Fair value
c. Deemed cost
d. Value in use
According to Philippine Accounting Standard 40 (PAS 40),
Investment Property, which of the following statements is true
regarding the initial measurement of investment property?
a.
Investment property should be initially measured at fair
value, with any changes in fair value recognized in profit
or loss.
b.
Investment property should be initially measured at
historical cost, with any changes in fair value recognized
in profit or loss.
c.
Investment property should be initially measured at fair
value, with any changes in fair value recognized in other
comprehensive income.
d.
Investment property should be initially measured at fair
value, with any changes in fair value recognized in
equity.
Repairs and maintenance costs are normally:
a. Expensed in the statement of profit or loss as incurred
b. Capitalized
c. Recorded as deferred expenses
d. None of the above
Which of the following does not define investment property?
Which of the following are investment property?
I. A building owned by the entity and leased out under one or more
operating leases
II. A building that is vacant but is held to be leased out under one or
more operating leases.
III. Land held for a currently undetermined future use
IV. Land held for long-term capital appreciation
a. I and II
b. III and IV
c. I, II, III, and IV
c. none of these
CFAS FINALS REVIEWER Page 6
The following are not investment property except:
a. Property occupied by employees.
b. Property acquired exclusively for sale in the near future
or for development and resale.
c. Property that is leased out to another entity under a
finance lease.
d. Property that is being constructed or developed for
future use as investment.
When an owner-occupied property is transferred to investment
property at fair value, a decrease in the carrying amount of the
property to its fair value at the date of transfer.
a.
b.
c.
d.
Is recognized in profit and loss or charged against the
revaluation surplus to the extent of its credit balance.
Is recognized in profit and loss at all times.
Is absorbed by retained earnings.
Is carried directly to equity.
The following are not investment property except on:
a. Property acquired exclusively for sale in the near future
or for development and resale
b. Property that is being constructed or developed for
future as investment property
c. Property that is leased out to another entity under a
financial lease
d. Property held for future use as owner-occupied
property
PAS 41 ( Agriculture )
The harvested produce of the entities biological assets.
a.
Bearer biological assets
b.
Agricultural produce
c.
Measurement
d.
Agricultural activity
Which of the following statements is incorrect regarding the
accounting for biological assets?
a. Agricultural land used in growing agricultural
produce can never qualify for recognition as a biological
asset.
b. Biological asset is a living animal or plant.
c. Agricultural produce is harvested product from a
biological asset before any processing
d. PAS 41 is used to account for both consumable and
bearer plants.
Which of the following is a biological asset that is accounted for
under PAS 41?
a.
Dead animals used for display.
b.
Bearer plant.
c.
Dairy cattle used to produce milk.
d.
Plants used for beautification.
Which of the following is a biological asset that is accounted for PAS
41?
A. Dead animals used for display
B. Bearer plant
C. Dairy cattle used to produce milk
D. Plant used for beautification
Agricultural produce is
a. The harvested product from biological asset
b. Valued at the time of harvest at the cost of
production
c. Valued at each reporting period at fair value less cost
of disposal
d. All of the choices are correct regarding agricultural
produce
Agriculture, which of the following is a key characteristic of
biological assets?
a.
Biological assets are living plants and animals.
b.
Biological assets are intangible assets related to
agricultural activities.
c.
Biological assets are always measured at historical cost.
d.
Biological assets are classified as financial instruments.
Which of the following is a biological asset that is accounted for PAS
41?
A. Dead animals used for display
B. Bearer plant
C. Dairy cattle used to produce milk
D. Plant used for beautification
How should an entity account for agricultural produce that is
harvested. from biological asset and remains on hand at the end of
the reporting period under PAS 41
A. Recognize as inventory
B. Recognize as biological assets
C. Recognize as revenue
D. Recognize as expenses
It is the creation of additional living animals or plants.
a. Growth
b. Pro-creation
c. Degeneration
d. None of the above
PAS 41 does not apply to the following except:
a. Land related to agriculture activity
b. Intangible related to agriculture activity
c. Agricultural produce at the point of harvest
d. Government grants related to bearer plants
PAS 41 is applicable to
a. Land related to agricultural activity
b. Intangible assets related to agricultural activity
c. Agricultural produce at the point of harvest
d. Bearer plants related to agricultural activity
This is the management of the biological transformation and harvest
of biological assets for sale or for conversion into agricultural
produce or into additional biological assets
a. Agricultural activity
b. Agricultural management
c. Biological transformation
d. None of the above
Which of the following is an agricultural produce?
a. Tobacco plants
b. Sheep
c. Tea
d. Wool
The following are the processes that cause qualitative or
quantitative changes in a biological assets except:
a. Growth
b. Procreation
c. Change
d. Degeneration
Which of the following assets are identified as consumable
biological assets?
I. livestock intended for the production of meat
II. livestock held for sale
III. livestock from which milk is produced
IV. fish in farms
V. fruit trees from which fruit is harvested
VI. trees being grown from lumber
a. I, II, and III
b. IV only
c. I, II, and VI
d. all of these
Agricultural produce is measured at fair value less costs to sell at the
point of harvest.
a. except when fair value cannot be measured reliably,
in which case, the initial measurement is at cost.
b. except when costs to sell cannot be measured
reliably, in which case, the initial measurement is at fair
value.
c. both statements
d. without exception.
Pas 41 applies when it’s related to agricultural activity such as;
a. Biological assets, except bearer plants
b. Agricultural produce at the point of harvest
c. Intangible assets related to agricultural activity
d. a and b
PFRS 1( First-time Adoption of Philippine Financial Reporting
Standards )
The application of PFRS 1, however,is not confined only to the year
2005. Entities that were previously exempted from applying the “full”
PFRS’s, such as SMEs who have adopted the PFRS for SMEs and micro
entities who have adopted Other Acceptable Basis of Accounting
(OCBOA). Are acquired to apply PFRS 1 when they transition to the
“full” PFRS. What does SME stand for?
a.
Small to Medium Enterprises
b.
Subject Matter Experts
c.
Small and Medium Enterprises
d.
Sharp Multi-Input Editing Soft wares
Under PFRS 1, the early application of PFRSs that have not yet
become effective as of the current reporting period
a. is required.
b. is permitted, but not required.
c. is required, but not permitted.
CFAS FINALS REVIEWER Page 7
d.
is prohibited.
An entity that presents first annual financial statements that conform
with PFRS is known as?
a.
A first time adopter.
b.
An originating entity.
c.
A provisional presenter.
d.
An initial reporter.
Which financial statement is prepared under the Philippine Financial
Reporting Standard 1 (PFRS 1) when an entity adopts International
Financial Reporting Standards (IFRS) for the first time?
a. Statement of Financial Position
b. Statement of Comprehensive Income
c. Statement of Changes in Equity
d. Statement of Cash Flows
According to Philippine Financial Reporting Standards (PFRS) 1, Firsttime Adoption of PFRS, which of the following is a requirement for an
entity adopting PFRS for the first time?
a.
Restatement of comparative financial statements as if
PFRS had always been applied.
b.
Application of PFRS prospectively, starting from the date
of adoption.
c.
Exemption from restating comparative financial
statements if it is impracticable to determine the effect
of applying PFRS.
d.
Adoption of PFRS only for selected financial statement
items deemed most relevant by the entity.
When should an entity present the opening statement of financial
position required by PFRS 1?
A. As of the date of transaction
B. One year before the date of transaction
C. Two years after the date of transaction
D. At the end pf the reporting period
These are classified as current only when all of the criteria under PFRS
5 are met as of the end of the reporting period.
a. Non-current assets
b. Current assets
c. Recognition
d. Derecognition
A first time adopter is permitted to zero-out any cumulative
translation differences recognized in equity under the previous
GAAP.
a. Cumulative translation differences
b. Hedge Accounting
c. Business Combination
d. Compound financial instruments
PFRS 1 requires an entity to prepare and present an
a. Opening PFRS financial statements
b. Opening PFRS statement of financial position
c. Opening PFRS statement of profit and loss and other
comprehensive income
d. Opening notes to the financial statements
Under PFRS 1, the early application of PFRSs that have not yet
become effective as of the current reporting period is
a. Required
b. Permitted, but not required
c. Required, but not permitted
d. prohibited
Retrospective application of accounting policies means
a. As if PFRSs have been used all along.
b. As if PFRSs are used only in prior periods.
c. As if PFRSs are used only in the current period.
d. Restating the financial statements in order to correct
all errors.
Financial statements prepared in accordance with PFRSs are said to
be the entity's "First PFRS financial statements” if the previous
financial statements meets the following:
I. Were prepared in accordance with other reporting standards not
consistent with the PFRSs.
II. Did not contain an explicit and unreserved statement of
compliance with PFRSs.
III. Contained an explicit and unreserved statement of compliance
with some, but not all, PFRSs.
IV. Were prepared using some, but not all, applicable PFRSs.
a. I and II
b. I, II, and III
c. III and IV
d. all of these
Which of the following statement about PFRS 1 is correct?
a. PFRS 1 is applied only once, that is when the entity
second adopt PFRS.
b. PFRS 1 may apply when previous financial statements
contained an explicit and underserved statement of
compliance with PFRSs,even if the auditor’s report has
been qualified.
c. PFRS 1 requires an entity to prepare and present an
opening PFRS statement of financial position at the date
of transition to PFRSs.
d. PFRS 1 prohibits the application of non-uniform
accounting policies or late versions of GAAP to the
comparative periods as these determine comparability.
PFRS 2( Share-based Payment )
Determine whether it is true or false.
I. For transactions with employees, the measurement date is the
date when the entity receives the good or services.
II. For transactions with employees and others providing similar
services, the measurement date is the grand date.
a.
Both are true
b.
I is true and II is false
c.
I is false while II is true
d.
Both are false
What is the date on which the fair value of the equity instrument
granted is measured?
a.
Measurement date
b.
Grant date
c.
Exercise date
d.
Balance date
Which of the following is excluded from the scope of PFRS 2?
A. Employee share option plans
B. Employee share appreciation rights
C. Purchase of goods from an unrelated party in
exchange for an entity's own share of stocks
D. Transfer of equity instruments as consideration for a
business combination
What is the date on which the fair value of the equity instrument
granted is measured?
A. Measurement Date
B. Grant Date
C. Exercise Date
D. Balance Date
Which of the following is an objective of PFRS 2 - Share-based
Payment?
a. To determine the accounting treatment for sharebased payment transactions
b. To provide guidance on the measurement of equitysettled and cash-settled share-based
payment transactions
c. To prescribe the disclosure requirements for sharebased payment transactions
d. All of the above
The difference between fair value shares to which counter party has
the right to subscribe and price the counter party is required to pay
for those shares
a.
INTRINSIC VALUE
b.
Fair Value
c.
Zonal Value
d.
Book Value
PFRS 2 requires specific disclosures about share-based payment
transactions. Which of the following is not a required disclosure?
A. The number of shares granted pr options exercised
during the period
B. The fair value of shares granted to employees
C. The method used to determine the fair value of share
options
D. The names of individual employees who received
share-based payments
A form of compensation given to an employee whereby the
employee is entitled to future cash payment.
a. Share-based compensation plans
b. Employee share option plans
c. Cash settled share-based payment transactions
d. Employee share appreciation rights
PFRS 2 applies to all entities, including subsidiaries using their parent’s
or fellow subsidiary’s equity instruments as consideration for goods or
services, and to all share-based payment arrangements except the
following:
a. Transaction with owners including employees who are
also shareholders acting in their capacity as owners, e.g.
issuance of dividends, granting of stock rights in relation
to an owner’s preemptive right, and treasury share
transactions.
b. Business Combinations
CFAS FINALS REVIEWER Page 8
c. Issuance of shares as settlement of forward contracts,
futures, and other derivative instruments
d. All of the above
Total comprehensive income for the period is presented?
a. Showing separately the total amount attributable to
owners of non-controlling interest
b. Showing separately an analysis of expenses by
function
c. Showing separately an analysis of expenses by nature
d. Showing separately profit or loss and the total of other
comprehensive income
How should a company account for share-based payment
transactions with employees?
a. Companies may choose to recognize share-based
payments as an expense or as equity only
b. Companies must always recognize share-based
payments as an expense
c. Companies must always recognize share-based
payments as equity only
d. The recognition of share-based payments as an
expense or as equity depends on the type of sharebased payment
How are share-based payment transactions recognized in the
financial statements under PFRS 2?
a. As an expense in the income statement with
corresponding credits to equity accounts
b. As a liability in the balance sheet with corresponding
debit to cash accounts
c. As an expense in the income statement with
corresponding debit to liability accounts
d. As a gain in the income statement with corresponding
credits to equity accounts
In an equity-settled share-based payment transaction with nonemployees, the order of priority in measurement are:
I. Exercise Price
II. Intrinsic Value
III. Fair value of equity instruments granted
IV. Fair value of goods or services received
a. I and II
b. II and IV
c. III and IV
d. I, II, III, and IV
Entity A agrees to issue 500 of its shares of stock as consideration for
services that it has received. The counterparty is an employee, the
share option has a fair value of P80 per share and an exercise price
of P50 per share, how much is the
intrinsic value?
a. P15,000
b. P25,000
c. P40,000
d. P65,000
Transaction in which an entity acquires goods or services and pays
for them by issuing its own equity instruments or cash based on the
value of its own equity instruments.
a.
b.
c.
d.
Share-based compensation plans.
Recognition
Share-based payment transaction.
Employee share option plans.
It’s a plan in arrangement whereby, in exchange for services, an
employee is compensated in the form of (or based on) the entity’s
equity instrument.
a. Share-based compensation plans
b. Employee share option plans
c. Measurement of compensation
d. Shared-based payment transaction
PFRS 3 ( Business Combinations )
A business combination is a transaction or other event in which an
acquirer obtains control of?
a.
One to five businesses
b.
One or more businesses
c.
Five to fifteen businesses
d.
One business
It is the excess of the cost of business combination over the
acquirer’s interest in the net fair value of the acquiree’s identifiable
assets, liabilities and contingent liabilities recognized.
a. Goodwill
b. Negative Goodwill
c. Intangible asset
d. Suspense account
Which of the following methods must be applied in accounting for
business combinations under PFRS 3?
A. Acquirer method
B. Acquisition method
C. Purchase method
D. Pooling of interest
Which of the following statements accurately describes the main
objective of PFRS 3 (Philippine Financial Reporting Standards 3) Business Combinations?
a. PFRS 3 aims to provide guidance on the recognition
and measurement of intangible assets.
b. PFRS 3 aims to establish principles for the accounting
treatment of goodwill.
c. PFRS 3 aims to define the criteria for determining
whether a transaction qualifies as a business
combination.
d. PFRS 3 aims to outline the requirements for the
preparation of consolidated financial statements.
What is the measurement of the contingent consideration is
classified as an asset or a liability which is a financial instrument
a.
FAIR VALUE PROFIT AND LOSS OR OTHER COMPREHENSIVE
INCOME (FVPL OF FVOCI)
b.
Fair Value at date of acquisition
c.
Book Value
d.
Cost Value
On January 1, 20x1, ABC Co. Acquired 60% interest in XYZ, Inc. For
2,000,000 cash. ABC Co. Incurred transactions cost of 100,000 in the
business combination. ABC Co., elected to measure NCI at the NCI's
proportionate share in XYZ, Inc's identifiable net assets. The fair
values of XYZ's identifiable assets and liabilities at the acquisition
date were 6,000,000 and 3,500,000 respectively. How much is the
goodwill ( gain on bargain purchase) ?
A. 500,000
B. 478,000
C. (500,000)
D. (478,000)
When should a business combination be recognized by an acquirer
under PFRS 3?
A. At the date of the acquisition agreement
B. At the date of obtaining control over the acquired
entity
C. At the end of the financial reporting period
D. At the start of the negotiation process
It is the equity in a subsidiary not attributable, directly or indirectly, to
a parent. It is also called “minority interest” what it is?
a. Previously held equity interest in the acquiree
b. Acquisition-related costs
c. Non-controlling interest
d. None of the above
An integrated set of activities and assets that is capable of being
conducted and managed for the purpose of providing goods or
services to customers, generating investment income (such as
dividends or interest) or generating other income from ordinary
activities.
a. Business Combination
b. Acquirer
c. Business
d. Combinations
When is PFRS 3 Business Combinations applicable?
a) When an entity is acquired by another entity
b) When an entity acquires another entity
c) Both a and b
d) None of the above
What does PFRS 3 require when accounting for business
combinations?
a) The use of the acquisition method
b) The use of the pooling-of-interests method
c) The use of the equity method
d) The use of the cost method
What is the treatment of goodwill under PFRS 3?
a) Recognized as an asset and amortized over its useful
life
b) Recognized as an asset and subject to impairment
testing
c) Not recognized as an asset and written off
immediately
d) Not recognized as an asset but not written off
An entity that is controlled by another entity is called a:
a. parent
b. acquirer
c. subsidiary
CFAS FINALS REVIEWER Page 9
d. controllings
An acquirer may obtain control of an acquiree in a variety of ways
except:
a. by transferring cash or other assets (including net
assets that constitute a business)
b. by providing only one type of consideration
c. by issuing equity interests
d. by incurring liabilities
III. Deferred tax assets
IV. Assets arising from employee benefits
V. Intangible assets
VI. Investments in associate, subsidiary, or joint venture.
VII. Investments property measured under the fair value model.
a.
I, III, IV, and V only
b.
I, II,V, VI only
c.
II, VII, V only
d.
All of the above
The acquisition date is.
a.
the date on which the acquirer obtains control of the
acquiree.
b.
the opening date
c.
the date the acquirer transfers to the acquiree
d.
any of these
According to PFRS 5, gains and losses on remeasurement of assets
held for sale are
a. recognized in profit or loss
b. recognized in other comprehensive income
c. recognized only for impairment losses
d. not recognized
PFRS 4 ( Insurance Contracts )
According to PFRS 5, assets held for sale are measured at
A. Fair value
B. Fair value less cost to sell
C. Carrying amount
D. Lower of b and c
Which of the following statements does not agree with PFRS 4?
a. An insurer shall not recognize as a liability any
provisions for possible future claims, if those claims arise
under insurance contracts that are not in existence at
the end of the reporting period.
b. An insurer shall remove an insurance liability from its
statement of financial position when, and only when the
obligation specified in the contract is discharged or
cancelled or expires.
c. An insurer shall offset reinsurance assets against the
related insurance liabilities,
d. An insurer shall not offset income or expense from
reinsurance contracts against the expense or income
from the related insurance contracts.
Below are the PFRS 4 Insurance Contracts established principles
except for
A. Recognition
B. Estimates
C. Measurement
D. Disclosure
The surplus of the acquiring company's stake in the net fair value of
the identifiable assets, liabilities, and contingent liabilities of the
entity being acquired (previously referred to as negative goodwill)
must be dealt with in the following ways:
a. Spread out over the lifespan of the acquired assets
through amortization.
b. Reevaluated to ensure measurement accuracy, then
promptly recognized in the profit or loss.
c. Reevaluated to ensure measurement accuracy, then
recognized in retained earnings.
d. Held indefinitely as a capital reserve.
PFRS 5 ( Non-current Assets Held For Sale and Discontinued
Operations )
Choose which does belong to the group.
Non current assets within the scope of PFRS 5:
The statement of profit or loss includes which of the following?
A. Revenue, Cost of goods sold, distribution costs,
general, and administrative expense, and extraordinary
items.
B. Discontinued Operations
C. Gains and Losses arising from treasury share
transactions
D. Other comprehensive income
Which of the following assets should be classified as held for sale
under PFRS 5?
a. Property, plant, and equipment that will be leased to
another company within the next six months.
b. Inventories that are expected to be sold within the
next year.
c. Long-term investments in subsidiary companies that
are planned to be sold within the next two years.
d. Trade receivables that are overdue but expected to
be collected within the next three months.
A component of an entity is classified as discontinued operation:
I: when an entity’s end of reporting period changes and financial
statements are presented for a period longer or shorter than one
year.
II: when the entity has actually disposed of the operation
III: when the operation meets the criteria to be classified as held for
sale
IV: when an entity is required to outline all significant accounting
policies applied in preparing financial statements.
a.
I & II
b.
III & IV
c.
II & III
d.
I & IV
The statement of profit or loss includes which of the following ?
I. Property, plant, equipment
II. Investments property measured under the cost model
A. Revenue, Cost of goods sold, distribution costs,
general, and administrative expense, and extraordinary
items.
B. Discontinued Operations
C. Gains and Losses arising from treasury share
transactions
D. Other comprehensive income
The following statements are examples of discontinued operation
except.
A. Shifting of production or marketing activities for
particular line of business from one location to another.
B. Selling by a communications entity of all its radio
stations.
C. A conglomerate is engaged in commodity business,
real estate, manufacturing and construction business.
D. Selling by a meat packing entity of controlling interest
in a future entity.
Based on pfrs 5, assets held for sale are measured at??
a. fair value
b. carrying amount
c. fair value less cost to sell
d. lower of fair value less cost to sell and carrying amount
Which of the following is not considered as the sale of "highly
probable", as evidenced by the existence of all?
a. The entity's management is committed on selling the
asset;
b. It is unlikely that the plan to sell with the withdrawn.
c. The sale is expected to be completed within one year
from the date of classification;
d. Investment property measured under the cost model
Under PFRS 5, when is an asset classified as held for sale?
a) When management has made a decision to sell the
asset
b) When the asset is available for immediate sale in its
present condition
c) Both a and b
d) None of the above
What is the accounting treatment for non-current assets classified as
held for sale under PFRS 5?
a) Recognized at their carrying amount with no further
adjustments made
b) Recognized at their carrying amount minus any
expected selling costs and any impairment losses
c) Recognized at their fair value, less costs to sell
d) Recognized at their replacement cost
What is the accounting treatment for discontinued operations under
PFRS 5?
a) Continued to be reported as operations of the entity
until they are sold
b) Reported as a separate component of the income
statement until they are sold
c) Reported as a separate component of the balance
sheet until they are sold
d) Not reported separately
CFAS FINALS REVIEWER Page 10
“A noncurrent asset (or disposal group) is classified as held for sale or
held for distribution to owners if its carrying amount will be recovered
principally through a sale transaction rather than through continuing
use. This means that more economic benefits will be derived from
the asset if it is to be sold rather than continually used.”
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are wrong
d. Both statements are correct
Which of the following are noncurrent assets within the scope of
PFRS 5?
I. Property, plant and equipment
II. Investment property measured under the cost model
III. Tangible assets
IV. Investment in associate, subsidiary, or joint venture
a. I and IV
b. I, II, III, and IV
c. I, II, and IV
d. III only
Which of the following statements is true regarding the accounting
treatment of costs to sell under PFRS 5?
a.
Costs to sell are added to the fair value when
determining the measurement basis for an asset held for
sale.
b.
Costs to sell are never discounted because held-for-sale
assets should be sold within one year.
c.
Costs to sell are discounted if it is expected that the sale
will be made beyond one year.
d.
a or b
Which of the following statements accurately describes the
accounting treatment of costs to sell according to PFRS 5?
a. Costs to sell are included in the fair value when
determining the measurement basis for an asset held for
sale.
b. Costs to sell are not subject to discounting since heldfor-sale assets are expected to be sold within one year.
c. Costs to sell are subject to discounting if it is
anticipated that the sale will occur beyond one year.
d. Options A and C are correct.
PFRS 6 ( Exploration for and Evaluation of Mineral Resources )
Exploration and evaluation assets are initially measured at?
a.
Production
b.
Retail
c.
Cost
d.
Service
According to PFRS 6, how shall exploration and evaluation assets be
measured?
a. at present value
b. at cost
c. at fair value
d. at amortized value
When is an entity required to recognize exploration and evaluation
expenditure as an asset?
a.
When such expenditure is recoverable in future periods.
b.
c.
d.
When the technical feasibility and commercial viability of
extracting associated mineral resources have been
demonstrated.
When required by the entity's accounting policy for
recognizing exploration and evaluation assets.
Such expenditure is always expensed as incurred
How are exploration and evaluation assets measured according to
PFRS 6?
Initial
Subsequent
a. Cost.
Cost model
b. Fair value
Fair value through Profit or loss
c. Cost
Cost value
d. Cost
Cost model or revaluation model
What are the two(2) methods of accounting for exploration cost?
a.
Weighted average method
b.
Full cost method
c.
Successful effort method
d.
B&C
b. Exploration and evaluation assets are assessed for
impairment after the reclassification
c. Exploration and evaluation assets is reclassified every
end of the accounting period
d. None of the above
How are exploration and evaluation assets measured in PFRS 6?
a. cost model
b. in fair value
c. revaluation model
d. both a and c
All of which would qualify as an exploration and evaluation asset,
except
a.
Expenditure for the acquisition of rights to explore.
b.
Expenditure for exploratory drilling
c.
Expenditure for the development of mineral resources
d.
Expenditures in relation to the evaluation of technical
feasibility and commercial viability of mineral resources
extraction
Which of the following statements are true about the exploration
and evaluation?
A. Exploration and evaluation assets shall not be
measured initially at cost.
B. Exploration and evaluation expenditure include
expenditures incurred after the technical feasibility and
commercial viability of extracting a mineral resource are
demonstrable.
C. Exploration and evaluation expenditure do not
include expenditures incurred after the technical
feasibility and commercial viability of extracting a
mineral resource are demonstrable.
D. Exploration and evaluation expenditures are
expenditures incurred by an entity in connection with the
exploration and evaluation of mineral resources after the
technical feasibility and commercial viability of
extracting mineral resource.
It is the price paid to obtain the property right to search and find an
undiscovered natural resource. It can also be the price paid for an
already discovered resource. It can also be leasing payments for
property containing a productive natural resource, included in these
acquisition costs are royalty payments to the owner of the property.
a. Exploration Cost
b. Acquisition Cost
c. Full Cost
d. Development Cost
Determine the following statements if it's true or false.
I. addresses the accounting for expenditures on exploration for and
evaluation of mineral resources.
II. it is illegal to explore for mineral resources without obtaining first an
authorization frim the
government
a. I only is correct
b. II only is correct
c. both are true
d. both are false
How does PFRS 7 define “currency risk”
a. the risk associated with changes in market interest
rate.
b. the risk associated with fluctuations in foreign
exchange rates.
c. the risk that an entity will encounter difficulty in
meeting obligations associated with financial liabilities.
d. the risk associated with fluctuations in market prices
other than those arising from interest rate risk or currency
risk.
Are exploration and evaluation expenditures recognized as assets in
accordance with the entity's accounting policy.
a. Exploration and Evaluation Assets
b. Subsequent Measurement
c. Exploration and Evaluation Expenditures
d. Exploration and Evaluation
Which of the following shall an entity disclose in case it holds
collateral and is permitted to sell or repledge the collateral in the
absence of default by the owner of the collateral?
In Reclassification of exploration and evaluation assets, which
Statement is true?
a. Exploration and evaluation as sets are assessed first for
impairment before reclassification
PFRS 7 ( Financial Instruments: Disclosures )
Under what PFRS is Financial Instruments: Disclosures?
a.
PFRS 8
b.
PFRS 6
c.
PFRS 7
d.
PFRS 5
A. The fair value of the collateral held.
B. The fair value of any such collateral sold or repledged
and whether the entity has an obligation to return it.
C. The terms and conditions associated with its use of the
collateral
D. B and C
E. All of the above
CFAS FINALS REVIEWER Page 11
In the statement of cash flows give the 2 methods of presentation
that it uses?
a. Direct Method, Indirect Method
b. Current asset, Current liabilities
c. Operating
d. None of the above
Two categories of disclosures require by PFRS 7:
a.
INFORMATION ABOUT THE SIGNIFICANCE OF FINANCIAL
INSTRUMENTS AND INFORMATION ABOUT THE NATURE
AND EXTENT OF RISKS ARISING FROM FINANCIAL
INSTRUMENTS
b.
Information about the significance of financial
statements and information about the nature and extent
of risks arising from financial statements.
c.
Information about the significance of financial assets
and liabilities and information about the nature and
extent of risks arising from financial assets and liabilities.
d.
Information about the insignificance of financial liabilities
and information about the nature and extent of risk
arising from financial liabilities.
Which of the following shall an entity disclose in case it holds
collateral and is permitted to sell or repledge the collateral in the
absence of default by the owner of the collateral?
A. The fair value of the collateral held.
B. The fair value of any such collateral sold or repledged
and whether the entity has an obligation to return it.
C. The terms and conditions associated with its use of the
collateral
D. B and C
E. All of the above
Which of the following statements are not true about PFRS Financial
Instruments: Disclosure?
A. In disclosing fair values, an entity shall group financial
assets and financial liabilities into classes, but shall offset
them only to the extent that their carrying amounts are
offset in the statement of financial position.
B. In disclosing fair values, an entity shall group financial
assets and financial liabilities into classes, but shall offset
them only to the extent that their fair values are offset in
the statement of financial position.
C. An entity shall disclose information that enables users
of its financial statements to evaluate the significance of
financial instruments for its financial position and
performance.
D. For loans payable recognised at the end of the
reporting period, an entity shall disclose details of any
defaults during the period of principal, interest, sinking
fund, or redemption terms of those loans payable.
PFRS 7 is/are:
a. prescribes the requirements for financial instruments
b. applies to financial instrument that are within the
scope of PFRS 9
c. a and b
d. none
If an entity elected to measure investments is equity securities at
FVOCI, it shall disclose those investments, the reason for the election,
any dividends recognized during the period, and any
transfers of cumulative gain or loss within equity.
a. Collateral
b. Financial assets measured at FVOCI
c. FVOCI
d. Allowance accounts for credit losses
For segment reporting, which tests must be applied to determine if
an operating segment is reportable?
a.
Revenue test and asset test
b.
Revenue test, asset test and profit or loss test
c.
Revenue test, asset test and expense test
d.
Revenue test, asset test and cash flow test
According to PFRS 8, an operating segment is reportable when:
In PFRS 7 in the statement of financial position, How financial assets
are measured?
a. Fair value through profit or loss
b. Amortized cost
c. Fair value through other comprehensive income
d. All of the above
What kind of risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an
obligation?
a. credit risk
b. liquidity risk
c. market risk
d. other price risk
A risk that involves an accounting loss from a financial instrument as
a result of a possible failure of another party to perform their end in a
particular contract is a/an
a.
Investment risk
b.
Market risk
c.
Impairment risk
d.
Credit risk
What are the two main categories of disclosures that PFRS 7
requires?
I. Information about significance of financial instruments.
II. Qualitative and quantitative information about operational risk.
III. Information about operating leases or non-financial liabilities.
IV. Information about the nature and extent of risks arising from
financial instruments.
a.I and III
b.I and IV
c.II andIV
d.II and III
PFRS 8 ( Operating Segments )
The business environment is constantly changing the needs of
consumers change, business regulations change, the demand for
products and services, and consequently the supply thereof, may
decline or end. Entities need to adapt to these changes in order to?
a.
Earn a lot of money
b.
Stay in business
c.
For your business to become successful among others.
d.
To attract people
A change in the pattern of consumption of economic benefits from
an asset is most likely a
a. change in accounting policy.
b. change in accounting estimate.
c. error
d. any of these
I. The external and internal revenue of the segment is 10% more than
the combined external and internal revenue of all operating
segments
II. The segment profit or loss is 20% or more of the higher between the
combined profit or loss of all operating segments
III. The assets of the segment are 10% or more of the total assets of all
operating segments
A. Only statement 1 is correct
B. Statements 1 and 2 are correct
C. Statements 2 and 3 are correct
D. Statements 1 and 3 are correct
Segment A represents less than 10% of total sales, but is eligible from
a profit and loss and total assets test context. Segment A
a. Is not reportable segment
b. May be reported as a separate segment
c. All of these
d. None of the above
The entity shall disclose the following about major customers.
a.
The total amount of revenue from all major customers
b.
The identity of segment or segments reporting the revenue
c.
The fact of reliance from major customers
d.
All of the above
Which tests must be used to establish if an operating segment is
reportable for segment reporting?
a.Revenue test, and asset test
b. Revenue test, asset test and profit or loss test
c. Revenue test, asset test and expense test
d. Revenue test, asset test and cash flow test
How on PFRS 8 firms identify reportable segments?
a. by product lines
b. by geographic regions
c. by industry classification
d. by designations used inside the firm
PFRS 8 requires which of the following approaches in identifying
operating segments?
a. manager’s approach
b. gentle approach
c. direct approach
d. management approach
Which of the following is considered a chief operating decision
maker?
I. Chief of finance
II. Chief of the management
III. Chief executive officer
IV. Chief operating officer
CFAS FINALS REVIEWER Page 12
V. Group of executive directors
a. I and V
b. II and III
c. IV
d. III, IV and V
Which is known to be one of the financial instruments?
a. Notes receivable
b. Warranty Provision
c. Accounts Payable
d. None of the above
In PFRS 8 quantitative thresholds, an operating segment is
considered reportable when it meets a certain point, which of the
following is true?
a. Its profit or loss is 10% or more of the greater in absolute
amount.
b. Its assets are 10% or more of the total assets of all
operating segments.
c. both a and b
d. none of the above
This means the financial asset is measured at fair value through other
comprehensive income
a.
FVOCI
b.
FIFO
c.
LCNRV
d.
GAAP
The reasonable upper limit for the number of operating segments
that an entity must disclose is.
a.
Two
b.
Ten
c.
Eight
d.
Five
It is used in identifying segments.
a Segment Approach
b. Revenue Approach
c. Management Approach
d. Expenditure Approach
PFRS 9 ( Financial Instruments )
Financial assets are classified as subsequently measured at: Which
does not included?
a.
Contractual provisions
b.
Amortized cost
c.
Fair value through other comprehensive income (FVOCI)
d.
Fair value through profit ot loss (FVPL)
Which of the following is measured at fair value with fair value
changes recognized in profit or loss
a.Held to maturity investments
b. Financial assets designated at FVPL
c. FVOCI
d.All of these
Equity investments irrevocably accounted for at fair value through
other comprehensive income are:
a.
Non trading investments of less than 20%.
b.
Trading investment of less than 20%.
c.
Investments of between 20% and 50%.
d.
Investments of more than 50%.
As presented in PFRS 9, whenever an asset is reclassified from Fair
Value through Other Comprehensive Income (FVOCI) to Fair Value
through Profit or Loss (FVPL), its cumulative gain or loss previously
recognized in OCI should be:
A. Retained at OCI
B. Transferred to Profit or Loss
C. Derecognized at Amortized Cost
D. None of the Above
Debt investments reported at amortized cost are
a. Held for collection debt investment
b.Trading debt investment
c.Managed and evaluated based on a documented risk
management strategy
d. All of these are correct
All of the following financial assets are classified as subsequently
measured except:
a. Amortized cost
b. Fair value through other comprehensive income
c. Fair value through surplus or deficit
d. Fair value through profit or loss
According to PFRS 9, it is the amount at which a financial asset or a
financial liability is measured at initial recognition minus principal
repayments, plus or minus the cumulative amortization using the
effective interest method of any difference between
that initial amount and the maturity amount and, for financial assets
adjusted for any loss allowance.
a. cost
b. carrying amount
c. amortized cost
d. fair value
Which of the following is measured at fair value with fair value
changes recognized in profit or loss?
a. Held to maturity investments
b. Financial assets designated at FVPL
c. FVOCI
d. All of these
If the entity's business model's objective is to hold assets in order to
collect contractual cash flows and cash flows are solely payments of
principal and interest on the principal amount outstanding, the
financial asset is classified
a. according to management's intention of holding the
securities.
b. as financial asset measured at amortized cost.
c. as financial asset measured at fair value through other
comprehensive income.
d. any of these
Which of the following refers to how an entity manages its financial
assets in order to generate cash flows?
a. Financial manager
b. Business model
c. Financial assets
d. None of the above
An entity may make an irrevocable election at initial recognition to
classify any of the following?
a. investment in equity instruments
b. investment in assets instruments
c. investment in liabilities instruments
d. none of the above
All of the following are known to be financial instruments, except
a.
Warranty provision
b.
Convertible bonds.
c.
Loans receivable.
d.
Notes receivable.
Tell whether the statement is TRUE or FALSE.
I.
The term “ equity security” encompasses any instrument
representing ownership shares and right, warrants or
options to acquire or dispose of ownership shares at a
variable price.
II.
Trading Securities are debt and equity securities that are
purchased with the intent of selling them in the near term
or very soon
a True; True
b.True; False
c.False; True
d.False; False
During this period, an entity requires an investment. The entity has a
“hold to collect and sell” business model. The investment should be
classified as
a.
Investment measured at fair value through other
comprehensive income
b.
Investment measured at amortized cost
c.
Investment measured at fair value at profit or loss
d.
Any of these