Ctrl + F is the shortcut in your browser or operating system that allows you to find words or questions quickly.
Ctrl + Tab to move to the next tab to the right and Ctrl + Shift + Tab to move to the next tab to the left.
On a phone or tablet, tap the menu icon in the upper-right corner of the window; Select "Find in Page" to search a question.
Share UsSharing is Caring
It's the biggest motivation to help us to make the site better by sharing this to your friends or classmates.
Provides financial information of an entity to external users in order to enable them to take relevant decisions based on the entity's financial performance.
Under the reporting requirements for impaired assets, impairment losses for assets to be held and used shall be reported
Which of the following statements is true with regard to the accountant's concept of Materiality?
Solar Products purchased a computer for P13,000 on July 1, 2016. The company intends to depreciate it over 4 years using the double-declining balance method. Salvage value is P1,000. Depreciation for 2017 is
Costs directly attributable to bringing the asset to the location and condition for its intended use include all of the following, except
Barry Corp. transferred financial assets to Chop, Inc. The transfer meets the conditions to be accounted for as a sale. As the transferor, Barry should do each of the following, except;
This means that the shares can be sold and still the original shareholder has the right to receive the dividends on the payment date.
Under IAS 16 (Property, Plant, and Equipment), subsequent revaluation decreases are:
Which of the following methods of determining bad debt expense most closely matches expense to revenue?
Stock dividends on common stock should be recorded at their fair market value by the investor when the related investment is accounted for under which of the following methods?
Harrel Company acquired a patent on an oil extraction technique on January 1, 2010 for P5,000,000. It was expected to have a 10 year life and no residual value. Harrel uses straight-line amortization for patents. On December 31, 2011, the expected future cash flows expected from the patent were expected to be P600,000 per year for the next eight years. The present value of these cash flows, discounted at Harrel's market interest rate, is P2,800,000. At what amount should the patent be carried on the December 31, 2011 balance sheet?
When an investor uses the cost method to account for an investment in common stock, cash dividends are classified by the investor as:
A loss on impairment of an intangible asset is the difference between the asset's
If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement:
Which of the following is not a condition that must be satisfied before interest capitalization can begin on a qualifying asset?
Which of the following statement is the correct statement?
An expenditure made in connection with a machine being used by an enterprise should be
Doubtful Accounts Expense is treated as a/an
The Jones Company owns a large warehouse that it plans to sell. Which of the following is true?
An improvement made to a machine increased its fair market value and its production capacity by 25% without extending the machine's useful life. The cost of the improvement should be
Two independent companies, Hager Co. and Shaw Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained: Hager's Land Shaw's Land Cost and book value P192,000 P120,000 Fair value based upon appraisal 240,000 210,000 The exchange was made, and based on the difference in appraised fair values, Shaw paid P30,000 to Hager. The exchange lacked commercial substance. 58. The new land should be recorded on Hager's books at
Which is not valid with respect to revaluation of property?
The best method of inventory valuation for a dealer of jewelry is
Which of the following statements is incorrect in relation to the recognition criteria for elements of the financial statements?
Under PAS 28, adjustments to share in profit or loss of an associate may differ if the transaction is downstream or upstream. Which of the following statements is true? I. Jack Co. owns 20% interest in Old Man, Inc. During the year Old Man sold magic beans to Jack. This is an upstream transaction. II. Goldilocks Co. owns 20% interest in Papa Bear, Inc. During the year Goldilocks purchased porridge from Papa Bear. This is a downstream transaction.
Which of the following is NOT true regarding accounting for transfers of receivables under PFRS?
Which of the following is false?
General Products Company bought Special Products Division in 2010 and appropriately recorded P500,000 of goodwill related to the purchase. On December 31, 2011, the fair value of Special Products Division is P4,000,000 and it is carried on General Product's books for a total of P3,400,000, including the goodwill. An analysis of Special Products Division's assets indicates that goodwill of P400,000 exists on December 31, 2011. What goodwill impairment should be recognized by General Products in 2011?
If a petty cash fund is established in the amount of P250, and contains P150 in cash and P95 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts
Which of the following controls most likely would be effective in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad debt write-offs?
Which of the following should be considered as cash in the balance sheet?
The term "financial instruments" encompasses the following except;
The profit margin on sales ratio is a measure for analyzing the use of property, plant, and equipment.
One potential advantage of financing corporations through the use of bonds rather than common stock is
Which of the following is not considered investment property?
Which of the following statement is incorrect regarding how the IASB requires that the impairment assessment be performed?
Identifiable intangible assets include all of the following except
On January 1, 2017, an entity has a herd of 100 2-year old animals. Ten animals aged 2.5 years were purchased on July 1, 2017 for P10, 800 each. Ten animals were born July 1, 2017. No animals were sold or disposed during the year. The fair value less cost to sell per unit were: 2-year old animal, 1/1 10,000 2.5-year old animal, 7/1 10,800 New born animal, 7/1 7,000 2-year old animal, 12/31 10,500 2.5-year old animal, 12/31 11,100 Newborn animal on 12/31 7,200 3-year old animal on 12/31 12,000 0.5-year old animal on 12/31 8,000 What is the carrying amount of biological assets before adjustment on December 31?
In relation to the financial statements, PAS 16 Property, Plant and Equipment, requires that the following disclosures be made for each class of asset: I. The carrying amount at the beginning and end of the reporting period. II. Accumulated depreciation. III. Total additions and disposals. IV. The total of impairment losses. V. Fair value at reporting date.
Accounting for Inventories are covered by International Accounting Standards _______?
Which of the following methods shall be used after initial recognition of property, plant and equipment? I. An entity shall choose either the cost model or the revaluation model as if s accounting policy and shall apply that policy to an entire class of property, plant and equipment. II. An entity shall choose either the cost model or the revaluation model as its accounting policy and shall apply that policy selectively to different classes of property, plant and equipment.
According to PAS 41, all of the following would be classified as biological asset, except,
Which of the following statements is false?
On January 1, 2007, Russell Company purchased a copyright for P1,000,000, having an estimated useful life of 16 years. In January 2011, Russell paid P150,000 for legal fees in a successful defense of the copyright. Copyright amortization expense for the year ended December 31, 2011, should be
Walsh Retailers purchased merchandise with a list price of 50,000, subject to trade discounts of 20% and 10%, with no cash discounts allowable. Walsh should record the cost of this merchandise as:
Bonds payable issued with scheduled maturities at various dates are called
As the economy becomes more and more depressed, a company's management decides to slash spending on research and development. What is the likely effect of this action on net income? Net income will be;
Samson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the straight-line basis. At the end of year 1, independent appraisers determine that the asset has a fair value of P750,000. The financial statements for year one will include the following information:
Revaluation surplus account is reported as (M1)
Composite or group depreciation is a depreciation system whereby
Tay Corp. factored P400,000 of accounts receivable to Rick Corp. on July 1, year 2. Control was surrendered by Tay. Rick accepted the receivables subject to recourse for nonpayment. Rick assessed a fee of 2% and retains a holdback equal to 5% of the accounts receivable. In addition, Rick charged 15% interest computed on a weighted-average time to maturity of the receivables of forty-one days. The fair value of the recourse obligation is P12,000.
Which statement is correct about the effective interest method of amortization?
Under IFRS, when an entity chooses the revaluation model as its accounting policy for measuring property, plant, and equipment, which of the following statements is correct?
The term "betterment" refers to;
ABC Ltd. uses the revaluation model for its head office building, which was acquired on January 1, 2016. At the end of 2016, the fair value of the building was lower than its carrying value by P500, 000. At the end of 2017, fair value had increased such that its fair value was only P100,000 less than its carrying value. Which of the following is true regarding the use of the revaluation model by ABC for its building?
Grayson Co. incurred significant costs in defending its patent rights. Which of the following is the appropriate treatment of the related litigation costs?
______________ is the management by an entity of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets which covers a diverse range of activities; for example, raising livestock, forestry, annual or perennial cropping, cultivating orchards and plantations, floriculture, and aquaculture (including fish farming).
The pricing of issues from inventory must be deferred until the end of the accounting period under which of the following methods of inventory valuation?
The costs of conversion of inventories include all of the following, except;
The discounted value of the note received by the endorser of the note from the bank is called;
The recognition criteria for biological assets and agricultural produce which must be met includes:
Which of the following assets do not qualify for capitalization of interest costs incurred during construction of the assets?
Which of the following expenditures qualifies for asset capitalization?
The cost of land does not include
All costs incurred in the construction of a plant building, from excavation to completion, should be considered as part of the asset's cost. The appropriate attribute to use when measuring land currently used in the business is
Which of the following is a realistic assumption of the straight-line method of depreciation?
Well Corp. has outstanding accounts receivable totaling P6.5 million as of December 31 and sales on credit during the year of P24 million. There is also a credit balance of P12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year?
Which of the following is not true about accounting for inventory under PAS 2?
Which of the following describes the flow of product costs through the inventory accounts of a manufacturer?
The term used for bonds that are unsecured as to principal is
Transaction costs directly attributable to the acquisition of financial asset held for trading or financial asset at fair value through profit or loss shall be expensed immediately.
The carrying value of an equipment equals (is)
Risers Inc. reported total assets of 1,200,000 and net income of 135,000 for the current year. Risers determined that inventory was overstated by 10,000 at the beginning of the year (this was not corrected). What is the corrected amount for total assets and net income for the year?
When at the date of initial classification and subsequent measurement of assets held for sale, the amount of fair value less costs to sell is less than the carrying amount, an impairment loss shall be recognized in
10 On July 1, 2016, TRNFI Furniture established a P150 petty cash fund. A check for P150 was made out to the petty cash custodian. During July, the petty cash custodian paid the following bills from the petty cash fund: Office supplies P 36 Postage 22 Delivery charges 40 Bottled water 28 Total P126 At the end of July the petty cash fund was replenished. The journal entry to establish the petty cash fund includes:
Which of the following is a reason why the specific identification method may be considered ideal for assigning costs to inventory and cost of goods sold?
Which of the following is not a characteristic of all long-term nonmonetary assets?
A petty cash fund of P50,000 was composed of the following on December 31, 200x:
Which of the following is NOT a characteristic of inventory?
Under U.S. GAAP, impairment loss is measured as the excess of the carrying amount over the assets discounted cash flow.
The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach
Revenues are
Simpson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the straight-line basis. At the end of year 1, independent appraisers determine that the asset has a fair value of P750,000. The journal entry to record depreciation for year one will include a
The journal entry to adjust the plant assets to fair value and record revaluation surplus in year one will include a
On the acquisition date, TJ Company designates purchased debt and equity securities as available-for-sale. TJs intent in buying investment securities is to make them available for sale when circumstances warrant, not to earn profit from short-term fluctuations in price, and not necessarily to hold debt securities to maturity. TJ Companys fiscal year ends on December 31. No investments were held by the company at the beginning of the year. Described below are the companys investment-related transactions: 2020 March 1 Purchased 30,000 PG, Inc. ordinary shares for 750,000, including brokerage fees and commissions. April 15 Purchased 1,000,000 of 10% bonds at face value from OW Corporation. July 23 Received cash dividends of 60,000 on the investment in PG, Inc. ordinary shares. October 15 Received semiannual interest on the investment in OW Corporations bonds. October 16 Sold the OW Corporation bonds for 1,100,000. November 2 Purchased 250,000 ESP Co. preference shares for 12,500,000, including brokerage fees and commissions. December 31 Recorded the necessary adjusting entries relating to the investments. The market values of the investments are 30 per share for PG, Inc. and 44 per share for ESP Co. preference shares. 2021 January 27 Sold half the PG, Inc. shares for 65 per share. March 2 Sold the ESP Co. preference shares for 78 per share. What amount of gain on sale of PG, Inc. shares on January 27, 2021, should TJ recognize?
Which of the following best describes the characteristics of a financial instrument?
It violates the matching principle because the bad debt loss is often recognized in later accounting period than the period in which the sales revenue was recognized.
All are non-financial assets except:
An investment property is recognized when I. It is probable that the future economic benefits that are associated with the investment property will flow to the enterprise. II. The cost of the investment property can be measured reliably.
When liquidating dividends exceed the cost of investment, the difference is credited to________
Bank statements provide information about all of the following except;
Companies frequently use the composite approach when the assets are similar in nature and have approximately the same useful lives.
Why would a company sell receivables to another company?
In which of the following does X have significant influence?
In order to be classified as a cash equivalent, an investment must have a maturity date of
Biological asset are measured at
The equity of the assignor in assigned accounts is equal to;
IFRS allows plant, property, and equipment to be valued using the cost model or the revaluation model. Which statement is true about the revaluation model for valuing plant, property, and equipment?
After initial recognition, an item of PPE may be carried in the books
The revaluation surplus resulting from initial revaluatidn of property, plant, and equipment shall be treated in which one of the following?
Pledges the specifically described receivables to a lender and signs a promissory note
Which will not require an adjusting entry on the depositor's books?
Africa Company purchased 2000 llamas at the beginning of current year. These llamas will be sheared semiannually and their wool sold to specialty clothing manufacturers. The llamas were purchased for P5, 000, 000. During the current year, the change in fair value due to growth and price changes is P350, 000, the wool harvested but not yet sold is valued at net realizable value of P100, 000 and the decrease in fair value due to harvest is P50, 000. What is the carrying amount of the biological asset at year-end?
When a corporation pays a note payable and interest,
Which of the following should be recorded in Accounts Receivable?
Trade-offs between the characteristics that make information useful may be necessary or beneficial. Issuance of interim financial statements is an example of a trade-off between;
Notes receivable are issued at face value when the stated rate of interest is the as the effective (market) rate.
The category "trade receivables" includes
The major problem of accounting for intangibles is determining
The following are the standards which deal primarily with the accounting for financial instruments except;
Which of the following events is most appropriately recorded as a reduction to accumulated depreciation?
A material credit balance in the 'cash in bank' account
Elkins Corporation uses the perpetual inventory method. On March 1, it purchased 10,000 of inventory, terms 2/10, n/30. On March 3, Elkins returned goods that cost 1,000. On March 9, Elkins paid the supplier. On March 9, Elkins should credit:
In addition to financial assets at fair value through profit or loss, which of the following categories of financial assets is measured at fair value?
Variable overhead costs incurred to self-construct an asset should be included in the cost of the asset.
According to the IASB Conceptual Framework, the elements-assets, liabilities, and equity-describe amounts of resources and claims to resources at/during a
It refers to the savings certificate that entitles the bearer to receive interest.
Under the perpetual inventory method, in addition to making the entry to record a sale, a company would
The most common method of recording depletion for accounting purposes is the
Which of the following is not a major characteristic of a plant asset?
Information regarding accounting policies adopted by an enterprise is essential to financial statement users. An example of an accounting policy that should be disclosed for inventory is the
When an investment previously classified as held for sale no longer meets the criteria to be so classified, it must be accounted for using the equity method retrospectively, as from the date that it was classified as held for sale.
If there is an evidence that an impairment loss on loan receivable has been incurred, the amount of the loss is equal to the;
All intangibles are subject to periodic consideration of impairment with corresponding potential write-downs.
Unreleased checks (checks drawn before the balance sheet date but held for later delivery to creditors)
A change from the cost method to the equity method of accounting for an investment in common stock resulting from an increase in the number of shares held by the investor requires;
The following information applied to Howe, Inc. for 2016: Merchandise purchased for resale 300,000 Freight-in 8,000 Freight-out 5,000 Purchase returns 2,000 Howe's 2016 inventoriable cost was
At the current year-end, a trustee held cash in the sinking fund account representing annual deposits to the fund and the interest earned on these deposits. How should the sinking fund be reported?
Samson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the straight-line basis. At the end of year 1, independent appraisers determine that the asset has a fair value of P750,000. The financial statements for year one will include the following information: The financial statements for year one will include the following information:
The FRSC consists of members with a number of
On January 1, 2011, Garry Co. redeemed its 15-year bonds of P2,500,000 par value for 102. They were originally issued on January 1, 1999 at 98 with a maturity date of January 1, 2014. The bond issue costs relating to this transaction were P150,000. Garry amortizes discounts, premiums, and bond issue costs using the straight-line method. What amount of loss should Garry recognize on the redemption of these bonds (ignore taxes)?
Which of the following statements is true? I. Computer software for a computer controlled machine tool that cannot operate without specific software is an integral part of the related hardware and is treated as property, plant and equipment. II. Computer software that is not an integral part of the related hardware is treated as intangible asset.
If Pop Company exercises significant influence over Son Company and owns 40% of its common stock, then Pop Company:
Generally speaking, biological assets relating to agricultural activity shall be measured using
The fair value option
Factoring of accounts receivables is;
Which of the following is not an intangible asset?
Shell Company has the following account balances at year-end: Accounts receivable P80,000 Allowance for doubtful accounts 4,800 Sales discounts 3,200 Shell should report accounts receivable at a net amount of
Is the assigning of peso amounts to the accountable economic transactions and events.
A transfer of financial assets should be reported as a sale if certain conditions are met. Which of the following is one of the conditions?
On March 1, 2008, a company established a sinking fund in connection with an issue of bonds due in 2019. At December 31, 2010, the independent trustee held cash in the sinking fund account representing the annual deposits to the fund and the interest earned on those deposits. How should the sinking fund be reported in the company's balance sheet at December 31, 2010?
Which of the following computations may properly result to the correct balance of an investment in associate account at year-end?
Vair Company owns a copyright. A material amount of legal fees and other costs it incurred in successfully defending a copyright suit should be
Bonds which may be called in or redeemed by the issuing entity prior to their date of maturity
The following statements are based on the Conceptual Framework of Accounting: I The Conceptual Framework is a reporting standard. II In cases of conflict, the requirements of the Conceptual Framework prevail over those of the PFRS. III The Conceptual Framework states that transaction must be accounted for according to their legal form.
The following statements relate to intangible assets. Which statement is correct? I. Subsequent to initial recognition, an intangible asset is measured at cost less accumulated amortization and any accumulated impairment loss. II. Subsequent expenditure on an intangible asset may be capitalized when it is probable that this expenditure will generate future economic benefits in excess of the originally assessed standard of performance and the expenditure can be measured reliably and attributed directly to the intangible asset.
Which of the following methods of determining annual bad debt expense best achieves the matching concept?
Depreciation is based on the decline in the fair market value of the asset.
Using the information in no. 39, what is the gain from the birth of animal on July 1?
Which statement is incorrect concerning property, plant and equipment?
When the company pays insurance premium on a life insurance policy of an officer and the officer or his heirs are the designated beneficiary, any cash surrender value is
Using the information in no. 39, what is the adjusted carrying amount of biological assets on December 31?
Land that is related to agricultural activity is valued:
Which of the following observations is not consistent with the cost method of accounting?
The following statements pertain to recognition and measurement of an impairment loss. Which statement is incorrect? I. An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount and should be recognized as an ordinary loss. II. After the recognition of an impairment loss, depreciation of the asset for the future periods should be equal to the revised carrying amount less its residual value allocated on a systematic basis over its original life.
The commonly used method in accounting for sales discount is
In January 1, 2003 Cameron Company established a sinking fund with its issue of bonds due in 2013. A bank was appointed as an independent trustee of the fund. On December 31, 2009, the trustee held P364,000 cash in the sinking fund account representing P300,000 in annual deposits to the fund and P64,000 of interest earned on those deposits. How should the sinking fund be reported in Cameron's balance sheet at December 31, 2009?
Is an outright sale of receivables, since the transfer of these receivables is without recourse.
In a periodic inventory system that uses the weighted average cost flow method, the beginning inventory is the;
The exclusive right to display a symbol of product identification is a:
Non trade receivables are classified as current assets only if they are reasonably expected to be realized in cash
Accounting for Agriculture is covered by International Accounting Standards _______?
Entity shall recognize a financial asset or a financial liability in its statement of financial position when, and only when, the entity becomes party to the contractual provisions of the instrument.
Entries to record the replenishment of petty cash fund result in a debit to petty cash fund and a credit to cash in bank. This accounting procedure typically exemplifies the
Which of the following costs should not be included on the statement of financial position as part of the cost of inventory?
Subsequent to the date of the note or the draft, the present value of an interest-bearing note is equal to
Which of the following statements is in accordance with the provisions of PAS 28? I. The income or loss on the investment in associate is computed on the net income after tax of the associate. II. The income or loss on the investment in associate is presented in the statement of profit or loss and other comprehensive income after the line item Income Tax Expense but before discontinued operations.
PFRS allows reversal of impairment losses when there has been a change in economic conditions or in the expected use of the asset. Under U.S GAAP, impairment losses cannot be reversed for assets to be held and used.
PFRS allows reversal of impairment losses when
The payment of accounts payable made after the close of the accounting period are recorded as if it were made at the end of the current.
The discount or premium is amortized to interest revenue over thee term of the note using the
An entity has an asset that was classified as held for sale. However, the criteria for it to remain as held for sale no longer apply. The entity should therefore
During 2016, Farver Company incurred P240,000 in legal fees in defending a patent with a carrying value of P2,500,000 against an infringement. Farver's lawyers were not successful with the defense of the patent. The legal fees should be;
How would the amortization of premium on bonds payable affect each of the following?
An owner-occupied property is held by an owner or finance lessee I. For use in the production of goods or services. II. For administrative purposes.
Wrath Co. uses the equity method to account for its January 1, 2003 purchase of Anger Inc.s common stock. On January 1, 2003, the fair values of Angers FIFO inventory and land exceeded their carrying amounts. How do these excesses of fair values over carrying amounts affect Wraths reported equity in Angers 2003 earnings?
These dividends represent return of invested capital
Depreciation is normally computed on the basis of the nearest
The following statements relate to the frequency of revaluation of property, plant and equipment. Which statement is incorrect?
If bonds are issued at a discount, it means that;
All of the following may be included under the heading of "cash" except;
During periods of rising prices, when the FIFO inventory method is used, a perpetual inventory system results in an ending inventory cost that is;
The following information was derived from the 2016 accounting records of Perez Co: Perez's Central Warehouse Perez's Goods Held by Consignees Beginning inventory 130,000 14,000 Purchases 575,000 70,000 Freight-in 10,000 Transportation to consignees 5,000 Freight-out 30,000 8,000 Ending inventory 145,000 20,000 Perez's 2016 cost of sales was?
The cost of a separately acquired intangible asset comprises its purchase price, including import duties and nonrefundable purchase taxes, and;
A transfer of receivables, with recourse, in exchange for cash should
Examples of physical assets include the following except;
What is the effective interest rate of a bond measured at amortized cost?
Blanco Company purchased 200 of the 1,000 outstanding shares of Darby Company's common stock for P300,000 on January 2, 2010. During 2010, Darby Company declared dividends of P50,000 and reported earnings for the year of P200,000. If Blanco Company used the fair value method of accounting for its investment in Darby Company, its Investment in Darby Company account on December 31, 2010 should be
May Roads sold P50,000 of goods and accepted the customer's P50,000 10%1-year note receivable in exchange. Assuming 10% approximates the market rate of return, what would be the debit in this journal entry to record the sale?
In deciding whether financing with receivables is a secured borrowing or a sale, the critical element is the extent to which;
On January 1, 2010, Reston Co. purchased 25% of Ace Corp.'s common stock; no goodwill resulted from the purchase. Reston appropriately carries this investment at equity and the balance in Reston's investment account was P720,000 at December 31, 2010. Ace reported net income of P450,000 for the year ended December 31, 2010, and paid common stock dividends totaling P180,000 during 2010. How much did Reston pay for its 25% interest in Ace?
The entity shall reclassify financial assets when, and only when, an entity changes its business model for managing its financial assets.
Fogelberg Company purchased equipment for P12,000. Sales tax on the purchase was P600. Other costs incurred were freight charges of P240, repairs of P420 for damage during installation, and installation costs of P270. What is the cost of the equipment?
On the loss of significant influence, the investor shall do any of the following, except
Which of the following should be disclosed in a summary of significant accounting policies? I. Management's intention to maintain or vary the dividend payout ratio. II. Criteria for determining which investments are treated as cash equivalents. III. Composition of the sales order backlog by segment.
Under PAS 40, investment property is defined as
From an investor's point of view, a liquidating dividend from an investee is:
Which is false concerning valuation of cash and cash equivalents?
The following information is available for Barkley Company's patents: Cost P1,720,000 Carrying amount 860,000 Expected future net cash flows 800,000 Fair value 650,000 Barkley would record a loss on impairment of
Using the information in no. 41, what is the cost of sales for the sales on January to March?
The advantage of relating bad debt experience to accounts receivable is that this approach;
The trial balance
The FRSC is the successor of the
Significant influence is the power to control or joint control over the financial and operating policy decisions of the investee.
Under IFRS, how is the account revaluation surplus reported?
When the revaluation model is used for reporting plant, property, and equipment, the gain or loss should be included in
The following are indications that a receivable is impaired except;
The summary of significant accounting policies should disclose the
Under PFRS, which of the following is a criterion that must be met in order for an item to be recognized as an intangible asset other than goodwill?
An investor uses the cost method to account for investment. Dividends received in excess of the investor's share of investee's earnings subsequent to the date of investment.
The revaluation model means property, plant and equipment
An intangible asset shall be recognized if I. It is probable that future economic benefits attributable to the asset will flow to the entity. II. The cost of the intangible asset can be measured reliably.
The fair value option allows an entity to
Sutherland Company purchased machinery for P320,000 on January 1, 2013. Straight-line depreciation has been recorded based on a P20,000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2017 at a gain of P6,000. How much cash did Sutherland receive from the sale of the machinery?
The major difference between the service life of an asset and its physical life is that;
ABC Company, operates a plant in a foreign country, it is probable that the plant will be expropriated. However, the foreign government has indicated that ABC will receive a definite amount of compensation for the plant. The amount of compensation is less than the fair market value but exceeds the carrying amount of the plant. The contingency should be reported
Financial information exhibits the characteristics of consistency when
The two major standard-setting organizations in the world are;
Assuming that the ideal measure of short-term receivables in the statement of financial position is the discounted value of the cash to be received in the future, failure to follow this practice usually does not make the statement of financial position misleading because
Which of the following items should be included in the cost of property, plant, and equipment under IAS 16? (M)
Which of the following statements is true for measuring an asset at fair value?
All of the following are included in cash and cash equivalents, except?
Inventories include assets which are held for sale in the ordinary course of business, in the process of production for such sale or in the form of materials or supplies to be consumed in the production process or in the rendering of services.
The process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operations is called;
The primary PFRS related to intangible assets and impairments is found in
What is the treatment of the accumulated depreciation on the date of revaluation? I. Eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset. II. Restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount after revaluation equals the revalued amount.
Where there is a production cycle of more than one year, PAS 41 encourages separate disclosure of the:
Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's stock price?
Which of the following would be classified as a product that is the result of processing after harvest?
The declining-balance method does not deduct the salvage value in computing the depreciation base.
If receivables are hypothecated against borrowings, the amount of receivables involved should be;
Hong Company began business in 2014. An examination of the entity's allowance for bad debts account reveals the following: Estimated bad debts Actual bad debts 2014 550,000 225,000 2015 650,000 350,000 2016 825,000 450,000 2017 No adjustment yet 475,000 In the past, the entity has estimated that 4% of credit sales would be uncollectible. The auditor for Hong Company has determined that the percentage used in estimating bad debts has been inappropriate. The auditor would like to revise the estimate downward to 2%. The entity president has stated that if the previous estimate of bad debt expense is incorrect, the financial statements should be restated using the more accurate estimate. The credit sales for 2017 amounted to P35,000,000. What is the bad debt expense for 2017?
Significant change in the market value of trading securities occurring after the balance sheet date should
What is an imputed interest?
Which of the following is true for a bond maturing on a single date when the effective interest method of amortizing bond discount is used?
Ferguson Company purchased a depreciable asset for P100,000. The estimated salvage value is P10,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?
The following statements pertain to the cash short or over account. Which statement is true?
Which of the following statements are in accordance with PAS 28? I When the associate has cumulative preference shares, the investor computes its share in the profit or loss of the investee after deducting the preferred dividends, only when such dividends are declared. II When the associate has non-cumulative preference shares, the investor computes its share in the profit or loss of the investee after deducting the preferred dividends,
The debit and credit analysis of a transaction normally takes place;
Which of the following would not be included in the cost of work in process inventory?
Bank overdrafts that are repayable on demand and the bank balance often fluctuates from positive to overdrawn shall be classified as
Under the ___, the petty cash fund is replenished by writing a check equal to the payments that have been made.
Investment in bonds shall be measured subsequently at amortized cost.
Bonds for which the owners' names are not registered with the issuing corporation are called
Which of the following is required before a transfer of receivables can be recorded as a sale?
A proof of cash would be useful for_______.
Morgan Manufacturing Company has the following account balances at year end: Office supplies 4,000 Raw materials 27,000 Work-in-process 59,000 Finished goods 73,000 Prepaid insurance 6,000 What amount should Morgan report as inventories in its statement of financial position?
Number of share increases, but the total value of the shares remain the same
Which is incorrect concerning the reversal of an impairment loss?
Bearer plants that are expected to be used in production of agricultural produce are classified as;
An early extinguishment of bonds payable, which were originally issued at a premium, is made by purchase of the bonds between interest dates. At the time of reacquisition
Notes receivable discounted with recourse should be;
The acquisition cost of a heavily used raw material changes frequently. The book value of the inventory of this material at year-end will be the same if perpetual records are kept as it would be under a periodic inventory method only if the book value is computed under the
Glen Inc. and Armstrong Co. have an exchange with no commercial substance. The asset given up by Glen Inc. has a book value of P12,000 and a fair market value of P15,000. The asset given up by Armstrong Co. has a book value of P20,000 and a fair market value of P19,000. Boot of P4,000 is received by Armstrong Co. What amount should Armstrong Co. record for the asset received?
Groh Co. recorded the following data pertaining to raw material X during January 2016: Date Received Cost Issued On hand 1/1/16 Inventory 8.00 3,200 1/11/16 Issue 16,000 1,600 1/22/16 Purchase 4,000 9.4 5,600 The moving-average unit cost of X inventory at January 31, 2016 is
For purposes of revaluation, if there is no market-based evidence of fair value because of the specialized nature of the item of property, plant and equipment and the item is rarely sold, the estimate of fair value is equal to
Which disclosure is not required with respect to intangible assets?
An intangible asset that was acquired separately shall initially be recognized at
Are the following statements about classification according to PAS 41 Agriculture true or false? I. Sugar should be classified as agricultural produce II. Wool should be classified as agricultural produce.
When an asset's carrying amount is decreased as a result of a revaluation, the decrease shall be
Tony's AutoParts Store is a small retailer. Tony Brown owns the business and has purchased a microcomputer system equipped with bar coding devices. Tony Brown uses the first-in, first-out (FIFO) method to value inventory and is concerned about the impact on inventory valuation of a switch from a periodic inventory system to a perpetual inventory system. Which one of the following statements is correct?
June Corp. sells one product and uses a perpetual inventory system. The beginning inventory consisted of 10 units that cost 20 per unit. During the current month, the company purchased 60 units at 20 each. Sales during the month totaled 45 units for 43 each. What is the number of units in the ending inventory?
Wellness Corp. has outstanding accounts receivable totaling P3 million as of December 31 and sales on credit during the year of P15 million. There is also a debit balance of P12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense
Which of the following cost should not be included in cost to sell?
In the books of the consignor, goods out on consignment should be
Which of the following best describes interest rate swaps?
A plant asset with a five-year estimated useful life and no residual value is sold at the end of the second year of its useful life. How would using the sum-of-the-years'-digits method of depreciation instead of the double-declining balance method of depreciation affect a gain or loss on the sale of the plant asset?
Biological transformation results from asset changes through all of the following, except;
Which of the following should be disclosed in the summary of significant accounting policies?
Shangra-La Company incurred P1,500,000 (P400,000 in 2009 and P1,100,000 in 2010) to develop a computer software product. P500,000 of this amount was expended before technological feasibility was established in early 2010. The product will earn future revenues of P4,000,000 over its 5-year life, as follows: 2010 – P1,000,000; 2011 – P1,000,000; 2012 – P800,000; 2013 – P800,000; and 2014 – P400,000. What portion of the P1,500,000 computer software costs should be expensed in 2010?
If the beginning inventory for 2015 is overstated, the effects of this error on cost of goods sold for 2015, net income for 2015, and assets at December 31, 2016, respectively, are
Which of the following is not an objective evidence of impairment of a financial asset?
Which of the following statements is correct concerning reversal of an impairment loss? I. The increased carrying amount of the asset due to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognized in the prior years. II. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.
When computing the amount of interest cost to be capitalized, the concept of "avoidable interest" refers to
When a customer purchases merchandise inventory from a business organization, she may be given a discount which is designed to induce prompt payment. Such a discount is called aNo
Which of the following is correct?
When capitalizing interest during construction of an asset, an imputed interest cost on stock financing must be included.
It pertains to the debt instruments with maturities ranging between 5 to 10 years. Medium-term notes provide the issuer with flexibility in raising cash by, in effect, arranging for long-term financing at short-term rates.
Which of the following should be reported under the "Other Expenses and Losses" section of the income statement?
This method of estimating the cost of inventories requires the maintenance of records of both cost and selling price wherein cost to retail is calculated ad applied to ending inventory.
When the fair value of the biological asset cannot be determined reliably, the biological assets shall be measures at
For a nonmonetary exchange of plant assets, accounting recognition should not be given to;
Property, plant and equipment are conventionally presented in the balance sheet at
The Andrews Company owns a small manufacturing plant that has just been properly classified as held for sale on the company's balance sheet. Which of the following statements is true?
The following statements relate to revaluation of property, plant and equipment. Which statement is incorrect?
Which is not a major characteristic of property, plant and equipment?
From an investor's point of view, a liquidating dividend from an investee is;
At the middle of the current year, an entity received a one-year note receivable bearing interest at the market rate. The face amount of the note receivable and the entire amount of the interest are due in one year. When the note receivable was initially recorded, which of the following was debited? I Interest receivable II Unearned discount on note receivable
On January 2, 2020, Kent Corp. paid 1,600,000 for the purchase of 40% of the ordinary shares of Kara Company. The statement of financial position of Kara at the date of acquisition shows the following information: Assets subject to depreciation (remaining useful life is 8 years) 2,400,000 Assets not subject to depreciation 800,000 Liabilties 400,000 Both book value and fair value are the same for assets not subject to depreciation and liabilities. The fair market value of Karas assets subject to depreciation is 2,720,000. Kara depreciates its assets using the straight-line method. Karas intangibles are amortized over a 20-year period. Net income for the year ended December 31, 2020, is 640,000. It declares and pays dividends of 500,000 in 2020. What amount of the investment cost is attributable to goodwill?
The Chairman and members of the FRSC shall have a term of renewable for another term.
Biological assets are living animals or plants.
The legal life of a patent is:
When the investor's level of influence changes, it may be necessary to change to the equity method from another method. When the level of ownership rises from less than 20% to a range of 20% to 50%, the equity method would become appropriate and the investment account balance should be:
Which of the following information shall be disclosed in relation to biological assets and agricultural produce?
Use the information above in no. 29, what amount shall be presented on the statement of financial position as at December 31 under the account "Biological Asset"?
Public Accountants usually offer three kinds of services except;
A perfectly faithful representation would be all of the following except:
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
Revaluation of plant asset should be made
Formed by the FRSC in August 2006 to assist the FRSC in establishing and improving financial reporting standards in the Philippines.
On July 1 of the current year, an entity received a one-year note receivable bearing interest at the market rate. The face amount of the note receivable and the entire amount of the interest are due in one year. The interest receivable account would show a balance on;
Is the financial flexibility of an entity to raise money out of its receivables.
According to the Conceptual Framework, an entity's revenue may result from a/an
Bliss Co. uses the equity method to account for its investment in Nirvana, Inc. common stock. How should Bliss record a 2% stock dividend received from Nirvana?
Which of the following is not used as basis on determining the fair value of biological assets:
The cash surrender value of the insurance policy on the corporation's president would be presented on the balance sheet as
A gain or loss arising on the initial recognition of a biological asset and from a change in the fair value less to cost to sell of a biological asset shall be included in
Which of these is not a major characteristic of a plant asset?
On August 1, 2016, Hayes Corporation purchased a new machine on a deferred payment basis. A down payment of P3,000 was made and 4 monthly installments of P2,500 each are to be made beginning on September 1, 2016. The cash equivalent price of the machine was P12,000. Hayes incurred and paid installation costs amounting to P500. The amount to be capitalized as the cost of the machine is
The following statements pertain to accounting for petty cash fund. Which statement is false?
On March 31, 2016, the store inventory of Gotesco was destroyed by fire. The following information was obtained from available records:
Which of the following risks are inherent in an interest rate swap agreement? I. The risk of exchanging a lower interest rate for a higher interest rate. II. The risk of nonperformance by the counter party to the agreement.
A real estate company converts one of its products to property for commercial lease. The entity elected to use the fair value model on recognition of this property. The difference between the fair value and carrying amount of the property shall be recognized in
Which of the following statements regarding cash equivalents is true?
On December 1, 2016, HI Co. purchased a tract of land as a factory site for P800,000. The old building on the property was razed, and salvaged materials resulting from demolition were sold. Additional costs incurred and salvage proceeds realized during December 2016 were as follows: Cost to raze old building P70,000 Legal fees for purchase contract and to record ownership 10,000 Title guarantee insurance 16,000 Proceeds from sale of salvaged materials 8,000 In HI's December 31, 2016 balance sheet, what amount should be reported as land?
Which of the following accounts is not reported in inventory?
Biological assets are presented as ______________ in the Statement of Financial Position.
Which among the following is not considered as a cash equivalent for purposes of a cash flow statement?
Impaired assets held for disposal should be reported at the lower of cost or net realizable value.
DEF Company, a company who uses IFRS reporting standards, sells a non-current asset classified as held-for-sale. Which of the following statements is true regarding the treatment of a gain on a subsequent increase in the fair value less cost?
On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows: January 2, 2016 P200,000 September 1, 2016 600,000 December 31, 2016 600,000 March 31, 2017 600,000 September 30, 2017 400,000 Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017. What were the weighted-average accumulated expenditures for 2017 by the end of the construction period?
The following relate to consumable biological assets: I. livestock intended for the production of meat. II. livestock held for sale. III. trees from which firewood is harvested while the tree remains. IV. crops such as maize and wheat V. trees being grown for lumber VI. fish in farms
Those who have ready access to accounting information for their decision-making needs;
If a corporation purchases a lot and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on
Debit always means
In order for a non-current asset to be classified as held for sale, the sale must be highly probable. "Highly probable" means that
XYZ Industries, a company who uses GAAP reporting standards, is installing a new plant. The company has incurred the following costs 1. Operating losses before commercial production P 200,000 2. Cost of the plant 1,500,000 3. Initial delivery and handling charges 300,000 4. Cost of site preparation 175,000 Which of these costs can XYZ capitalize in accordance with GAAP?
Companies should test indefinite life intangible assets at least annually for:
Which of the following is not considered a cash equivalent?
Postage stamps and IOU's found in cash drawers should be reported
What is the effect of a 50,000 overstatement of last year's inventory on current years ending retained earning balance?
Under IFRS, ABC Company, who has a non-current asset which has been classified as held-for-sale, should
When an entity reclassification a financial asset from amortized cost to fair value through profit or loss, the fair value is determined at reclassification date.
To be consistent with the historical cost principle, overhead costs incurred by an enterprise constructing its own building should be
Plant assets may properly include
After allocating cost in excess of book value, which asset or liability would not be amortized over a useful life?
When the effective-interest method is used to amortize bond premium or discount, the periodic amortization will
The cost of an asset less its salvage value is its depreciation base.
Special journals normally include the following except;
Under the cost model, subsequent to initial recognition as an asset, an item of property, plant and equipment shall be carried at;
If a transfer of receivables with recourse is not classified as a sale, and the proceeds received are less than the net receivables, the difference shall be treated as aNo
A component of an entity is classified as "held for sale" when the component is available for immediate sale and the sale is highly probable. For the sale to be highly probable (choose the incorrect one)
An entity neglected to amortize the premium on outstanding bonds payable. What is the effect of the failure to record premium amortization on interest expense and bond carrying value, respectively?
If there is any excess of the investors share of the net fair value of the associates identifiable assets and contingent liabilities over the cost of the investment, that is, negative goodwill, how should that excess be treated?
Net losses on firm purchase commitments for goods for inventory result from a contract price that exceeds the current market price. If a firm expects that losses will occur when the purchase is effected, expected losses, if material, should
Select the incorrect statement.
In the gross method, sales discounts are reported as a deduction from sales.
Long-term debt that matures within one year and is to be converted into stock should be reported
Under PFRS, costs in the development phase are
How can accounting for bad debts be used for earnings management?
An entity neglected to amortize the discount on outstanding bonds payable. What is the effect of the failure to record discount amortization on interest expense and bond carrying value, respectively?
On August 1, 2016, Mendez Corporation purchased a new machine on a deferred payment basis. A down payment of P2,000 was made and 4 annual installments of P6,000 each are to be made beginning on September 1, 2016. The cash equivalent price of the machine was P23,000. Due to an employee strike, Mendez could not install the machine immediately, and thus incurred P300 of storage costs. Costs of installation (excluding the storage costs) amounted to P800. The amount to be capitalized as the cost of the machine is
Use the information above in no. 29, and assume that ten 3-year old cattle were sold realizing net proceeds of P15, 000 on each cattle. How much gross income shall be presented on the company's profit or loss for the year ended December 31?
Ideally, a company should measure receivables in terms of their present value, that is, the discounted value of the cash to be received in the future.
An entity shall assess at each reporting date whether there is an evidence that its receivable or group of receivables is impaired.
Which of the following is not a disadvantage of using the FIFO cost flow assumption?
The exclusive right to benefit from a creative work, such as a film, is a:
Promissory notes may be used except:
What is due process in the context of standard setting at the IASB?
In preparing its December 31, year 2 bank reconciliation, Apex Corp. has available the following information: Balance per bank statement, 12/31/Y2 P18,050 Deposit in transit, 12/31/Y2 3,250 Return of customer's check for insufficient funds 12/31/Y2 600 Outstanding checks, 12/31/ Y2 2,750 Bank service charges for December 100 At December 31, year 2, Apex's correct cash balance is?
Which of the following inventories carried by a manufacturer is similar to the merchandise inventory of a retailer?
Which of the following is (are) external sources of information on impairment of an asset? I. Significant decline in market value of an asset which is more than would be expected as a result of passage of time or normal use. II. Significant changes in technological, market, economic, or legal environment with an adverse effect on the enterprise or in the market to which the asset is dedicated. III. Evidence of obsolescence or physical damage of the asset.
Culver Company purchases the majority of its inventory from three primary suppliers for re-sale to customers around the world. Culver Company's statement of financial position will include
Net income is understated if, in the first year, estimated salvage value is excluded from the depreciation computation when using the
It is an unsecured, short-term corporate obligation usually issued at a discount from face value.
If there is evidence that an impairment loss on loan receivable has been incurred, the amount of the loss is equal to the
If market value of an impaired asset recovers after an impairment has been recognized, the impairment may be reversed in a subsequent period.
Which of the following concepts relates to using the allowance method in accounting for accounts receivable?
Which of the following intangible assets should be shown as a separate item on the statement of financial position?
Which of the following is not one of the basic questions that must be answered before the amount of depreciation charge can be computed?
Carrying amount is the I. Amount at which an asset is recognized in the balance sheet after deducting any accumulated depreciation and accumulated impairment loss II. Cost of an asset or other amount substituted for cost in the financial statements less its residual value.
An unconditional government grant related to a biological asset that has been measured at fair value less costs to sell should be recognized as
It is a predetermined amount withheld by a factor as a protection against customer returns allowances and other special adjustments.
Tracing shipping documents to pre-numbered sales invoices provides evidence that;
Which of the following items should be included in a company's inventory at the statement of financial position date?
Items to be noted in recognizing accounts receivable include the following except;
Fair value is;
Which of the following is not an appropriate basis for measuring the cost of property, plant, and equipment?
Revaluation surplus account is reported as
Long-term notes receivable which nominally bear no interest or an interest which is unreasonably low shall be recognized initially at;
When using the retail inventory method, normal losses, shortage, shrinkage are ____________.
Which of the following statements is not normally an objective of financial reporting?
PFRS and U.S. GAAP are similar in the accounting for impairments of assets held for disposal.
Josh Corporation owns an office building where nine out of ten floors are leased out to a third party under operating lease, while the 10th floor is occupied by Millenium as its head office. What is the proper treatment for this in Josh financial statements?
When property, plant and equipment are recorded at revalued amount, charging depreciation on the appraisal increase to the revaluation surplus is not acceptable because:
Which of the following computations may properly result to the correct amount of share in associates profit or loss for the period?
On September 10, 2016, JKL Co. incurred the following costs for one of its printing presses: Purchase of attachment P55,000 Installation of attachment 5,000 Replacement parts for renovation of press 18,000 Labor and overhead in connection with renovation of press 7,000 Neither the attachment nor the renovation increased the estimated useful life of the press. However, the renovation resulted in significantly increased productivity. What amount of the costs should be capitalized?
Economic factors that shorten the service life of an asset include
The proceeds from bonds issued with nondetachable share warrants shall he accounted for
Costs incurred subsequent to the acquisition of an asset are capitalized if they provide future benefits.
Tay Corp. factored P400,000 of accounts receivable to Rick Corp. on July 1, year 2. Control was surrendered by Tay. Rick accepted the receivables subject to recourse for nonpayment. Rick assessed a fee of 2% and retains a holdback equal to 5% of the accounts receivable. In addition, Rick charged 15% interest computed on a weighted-average time to maturity of the receivables of forty-one days. The fair value of the recourse obligation is P12,000. Assuming all receivables are collected, Tay's cost of factoring the receivables would be;
Common internal controls for accounts receivable include the following except:
Which of the following best defines debentures?
Leeper Corporation incurred the following costs in 2010: Acquisition of R&D equipment with a useful life of 4 years in R&D projects P800,000 Cost of making minor modifications to an existing product 140,000 Advertising expense to introduce a new product 700,000 Engineering costs incurred to advance a product to full production stage 600,000 What amount should Leeper record as research & development expense in 2010?
If a note receivable is discounted without recourse
EX Roads sold P50,000 of goods and accepted the customer's P50,000 10% 1-year note receivable in exchange. Assuming 10% approximates the market rate of return, what would be the debit in this journal entry to record the sale?
On January 2, 2016, Rapid Delivery Company traded in an old delivery truck for a newer model. The exchange lacked commercial substance. Data relative to the old and new trucks follow:
Biological assets is to be measured at _____________ both on initial recognition and at the end of each reporting period.
Scary Corp. factored P600,000 of accounts receivable to Brave Corp. on October 1, year 2. Control was surrendered by Scary. Brave accepted the receivables subject to recourse for nonpayment. Brave assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, Brave charged 15% interest computed on a weighted-average time to maturity of the receivables of fifty-four days. The fair value of the recourse obligation is P9,000. Scar will receive and record cash of;
Assets purchased on long-term credit contracts should be recorded at the present value of the consideration exchanged.
After initial recognition, a class of intangible assets, whose fair value can be reliably measured, may be carried in the financial statement
Which of the following accounts is reported in the Equity section statement of financial position?
Proper authorization of write-offs of uncollectible accounts should be approved in which of the following departments?
Which of the following should be considered cash?
Which of the following is not a required disclosure regarding goodwill for each period a company presents a balance sheet?
DEF Co. purchased a P250,000 life insurance policy on the life of one of its key officers. When is the value of this policy an asset of the company?
A complete set of financial statements includes the following items except;
Which is INCORRECT about compensating balance agreement?
PAS 40 (Investment Property) does not apply to;
Which one of the following is not a component of the cost of internally generated intangible asset?
If the asset's carrying amount is increased as a result of a revaluation, the increase shall be
On the part of the shareholders, special assessment are recorded as additional cost of the investment and on the part of the entity as share premium.
The international financial reporting environment includes challenges in financial reporting including all of the following except;
_____________ is comprised of growth, degeneration, production, and procreation that cause qualitative or quantitative changes in a biological asset
Information regarding inventories that should be disclosed in the financial statements or notes
If the cash balance shown on entity's accounting records is less than the correct cash balance and neither the entity nor the bank has made any errors, there must be______.
If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as
At the beginning of the current year, an entity had capitalized cost for a new computer software product with an economic life of five years. Sales for the current year were 30 percent of expected total sales of the software. However, the pattern of future sales cannot be measured reliably. At year-end, the software had a net realizable value equal to 90 percent of the capitalized cost. What percentage of the original capitalized cost should be reported as the net amount at year-end?
Cash equivalents would not include short-term investments in
The financial statements for year one will include the following information
The entry to record the amortization of a premium on bonds payable is
Required disclosure for property, plant, and equipment in the financial statements is based upon
When using the periodic inventory system, which of the following generally would not be separately accounted for in the computation of cost of goods sold?
This is a formal unconditional promise made under seal to pay a specified sum of money at a determinable future date, and to make periodic interest payments at a stated rate until the principal amount is paid.
The carrying amount of property, plant and equipment subsequent to acquisition is the
When computing for its share in the associates profit or loss, an investor shall use
Mendenhall Corporation constructed a building at a cost of P10,000,000. Average accumulated expenditures were P4,000,000, actual interest was P600,000, and avoidable interest was P300,000. If the salvage value is P800,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is
Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 200 units that cost 65 each. During the month, the company made two purchases: 300 units at 68 each and 150 units at 70 each. Chess Top also sold 500 units during the month. Using the FIFO method, what is the amount of cost of goods sold for the month?
Which of the following disclosures is not required in relation to property, plant and equipment?
It is a financial instrument that derives its value from another underlying item such as a share price, exchange rate or interest rate.
Shares received in lieu of cash dividend are recorded as
A revaluation decrease
AYL Inc. recognized a loss in 2015 related to long-lived assets that it intended to sell. These assets were not sold during 2016, and the company estimated, at December 31, 2016, that the loss recognized in 2015 had been more than recovered. On the December 31, 2016 balance sheet, AYL should report these long-lived assets at their
An asset meets the identifiability criterion in the definition of an intangible when I. It is separable, meaning the asset is capable of being separated from the entity and sold, transferred licensed, rented or exchanged. II. It arises from contractual or other legal rights regardless whether or not those rights are transferable or separable from the entity or from other rights and obligations.
Which of the following nonmonetary exchange transactions represents a culmination of the earning process?
On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows: January 2, 2016 P200,000 September 1, 2016 600,000 December 31, 2016 600,000 March 31, 2017 600,000 September 30, 2017 400,000 Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017. The interest capitalized for 2016 was:
An investor in equity securities received cash dividends in excess of the investors share of investees earnings subsequent to the date of the investment. How will the investors investment account be affected by those dividends for each of the following investments?
Sun Inc. factors P2,000,000 of its accounts receivables without guarantee (recourse) for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. What would be recorded as a gain (loss) on the transfer of receivables?
It refers to the face value of the note.
The trial balance will not balance when a company
Other financial assets excluded from the scope of PAS 39 and addressed under other PFRS are the following except:
Represent the rules, procedures, practice and standard followed in the preparation and presentation of financial statements.
This form of joint venture maintains own records and prepares and presents financial statements in accordance with GAAP.
________________ is a decrease in the selling price over the original retail price.
All of the following are true regarding the revaluation model allowed under iGAAP except;
These statements are referred to in the Standard as "financial statements".
The same recoverability test that is used for impairments of property, plant, and equipment is used for impairments of indefinite-life intangibles.
The entry to replenish the petty cash fund for P100 of various minor expenditures would include a____?
Which of the following best describes a trial balance?
An exclusive right or privilege received by a business or individual to perform certain business functions or use certain products or services is referred to as
S1. In applying the cost vs. net realizable value test, it is relevant to consider the form in which the inventories will be sold which means that materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. S2: A broad-brush approach that looks at inventories in large categories would not meet the requirements of PAS 2, because losses in value of individual items of inventory would be masked by unrealized gains on others.
Which of the following is included in the normal journal entry to record the collection of accounts receivable previously written off when using the allowance method?
An example of an inventory accounting policy that should be disclosed is the
An example of an item which is not a liability is
Investments that are acquired in accordance with a financial policy looking to the accumulation of funds for such purposes as plant expansion.
It refers to any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities
The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Which of the following cost shall be included in the cost of inventories?
Subsequent expenditure relating to an item of property, plant and equipment should be added to the carrying amount of the asset when it is
Which of the following statements is correct concerning reversal of an impairment loss? I. The increased carrying amount of the asset due to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognized in the prior years. II. An impairment loss recognized for goodwill shall not be reversed in a subsequent period.
Which statement is incorrect concerning the class of property, plant and equipment to be revalued?
All of the following are cash equivalents, except;
On January 2, year 1, Emo Co. sold equipment with a carrying amount of P480,000 in exchange for a P600,000 noninterest-bearing note due January 2, year 4. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type at January 2, year 1, was 10%. The present value of P1 at 10% for three periods is 0.75. In Emo's year 1 income statement, what amount should be reported as gain (loss) on sale of machinery?
PAS 28 applies to which of the following?
Use the same information on no. 27 above, what amount shall be included in gross income of MG Farm as a result of the transactions on its dairy livestock?
Of the following items, which would be included in cash on hand and classified as a current asset? A. Negotiable checks B. Certificates of deposit C. Bank drafts D. Coins and currency
Glen Inc. and Armstrong Co. have an exchange with no commercial substance. The asset given up by Glen Inc. has a book value of P12,000 and a fair market value of P15,000. The asset given up by Armstrong Co. has a book value of P20,000 and a fair market value of P19,000. Boot of P4,000 is received by Armstrong Co. What amount should Glen Inc. record for the asset received?
A corporation issues for cash P8,000,000 of 8%, 30-year bonds, interest payable semiannually. The amount received for the bonds will be
On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows: January 2, 2016 P200,000 September 1, 2016 600,000 December 31, 2016 600,000 March 31, 2017 600,000 September 30, 2017 400,000 Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017. What were the weighted-average accumulated expenditures for 2016?
When an entity has acquired a "passive interest" in another entity, the acquiring entity should account for the investment
One of the basic features of financial accounting is the
The inventory account of Nike Trading at December 31, 2016 included the following items: Good purchased in transit, FOB Shipping point 130,000 Merchandise out on consignment at sales price (including markup on 30% cost) 104,000 Goods held on consignment 56,000 Goods out on approval, at sales price (cost, 25,000) 32,500 The inventory at December 31, 2016 should be reduced by:
This method provides for an equal amount of premium or discount amortization each accounting period.
When an insurance policy has a coinsurance clause, the minimum amount recoverable by the insured is never limited by the;
On December 31, year 1, Jetro Co. received two P10,000 notes receivable from customers in exchange for services rendered. On both notes, interest is calculated on the outstanding balance at the interest rate of 3% compounded annually and payable at maturity. The note from Harty Corp., made under customary trade terms, is due in nine months and the note from Maxwell, Inc. is due in five years. The market interest rate for similar notes on December 31, year 1, was 8%. The compound interest factors are as follows: Future value of P1 due in nine months at 3% = 1.0225 Future value of P1 due in five years at 3% = 1.1593 Present value of P1 due in nine months at 8% = .944 Present value of P1 due in five years at 8% = .680 Jet does not elect the fair value option for reporting its financial assets. At what amounts should these two notes receivable be reported in Jet's December 31, year 1 balance sheet?
Which of the following best describes a swap?
The Standard, PAS 41, applies to agricultural produce only __________ and is measured at ______________.
Under generally accepted accounting principles
The journal entry a company records for the payment of interest, interest expense, and amortization of bond premium is
Messersmith Company is constructing a building. Construction began in 2016 and the building was completed 12/31/10. Messersmith made payments to the construction company of P1,000,000 on 7/1, P2,100,000 on 9/1, and P2,000,000 on 12/31. Average accumulated expenditures were
On January 2, 2016, YCA Corp. replaced its boiler with a more efficient one. The following information was available on that date: Purchase price of new boiler P150,000 Carrying amount of old boiler 10,000 Fair value of old boiler 4,000 Installation cost of new boiler 20,000 The old boiler was sold for P4,000. What amount should YCA capitalize as the cost of the new boiler?
If material, deposits in foreign bank which are subject to foreign exchange restriction shall be classified ______.
Plant assets purchased on long-term credit contracts should be accounted for at
On January 1, 2017, Chan Company's allowance for doubtful accounts had a credit balance of P300,000. During 2017, Chan charged P640,000 to doubtful accounts expense, wrote off P460,000 of uncollectible accounts receivable, and unexpectedly recovered P 120,000 of bad debts written off in the prior year. The allowance for doubtful accounts at December 31, 2017 should be
Dolan Co. received merchandise on consignment. As of March 31, Dolan had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 31 would be
Which of the following statements is true regarding capitalization of interest?
Two independent companies, Hager Co. and Shaw Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained: Hager's Land Shaw's Land Cost and book value P192,000 P120,000 Fair value based upon appraisal 240,000 210,000 The exchange was made, and based on the difference in appraised fair values, Shaw paid P30,000 to Hager. The exchange lacked commercial substance. The new land should be recorded on Shaw's books at
Samson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the straight-line basis. At the end of year 1, independent appraisers determine that the asset has a fair value of P750,000.
Which of the following is not a consideration in determining the useful life of an intangible asset?
Won Company follows the procedure of debiting bad debt expense for 2% of all new sales. Sales for three consecutive years and year-end allowance account balances were as follows: Sales Allowance for bad debts 2015 3,000,000 40,000 2016 2,800,000 60,000 2017 3,500,000 80,000 What is the amount of accounts written off in 2017?
On January 1, 2012, Jordan Inc. acquired 30% of Nico Corp. Jordan used the equity method to account for the investment. On January 1, 2013, Jordan sold 2/3 of its investment in Nico. It no longer had the ability to exercise significant influence over the operations of Nico. How should Jordan have accounted for this change?
Which of the following would be classified as agricultural produce?
Unamortized debt discount shall be reported in the balance sheet of the issuer as a
Non-financial liabilities includes the ff. except;
Which of the following statements about accounting standards is true?
These are the result of statutory requirements imposed by governments and are not considered contractual obligations.
Seldom does the balance of the cash in bank account in the depositor's books agree with the balance appearing in the bank statement at a particular date because of
An item of property, plant and equipment should be recognized as an asset when I. It is probable that future economic benefits associated with the asset will flow to the enterprise. II. The cost of the asset to the enterprise can be measured reliably. (E)
Which of the following best describes the forward rate in a forward contract?
A gain on subsequent increase in fair value less cost to sell of a non-current asset classified as held for sale should:
The required disclosures for the impairment of long-lived assets include all of the following except;
Which is not considered as a cash equivalent?
Insurance on equipment purchased, while the equipment is in transit, is part of the cost of the equipment.
Date on which the payment of dividends is approved by the BOD
An investors share in the losses of an associate equals or exceeds its interest in the associate. Which of the following cannot be undertaken by said investor?
Storm Corporation purchased a new machine on October 31, 2016. A P1,200 down payment was made and three monthly installments of P3,600 each are to be made beginning on November 30, 2016. The cash price would have been P11,600. Storm paid no installation charges under the monthly payment plan but a P200 installation charge would have been incurred with a cash purchase. The amount to be capitalized as the cost of the machine on October 31, 2016 would be
An entity purchased bonds at a discount on the open market as an investment and intends to hold these bonds to maturity. The entity should account for these bonds at
The cost of inventories of a service provider consists primarily of
All of the following may qualify as cash equivalents except;
On July 1, year 1, a company obtained a two-year 8% note receivable for services rendered. At that time the market rate of interest was 10%. The face amount of the note and the entire amount of the interest are due on June 30, year 3. Interest receivable at December 31, year 1, was
Webby uses the average retail method of inventory valuation. The following information are available: Cost Retail January 1 23,000 60,000 Purchases 120,000 220,00 Net markups 20,000 Net markdown 40,000 Total COGAS 143,000 260,000 Sales revenue 180,000 What is the cost to retail ratio:
Information concerning Atis Co.s portfolio of debt securities at December 31, 2019, and December 31, 2020, are shown below. These debt securities were purchased by Atis Co. during 2019. Prior to January 1, 2019, Atis Co. had non investments in debt or equity securities. As of December 31, 2019 Amortized cost Fair value Cloning Co. bonds 493,578 442,800 Blooming Corp. bonds 614,892 613,500 Maalindog, Inc. bonds 917,355 874,200 Totals 2,025,825 1,930,500 Assuming that the above securities are property classified as available-for-sale securities under PAS 39 (Financial Instruments: Recognition and Measurement), the unrealized gain or loss as of December 31, 2020, would;
A deficiency in cash control that may conceal cash shortage through bank-to-bank transactions.
What should happen when the financial statements of an associate are not prepared to the same date as the investors accounts?
Use of the sum-of-the-years'-digits method
Vivo, Inc had net sales in 2017 of P700,000. At December 31, 2016, before adjusting entries, the balances in selected accounts were: accounts receivable P125,000 debit, and allowance for doubtful accounts P1,200 debit. Vivo estimates that 2% of its net accounts receivable will prove to be uncollectable. What is the cash realizable value of the receivables reported on the statement of financial position at December 31, 2017?
If an impairment of property, plant and equipment is indicated, any impairment loss is recorded at an amount equal to the
When a corporation issues bonds, the price that buyers are willing to pay for the bonds does not depend on which of the following below
Valuation of property, plant and equipment in the balance sheet (E)
separate and consolidated financial statements (choose the incorrect)
All but one of the following are required before a transfer of receivables can be recorded as a sale.
If an asset's carrying amount is increased as a result of a revaluation, the increase shall be recognized in
When funds are borrowed to pay for construction of assets that qualify for capitalization of interest, the excess funds not needed to pay for construction may be temporarily invested in interest-bearing securities. Interest earned on these temporary investments should be
If you elect to not take a discount on trade credit, the effective interest rate on the funds thus obtained __________ as the time you take to pay increases
It refers to the amount of cash expected to be collected or the estimated recoverable amount?
Which of the following is true about depreciation accounting?
Bank overdrafts should be reported in the balance sheet as part of?
Which of the following is a characteristic of a perpetual inventory system?
According to IAS 16, a decrease in the carrying amount of a fixed asset that is identified on an asset's first revaluation should be recorded as:
Once recognized, intangible assets can be carried at
Which of the following best describes PFRS and U.S. GAAP?
Receivables, as an asset, normally has
The double-entry accounting system means
Which of the following is a valid statement regarding "assets-held-for sale"?
Cash planning is important because a company wants
In accordance with accounting for transfers and servicing, all of the following would be disclosed except;
The categories of biological assets includes
Accrual accounting is used because
Which of the following terms best describes property held to earn rentals or for capital appreciation?
A promissory note on which the borrower is a bank.
A legal right granted to shareholders to subscribe for new shares issued by a corporation at a specified price during a definite period.
Bojun Company assigned its receivable to Joy Bank on a without-recourse basis. Control was surrendered in the transaction to Joy Bank. Bojun received cash as a result of the transaction, which is best described as;
This refers to the inducements to customers for prompt payment of an account.
Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded?
The possible causes of the inventory cost becoming not recoverable includes
Intangible development costs and restoration costs are part of the depletion base.
All of the following can be classified as cash and cash equivalent, except;
A financial asset is recognized initially at
Which of the following items should properly form part of the Cash account?
This method of estimating inventory cost is based on an assumed relationship between gross profit and sales or between gross profit and cost of sales.
All of the following are true regarding the revaluation model allowed under GAAP except;
Sloan Corporation is performing its annual test of the impairment of goodwill for its Financing reporting unit. It has determined that the fair value of the unit exceeds it carrying value. Which of the following is correct concerning this test of impairment?
Colt Football Co. had a player contract with Watts that is recorded in its books at P3,600,000 on July 1, 2016. Day Football Co. had a player contract with Kurtz that is recorded in its books at P4,500,000 on July 1, 2016. On this date, Colt traded Watts to Day for Kurtz and paid a cash difference of P450,000. The fair value of the Kurtz contract was P5,400,000 on the exchange date. The exchange had no commercial substance. After the exchange, the Kurtz contract should be recorded in Colt's books at;
Dividends shall be recognized at the date of
Which statement is incorrect concerning revaluation of property, plant and equipment?
The units-of-production approach to depreciation is appropriate when depreciation is a function of time instead of activity.
Bonds that pay no interest unless the issuing company is profitable are called
Interest in life insurance contract should be carried at
Hall Co. incurred research and development costs in 2011 as follows: Materials used in research and development projects 450,000 Equipment acquired that will have alternate future uses in future research and development projects 3,000,000 Depreciation for 2011 on above equipment 300,000 Personnel costs of persons involved in research and development projects 750,000 Consulting fees paid to outsiders for research and development projects 300,000 Indirect costs reasonably allocable to research and development projects 225,000 Total 5,025,000 The amount of research and development costs charged to Hall's 2011 income statement should be
According to PAS 16, Property, plant and equipment includes all of the following except
It is a formal claim against another that is evidenced by a written promise, called promissory note, or a written order to pay at a later time, called time draft.
Bonds which give the bondholders the right to exchange their bonds for share capital of the issuing entity at any time prior to maturity.
According to International Financial Reporting Standards, the revaluation of equipment when fair value exceeds book value, results in:
It is otherwise known as general assignment of accounts receivable
In relation to the impairment of assets, IAS 36 Impairment of Assets, requires the following disclosures for each class of assets: I. The line of the income statement in which impairment losses are included. II. The amount of reversals of impairment losses during the period. III. The amount of impairment losses recognized directly in equity. IV. The beginning and ending balances of any 'provision for impairment' account.
Which of the following should be amortized over the periods of estimated benefit?
If a depreciable property is revalued in the middle of the current fiscal year how is the depreciation expense for the year (assuming the company has a calendar year-end) determined?
On April 1, 2015, Verlin Co. purchased new machinery for P240,000. The machinery has an estimated useful life of five years, and depreciation is computed by the sum-of-the-years'-digits method. The accumulated depreciation on this machinery at March 31, 2017, should be
Equity is not affected by all
As defined by PAS 38, how are intangible assets unlike other assets?
The fair value at initial recognition is
The residual value of an intangible asset with a finite life shall be assumed zero, unless I. There is a commitment by a third party to purchase the asset at the end of its useful life. II. There is an active market for the asset and the residual value can be determined by reference to that market and it is probable that such market will exist at the end of the asset's useful life.
The percentage specified on the note on an annual basis.
A debit balance in the allowance for doubtful accounts
An air-conditioning unit was installed in the ambulance used by a hospital. This type of expenditure is a (an)
Green Co. received merchandise on consignment. As of January 31, Green included the goods in inventory, but did not record the transaction. The effect of this on its financial statements for January 31 would be
After initial recognition, an item of PPE may be carried in the books;
Is the universal language of business.
Which is INCORRECT concerning the qualitative characteristics of financial statements?
Culver Company purchases the majority of its inventory from three primary suppliers for re-sale to customers around the world. Culver Company's statement of financial position will include?
For the sale of a non-current asset held for sale to be highly probable (choose the incorrect one)
Which is not a current fund?
The standard requires that companies assess their receivables for impairment each reporting period and begin the impairment assessment by considering whether objective evidence indicates that one or more loss events have occurred.
When bond investment is held for "trading" or measured at fair value through profit or loss, it is necessary to amortize any premium or discount.
Which of the following statements regarding inventory accounting systems is true?
Dole Corp.'s accounts payable at December 31, 2015, totaled 800,000 before any necessary year-end adjustments relating to the following transactions: On December 27, 2015, Dole wrote and recorded checks to creditors totaling 350,000 causing an overdraft of 100,000 in Dole's bank account at December 31, 2015. The checks were mailed out on January 10, 2016. On December 28, 2015, Dole purchased and received goods for 150,000, terms 2/10, n/30. Dole records purchases and accounts payable at net amounts. The invoice was recorded and paid January 3, 2016. Goods shipped f.o.b. destination on December 20, 2015 from a vendor to Dole were received January 2, 2016. The invoice cost was 65,000. At December 31, 2015, what amount should Dole report as total accounts payable?
In accordance with ASC Topic 360, long-lived assets are required to be reviewed for impairment
Assuming that the ideal measure of short-term receivable in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because
Investments in long term funds shall be carried at the
Which of the following is considered "cash"?
An exclusive 20-year right to manufacture a product or use a product is a:
The following information are made available by MG Farms of its dairy livestock: Carrying amount, 1/1 450,000 FV less cost to sell of livestock purchased during the period 250,000 Increase in FV less cost to sell attributable to physical change 220,000 Increase in FV less cost to sell attributable to price change 64,000 Total selling price less cost to sell of livestock sold during the period 290,000 At what amount should the biological assets be carried on the statement of financial position as at 12/31?
Transaction costs directly attributable to the issuance of shares include following, except
A revaluation increase is credited to
It is defined as a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis
When the stated rate is equal to the market rate, the note is at (a)
Amortization of an intangible asset with a finite useful life shall commence when
Equity investments acquired by an entity which are accounted for by recognizing unrealized holding gains or losses as other comprehensive income and as a separate component of equity are
Peachy Co. uses the installment sales method to recognize revenue. Customers pay the installment notes in twenty-four equal monthly amounts, which include 12% interest. What is an installment note's receivable balance six months after the sale?
Losses recognized currently, due to market decline, that are connected with purchase commitments should be
Unreleased checks (checks drawn before balance sheet date but held for later delivery to creditors) should be
The frequency of revaluations of property, plant and equipment depends upon the movements in the fair value of the items of property, plant and equipment. If the items of property, plant and equipment experience insignificant movements in fair value, revaluation may be sufficient if made every
If the excess of the acquisition cost of an investment accounted for under equity method over the book value of net assets acquired is attributable to an undervalued depreciable asset and an unidentifiable asset, which of the following statements is correct
Which of the following may provide evidence of significant influence even if the percentage of ownership interest is less than 20%? I Representation on the board of directors or equivalent governing body of the investee. II Participation in policy-making processes, including participation in decisions about dividends or other distributions. III Material transactions between the investor and the investee. IV Interchange of managerial personnel. V Provision of essential technical information.
An entity shall classify an non-current asset as held for sale if
Inventories shall be measured at ___________ of cost and net realizable value at the financial statements.
hen an asset's carrying amount is decreased as a result of a revaluation, the decrease shall be
When the equity method is used to account for investments in common stock, which of the following affects the investors reported investment income?
If a company uses the periodic inventory system, what is the impact on net income of including goods in transit f.o.b. shipping point in purchases, but not ending inventory?
The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the
The following statements related to agricultural produce. Which statement is correct? I. In all cases, an entity shall measure agricultural produce at the point of harvest at fair value less cost to sell. II. PAS 41 reflects the view that the fair value of agricultural produce at the point of harvest can always be measured reliably.
Which of the following statement is incorrect regarding receivables on the statement of financial position?
Bank reconciliation are normally prepared on a monthly basis to identify adjustments needed in the depositor's records and to identify bank errors. Adjustments on the part of the depositor should be recorded for_______.
On July 1 of the current year, an entity received a one-year note receivable bearing interest at the market rate. The face amount of the note receivable and the entire amount of the interest are due in one year. The interest receivable account would show a balance on
The market price of a bond issued at a discount is the present value of its principal amount at the market rate of interest
Which of the following most accurately reflects the concept of depreciation as used in accounting?
Which of the following authoritative iGAAP guidance specifically addresses issues related to cash?
The four principal qualitative characteristics that make information in financial statements useful to investors identified within The Framework are:
The cost of inventory shall be measured using
Subsequent to initial recognition, investment property shall be measured at;
Equity method shall cease to be applied only when the investor loses significant influence over the associate. Which of the following is not true?
An asset that is purchased with the expectation that this asset will be beneficial in the near future.
The periodic inventory method is most commonly used by companies
If the fair value less cost to sell cannot be determined
Bonds that are secured by investment in equity securities are called
Cash equivalents are
An entity provided the following assets in a plantation forest: Freestanding trees 5,000,000 Land under trees 600,000 Roads in forest 300,000 Animals related to recreational activities 1,000,000 Bearer plants 1,500,000 Bearer animals 2,000,000 Agricultural produce growing on bearer plants 800,000 Agricultural produce harvested 1,200,000 What amount should be classified as biological asset?
Information concerning Atis Co.s portfolio of debt securities at December 31, 2019, and December 31, 2020, is shown below. These debt securities were purchased by Atis Co. during 2019. Prior to January 1, 2019, Atis Co. had non investments in debt or equity securities. As of December 31, 2019 Amortized cost Fair value Cloning Co. bonds 493,578 442,800 Blooming Corp. bonds 614,892 613,500 Maalindog, Inc. bonds 917,355 874,200 Totals 2,025,825 1,930,500 Assuming that the above securities are property classified as available-for-sale securities under PAS 39 (Financial Instruments: Recognition and Measurement), the unrealized gain or loss as of December 31, 2020, would.
The cost of inventory pledged as collateral for 90-day loan should be reported in the balance sheet as
The percentage-of-receivables approach of estimating uncollectible accounts emphasizes matching over valuation of accounts receivable.
Which of the following is a characteristic of a financial instrument?
Which of the following statements in relation to non-current asset held for sale is true? I. An asset that meets the criteria for classification as held for sale after the end of the reporting period but before the authorization of the financial statements shall be measured in the statement of financial position at the lower of carrying amount and fair value less cost to sell. II. To be classified as asset held for sale, the sale must be expected to be completed within 12 months from the end of the financial year.
Money given/paid to stockholders
Use the information above in no. 29, how much shall be taken to profit or loss as a gain arising from change in fair value due to price change?
Worthington Chandler Company purchased equipment for P10,000. Sales tax on the purchase was P500. Other costs incurred were freight charges of P200, repairs of P350 for damage during installation, and installation costs of P225. What is the cost of the equipment?
Assets classified as Property, Plant, and Equipment must be both long-term in nature and possess physical substance.
The determination of the value or settlement amount of a derivative involves a calculation which uses: I. An underlying. II. A notional amount.
It pertains to the total amount due on the note at maturity date.
Moon Inc assigns P1,500,000 of its accounts receivables as collateral for a P1 million loan with a bank. The bank assesses a 3% finance fee and charges interest on the note at 6%. What would be the journal entry to record this transaction?
Assume that employees confessed to a $500,000 inventory theft but are not able to make restitution. How should this material fraud be shown in the company's financial statements?
Compensating balances represents;
On February 1, 2010, Henson Company factored receivables with a carrying amount of P300,000 to Agee Company. Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Henson Company for February. Assume that Henson factors the receivables on a without guarantee (recourse) basis. The loss to be reported is;
If an investors ownership interest in an associate is reduced but significant influence is not lost
Philip, Inc. acquires 10% of Erwin Corporation on January 1, 2012, for P90,000 when the book value of Erwin was P 1,000,000. During 2012, Erwin reported net income of P215,000 and paid dividends of P50,000. On January 1, 2013, Philip purchased an additional 30% of Erwin for P325,000. Any excess of cost over book value is attributable to goodwill with an indefinite life. During 2013, Philip reported net income of P320,000 and paid dividends of P50,000. How much is the adjustment to the Investment in Erwin Corporation for the change from the fair-value method to the equity method on January 1, 2013?
General-purpose financial statements are the product of
Is a group of accounts which are systematically categorized into asset, liability, equity, revenue and expense accounts. It is used to accumulate all the effects of the transactions during a period in specific accounts.
After being held for 30 days, a 90-day, 15 percent interest-bearing note receivable was discounted at a bank at 18 percent. The proceeds received form the bank upon discounting would be the:
Hamilton Company purchased a depreciable asset for P200,000. The estimated salvage value is P20,000, and the estimated useful life is 10 years. The straight-line method will be used for depreciation. What is the depreciation base of this asset?
______________ is the process of facilitating the biological transformation by enhancing or stabilizing the conditions necessary for the process to take place.
The purpose of assigning accounts receivable is to;
All the following are differences between financial and managerial accounting in how accounting information is used except to
A depreciable asset has an estimated 15% salvage value. At the end of its estimated useful life, the accumulated depreciation would equal the original cost of the asset under which of the following depreciation methods?
Bearer animals are classified as;
Which item found on a bank reconciliation would not involve an adjustment to the bank statement?
Forester Co. on adoption of PAS 41 has reclassified certain assets as biological assets. The total value of the forest assets is P6.0 million which comprises of freestanding trees (P5.1 million), land under trees (P0.6 million), and roads in forests (P0.3 million). In Forester Co.'s statement of financial position, how much of the forest assets would be classified as biological assets?
Agricultural activity includes all of the following, except;
Pacific Corp. uses a perpetual inventory system. At year-end, Pacific inventory account had a balance of P3, 680, 000, as against a completed physical inventory indicating foods on hand to cost only P3, 610, 000. Pacific should
An issuer of bonds uses a sinking fund for the retirement of the bonds. Cash was transferred to the sinking fund and subsequently used to purchase investments. The sinking fund
Pat Company incurred costs to modify its building and rearrange its production line. As a result, an overall reduction in production costs is expected. However, the modifications did not increase the building's market value and the rearrangement did not extend the production line's life. What is the treatment of the costs incurred?
The factors that are considered in determining the useful life of an intangible asset include all of the following, except;
The following are explicitly excluded in the scope of PAS 41
Usually, an investment of 20 to 50 percent in another company's voting stock is reported under the:
Which of the following would not be reported as inventory?
IAS 16 require that revaluation surplus resulting from initial revaluation of property, plant and equipment should be treated in which of the following way?
Under U.S. GAAP, impairment losses
Which of the following is a note that is not paid in full at maturity?
When an entity increases its interest in an investment in equity securities accounted for by the fair value method and changes to the equity method. What is the initial carrying amount for purposes of subsequent application of the equity method?
For a bond issue which sells for less than its par value the market rate of interest is
If the balance shown on an entity's bank statement is less than the correct cash balance and neither the entity nor the bank made any errors, there must be?
On July 1, 2017, an entity obtained a two-year 8% note receivable for services rendered. At that time, the market rate of interest was 10%. The face amount of the note and the entire amount of interest are due on June 30, 2019. Interest receivable on December 31, 2017 was
As a benchmark treatment, subsequent to initial recognition as an asset, an item of property, plant and equipment should be carried at
In its financial statements, Pulham Corp. uses the equity method of accounting for its 30% ownership of Angles Corp. At December 31, 2010, Pulham has a receivable from Angles. How should the receivable be reported in Pulham's 2010 financial statements?
Under the effective-interest method of bond discount or premium amortization, the periodic interest expense is equal to
After being held for 30 days, a 90-day 10% interest bearing note was discounted at a bank at 12%: Discount will be based on;
Archer Company purchased equipment in January of 2006 for P90,000. The equipment was being depreciated on the straight-line method over an estimated useful life of 20 years, with no salvage value. At the beginning of 2016, when the equipment had been in use for 10 years, the company paid P15,000 to overhaul the equipment. As a result of this improvement, the company estimated that the useful life of the equipment would be extended an additional 5 years. What should be the depreciation expense recorded for this equipment in 2016.
If an entity has a calendar year-end and a depreciable property is revalued at the middle of the current year, how is the depreciation expense for the year determined?
Which of the following statements regarding revaluation of asset is incorrect?
_____________ comprises growth, degeneration, production, and procreation that cause qualitative or quantitative changes in a biological asset.
Which of the following is not a required disclosure regarding intangible assets in the period a company acquires intangible assets?
Which of the following is not correct in regard to trading investments?
Companies that are listed on a stock exchange are required to submit their financial statements to the
A secured bond would require
During 2016, Kimmel Co. incurred average accumulated expenditures of P400,000 during construction of assets that qualified for capitalization of interest. The only debt outstanding during 2016 was a P500,000, 10%, 5-year note payable dated January 1, 2014. What is the amount of interest that should be capitalized by Kimmel during 2016?
Laugh Co. purchased from Oak Co. a P20,000, 8%, five-year note that required five equal annual year-end payments of 5,009. The note was discounted to yield a 9% rate to Laugh. At the date of purchase, Laugh recorded the note at its present value of P19,485. Laugh does not elect the fair value option for reporting its financial liabilities. What should be the total interest revenue earned by Leaf over the life of this note?
If a company scraps an asset without any cash recovery, it recognizes a loss equal to the asset's book value.
Which of the following controls most likely would assure that all billed sales are correctly posted to the accounts receivable ledger?
Michael owns 10% of the common stock of Maine Co. throughout the year. Maine Co. has no preferred stock outstanding. Michael as stock gives him the right to
Which of the following is not true of the perpetual inventory method?
Adjustments to the carrying amount of the investment in associate may be necessary for changes in the investors proportionate interest in the investee arising from changes in the investees equity that have not been recognized in the investees profit or loss. Which of the following may not necessitate an adjustment to the investment in associate account?
The cost of a nonmonetary asset acquired in exchange for another nonmonetary asset and the exchange has commercial substance is usually recorded at
If the fair value of the biological asset previously measured at cost less accumulated depreciation, becomes reliably measurable
When the revaluation surplus is realized because of the use of the asset by the enterprise or disposal of the asset, it may be transferred directly to
Agricultural produce is the harvested product of the entity's biological assets.
Which of the following best describes a cash over or a short account?
________________ is the management by an entity of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets.
Which is not a required disclosure in relation to inventory?
Which of the following is a characteristic of intangible assets?
When the market rate of interest was 11%, Welch Corporation issued P100,000, 8%, 10-year bonds that pay interest semiannually. Using the straight-line method, the amount of discount or premium to be amortized each interest period would be
It is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Partnership A advances P1 million to Corporation B to perform research and development. The terms of the agreement specify that B must repay the funds upon successful completion of the project. Partnership A accounts for the P1 million as
The accounting term "book value" is best described as which of the following?
This is defined as the plan of organization and all the methods and measures adopted within an entity to safeguard assets, check the accuracy of accounting data, promote operational efficiency, and encourage adherence to managerial policies
Cash equivalents do not include short-term investments in
Which of the following accurately describes the appropriate accounting for goodwill acquired through a business combination?
Which the basic purpose of the Conceptual Framework for Financial Reporting?
If the cash balance shown in a company's accounting records is more than the correct cash balance and neither the company nor the bank has made any errors, there must be
In accordance with PFRS 9, bond investments are recognized initially at fair value plus transaction cost that are directly attributable to the acquisition.
Justin Corporation has investment property that is held to earn rental income. Justin prepares its financial statements in accordance with PFRS. Justin uses the fair value model for reporting the investment property. Which of the following is true?
Pike Co. purchased a machine on July 1, 2016, for P400,000. The machine has an estimated useful life of five years and a salvage value of P80,000. The machine is being depreciated from the date of acquisition by the 150% declining-balance method. For the year ended December 31, 2016, Pike should record depreciation expense on this machine of
Bonds Payable has a balance of P1,000,000 and Premium on Bonds Payable has a balance of P8,000. If the issuing corporation redeems the bonds at 101, what is the amount of gain or loss on redemption?
Is composed of individual practitioners, small accounting firms and large multi-national organizations that render independent and expert financial services to the public.
The key characteristic for the classification of an asset as 'held for sale' is that the carrying amount of the asset must:
Lanky Company has the following account balances at year-end: Accounts receivable 60,000 Allowance for doubtful accounts 3,600 Sales discounts 2,400 Lanky should report accounts receivable at a net amount of
A transaction whereby the outstanding shares are called in and replaced by a larger number, accompanied by a reduction in the par or stated value of each share.
When the allowance method of recognizing bad debt expense is used, the allowance for doubtful accounts would decrease when
______________ is an increase in the selling price which does not bring the new selling price below the original retail.
Property, plant and equipment are tangible items that I. Are held for use in production or supply of goods and services, for rental to others or for administrative purposes. II. Are expected to be used during more than one period.
In relation to assets that have been sold during the reporting period, PFRS 5 Non-current Assets Held for Sale and Discontinued Operations, requires disclosure of the following items: I. A description of the non-current asset or disposal group. II. The gain or loss recognized in profit or loss. III. A description of the facts or circumstances of the sale. IV. The segment in which the non-current asset is reported.
Jamison Company purchased the assets of Booker Company at an auction for P1,400,000. An independent appraisal of the fair value of the assets is listed below: Land P475,000 Building 700,000 Equipment 525,000 Trucks 850,000 Assuming that specific identification costs are impracticable and that Jamison allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Trucks?
An impairment loss is the amount by which the carrying amount of the asset exceeds the sum of the expected future net cash flows from the use of that asset.
Biological assets are
Which of the following statements best describes the "carrying amount" of an asset?
For PFRS reporting, what valuation methods are used for intangible assets?
Cash surrender value is classified as
When are dividends recognized as income by an investor in equity securities?
Trading on the equity is
A noncurrent asset that ceases to be classified as held for sale shall be measured at
Which is least likely to be classified as a sale of a component?
If financial assets are exchanged for cash and other consideration but the transfer does not meet the criteria for a sale, the transferor and the transferee should account for the transaction as (I) Secured borrowing and (II) Pledge of collateral
An accounting record where a company initially records transactions and selected other events is called the;
Fences and parking lots are reported on the balance sheet as
Which of the following is considered a sale of receivables?
Which of the following statements is correct?
Information in a company's financial statements is considered to be reliable when it: I is relevant to the decision making needs of users. II represents faithfully the financial position, financial performance and cash flows of the entity. III is neutral. IV is prudent. V reflects the economic substance of transactions, other events and conditions.
A company has a tangible operational asset and company officials are attempting to determine whether the asset needs to be tested for possible impairment of its value. Which of the following would not indicate a need to make such a test?
An entity shall classify a noncurrent asset or disposal group as "held for sale" when
When using the retail inventory method, departmental transfer -in is an _______________.
The following data are given for Ryu Corp: September October November December Cash sales P7,000 P6,000 P8,000 P6,000 Credit sales P50,000 P48,000 P62,000 P80,000 Total sales P57,000 P54,000 P70,000 P86,000 Past experience indicates that credit sales collections normally occur in the following pattern:
A company buys a large truck for P176,000 that should last for eight years. After 5 years, the company spends another P27,000 on this truck for the sole purpose of extending its life by three additional years. How is this expenditure recorded?
If the company is the owner and designated beneficiary of a life insurance policy covering the company's officer, any increase in cash surrender value is
The methods used in estimating doubtful accounts expense includes the following except:
A general journal
When is revenue generally recognized?
Goods purchased in transit which are shipped with terms FOB shipping point should be;
A general description of the depreciation methods applicable to major classes of depreciable assets
Is the successor of the Accounting Standards Council
Investments accounted for under the equity method are initially recognized at
Which statement is incorrect when a venturer reports a jointly controlled operation in its separate and consolidated financial statements? (M)
When the accounting policies used by the investor and the associate do not match
In accordance with IFRS 5, Noncurrent assets held for sale and discontinued operations, an asset should be classified as held for sale when which TWO of the following criteria are satisfied? I. The sale is highly probable. II. The asset has a readily observable market value. III. The sale is expected to be completed within 3 months of the end of the reporting period. IV. The asset is available for immediate sale in its present condition.
Which of the following is not a long-term investment?
While PFRS requires an impairment test at each reporting date for long-lived assets, it requires no such test for intangibles once a legal or useful life has been determined.
What is the normal journal entry for recording bad debt expense under the allowance method?
If a sinking fund is used to purchase securities, the sinking fund
Cost of goods sold is equal to
The process of assigning the costs of intangibles with a limited life to periodic revenue in some systematic manner is called;
Upon the death of an officer, Jung Co. received the proceeds of a life insurance policy held by Jung on the officer. The proceeds were not taxable. The policy's cash surrender value had been recorded on Jung's books at the time of payment. What amount of revenue should Jung report in its statements? (M)
If bonds are initially sold at a discount and the straight line method of amortization is used, interest expense in the earlier years
The focus of government accounting is the custody and administration of;
Trade receivables advances to officers and employees.
Investments that are intended to be held for more than one year or are not expected to be realized within twelve months after the end of the reporting period.
The Folk Arts Development Trading Co. has P1,250,000 appropriated for land acquisition and site development. The accountant should reflect this sum on his financial statement. On the
On December 1, Miser Corporation exchanged 2,000 shares of its P25 par value common stock held in treasury for a parcel of land to be held for a future plant site. The treasury shares were acquired by Miser at a cost of P40 per share, and on the exchange date the common shares of Miser had a fair market value of P50 per share. Miser received P6,000 for selling scrap when an existing building on the property was removed from the site. Based on these facts, the land should be capitalized at
Transaction costs attributable to the acquisition of bond investments held for trading or at fair value through profit or loss are expenses immediately.
Intangible assets are reported on the statement of financial position
On April 1 of the current year, Throw Company factored receivables with a carrying value of P85,000 for P60,000 in cash from Scratch Lenders. The transfer was made without recourse. On April 1, Troubled would;
During self-construction of an asset by Samuelson Company, the following were among the costs incurred:
Generally, the lower of cost and net realizable value test should generally be applied on:
Platteville Corporation has the following account balances at 12/31/10: Amortization expense 10,000 Goodwill 140,000 Patent, net of P30,000 amortization 70,000 What amount should Platteville report for intangible assets on the 12/31/10 balance sheet?
The Conceptual Framework
Like other assets, the cost of a leasehold improvement is allocated as depreciation expense over its useful life to the lessee, which will be: (E)
What does the standard require with respect to accounting for goodwill?
The underlying theme of the conceptual framework is
An active market is a market where all of the following conditions exist, except;
The cost of inventories may not be recoverable under all of the following conditions, except;
____________ is the detachment of produce from a biological asset or the cessation of a biological asset's life processes.
If the fair value less cost to sell is lower than the carrying amount of a noncurrent asset classified as held for sale, the difference is
Rosa Co. uses the gross method to record sales made on credit. On June 10, 2017, it made sales of P100,000 with terms 2/10, n/30 to Fin Farms, Inc. On June 19, 2017, Rosa received payment for 1/2 the amount due from Fin Farms. Rosa's fiscal year end is on June 30, 2011. What amount will be reported in the statement of financial position for the accounts receivable due from Fin Farms, Inc.?
Which of the following costs are not included in costs to sell?
All of the following are problems associated with the valuation of accounts receivable except for
On January 2, 2016, Indian River Groves began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2017. Expenditures for the construction were as follows: January 2, 2016 P200,000 September 1, 2016 600,000 December 31, 2016 600,000 March 31, 2017 600,000 September 30, 2017 400,000 Indian River Groves borrowed P1,100,000 on a construction loan at 12% interest on January 2, 2016. This loan was outstanding during the construction period. The company also had P4,000,000 in 9% bonds outstanding in 2016 and 2017. The interest capitalized for 2017 was:
When a patent or trademark is acquired in a business combination, what does PAS 38 say about recording these intangibles?
Under PFRS 9, all investments in equity must be measured at fair value.
Stock dividends affect the total cost of the investment
On January 1 of the current year, an entity issued bonds at a discount. The entity incorrectly used the straight line method instead of the effective interest method to amortize the discount. How were the following amounts, as of December 31 of the current year affected by the error?
Which of the following items is a component of the cost of an internally-generated intangible assets?
Jae Corporation purchased land for P100,000. Jae is holding the land for future use and appropriately classifies the land as investment property. Jae prepares its financial statements in accordance with PFRS. What valuation model(s) may Jae use to report the land?
Advantages of using historical cost as the basis of valuation of property, plant, and equipment include all of the following except;
Revaluation is based on I. Fair value which is usually the market value of an item of property, plant and equipment. II. Depreciated replacement cost, in the absence of fair value.
Classifying is the sorting or grouping of similar and interrelated economic transactions into their respective classes. It is actually accomplished by
When bonds are acquired on interest date, the purchase price is initially recognized as the acquisition cost
Two independent companies, Hager Co. and Shaw Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained: Hager's Land Shaw's Land Cost and book value P192,000 P120,000 Fair value based upon appraisal 240,000 210,000 The exchange was made, and based on the difference in appraised fair values, Shaw paid P30,000 to Hager. The exchange lacked commercial substance. For financial reporting purposes, Hager should recognize a pre-tax gain on this exchange of
Which of the following are observable inputs used for fair value measurement?
Peterson Company purchased machinery for P160,000 on January 1, 2013. Straight-line depreciation has been recorded based on a P10,000 salvage value and a 5-year useful life. The machinery was sold on May 1, 2017 at a gain of P3,000. How much cash did Peterson receive from the sale of the machinery?
Usually provide a specific dividend that is paid before any dividends are paid to ordinary shareholders.
Wilkinson Corporation factored, with guarantee (recourse), P400,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. What amount of cash would Wilkinson receive on the sale of receivables?
On January 1, 2010, Forbes Company purchased equipment at a cost of P50,000. The equipment was estimated to have a salvage value of P5,000 and it is being depreciated over eight years under the sum-of-the-years'-digits method. What should be the charge for depreciation of this equipment for the year ended December 31, 2017?
Which of the following describes the appropriate accounting for intangible assets with finite useful lives?
When all bonds mature on a single date, they are called;
An entity shall recognize any subsequent increase in fair value less cost to sell of a non-current asset or disposal group classified as held for sale as
When a note receivable is dishonored, it is debited to;
Historical cost is a measurement base used in financial accounting. Which of the following measurement bases is also currently used in financial accounting?
Stock dividends when received are recognized as income
The Mountain Top Corporation owns a large restaurant in Texas. It used to be very profitable but, in recent years, because a new highway was constructed in the area, it has been losing money. This restaurant has a historical cost of P6 million but accumulated depreciation of P2 million so that the book value is P4 million. Despite the recent problems, Mocksville plans to continue operating this restaurant for ten more years. Company officials expect to generate a positive cash inflow each year of P440,000. Those cash flows have a present value of P2.6 million based on an acceptable interest rate. In addition, company officials believe they could sell the restaurant today at a fair value of P3.5 million. Which of the following statements is true?
When the stated rate is greater than the market rate, the note is at (a)
Using the information in no. 37, what total amount should be included in property, plant and equipment?
Which is correct concerning measurement of property, plant and equipment? I. An entity shall choose either the cost model or the revaluation model as its accounting policy and shall apply that policy to an entire class of property, plant and equipment. II. The cost model means that property, plant and equipment are carried at are carried at cost less any accumulated depreciation and any accumulated impairment loss. III. The revaluation model means that property, plant and equipment revalued amount, being the fair value at date of revaluation less any subsequent accumulated depreciation and accumulated impairment loss.
Which of the following is true for properties that comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes? I. If the portions could not be sold separately, the property is owner occupied property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. II. If the portions could be sold separately (or leased out separately under a finance lease), an entity accounts for the portions separately
Samson Company applies revaluation accounting to plant assets with a carrying value of P800,000, a useful life of 4 years, and no salvage value. Depreciation is calculated on the straight-line basis. At the end of year 1, independent appraisers determine that the asset has a fair value of P750,000. The entry to record depreciation for this same asset in year two will include a
Which is incorrect concerning acquisition of an intangible asset as part of a business combination?
Avoidable interest is the amount of interest cost that a company could theoretically avoid if it had not made expenditures for the asset.
I. IFRS 5 sets out detailed requirements for the prominent presentation of amounts relating to non-current assets held for sale, disposal groups and discontinued operations. II. If a non-current asset (or disposal group) meets the criteria to be classified as held for sale after the reporting date but before the financial statements are authorized for issue, no disclosure were required by the standard.
A bond is a debt security because the issuer is a creditor and the bondholder is a debtor.
After initial recognition, an intangible asset shall be carried using the
To keep up this site, we need your assistance. A little gift will help us alot.
Donate- The more you give the more you receive.
Related SubjectFinancial Analysis and Reporting
Consumer and Producer
Retail Sales Surge in October
United States Markets Surge
Genesis Market
Entrepreneurship Information
Strategic Business Analysis
Technical Scientific and Business English
Labor Relations and Negotiations
Intermediate Accounting 3
International Business and Trade
International Issues for Human Resources Management
Information Management
Environmental Marketing
Financial Management
Entrepreneurial Behavior
Credit and Collection
Cost Accounting and Control System
Capital Markets
Technopreneurship
Business Ethics with Good Governance and Social Res
Basic Finance
Advertising
Intermediate Accounting
Social Media Specialist
Marketing
Mass Communication
Social Media Communications and Marketing
Principles of Marketing
Marketing Management
Business Laws and Regulation
Super Micro's Accounting Irregularities
Labor Law and Legislation
Information Technology Practicum
Introduction to Basic Accounting
Investment and Portfolio Management
Internet Marketing and Entrepreneurship
Pricing Strategy and Tactics
Product Management
Personal Finance
Operations Auditing
New Market Development
Monetary Policy and Central Banking
Marketing Research
Managerial Economics
Management Information Systems
Logistics Management
Management Accounting
Macroeconomics Theory and Practice
Introduction to Information Systems
Internet Technology in Real Estate
International Marketing
Income Taxation
Fundamentals of Business Analytics
Fundamentals of Accounting Theory and Practice
Entrepreneurship in Tourism and Hospitality
Franchising
Entrepreneurship
Entrepreneurial Management
Distribution Management
Business Research
Basic Microeconomics
Auditing and Assurance Concepts and Applications
Accounting Information System
Shopee Cashback Voucher
Temu $0 Shipping Fee
Amazon 75% Off Discounts