Cfas Nca & NCL

CFAS THEORIES
1. An entity has a loan due for repayment in six months’ time but the entity has the option to refinance for
repayment two years later. The entity plans to refinance this loan. In which section of the statement of financial
position should this loan be presented?
a. Current Assets
b. Noncurrent Assets
c. Current Liabilities
d. Noncurrent Liabilities
Answer: d
2. Which of the following must be included on the face of statement of financial position?
a. Number of shares authorized
b. Contingent Asset
c. Contingent Liability
d. Investment Property
Answer: d
3. Machinery is classified as.
a. Equity
b. Current Liability
c. Current Asset
d. Noncurrent Assets
Answer: d
4. Which of the following is not classified as noncurrent asset?
a. Machinery
b. Patent
c. Prepayments
d. Equipment
Answer: c
5. Noncurrent assets are classified and presented in which of the following statements?
a. Statement of Financial Performance
b. Statement of Financial Position
c. Statement of Cash Flows
d. Notes to Financial Statements
Answer: b
6. In which section of the statement of financial position should cash that is restricted for settlement of a liability
due 18 months after reporting period be presented?
a. Current Assets
b. Equity
c. Noncurrent Liabilities
Answer: d.
7. Which of the following is usually classified as a noncurrent asset?
a. Supplies
b. Inventories
c. Prepaid Rent
d. Patent
Answer: d.
8. What is the noncurrent asset that is defined as "an asset held by an entity for the accretion of wealth through
capital distribution, such as interest, royalties, dividends and rentals, for capital appreciation or for other benefits
to the investing entity such as those obtained through trading relationships."
a. Land
b. Intangibles
c. Long-term Investments
d. Deferred Tax Assets
Answer: c.
9. Which of the following would be classified as noncurrent liability?
a. Unearned Revenue
b. Long-term obligations to entity officers
c. Currently maturing portion of a long-term debt.
d. Accrued Salaries
Answer: b.
10. Deferred tax assets and liabilities shall be classified as
a. Current
b. Noncurrent
c. Extraordinary
d. Equity
Answer: b.
11. A noncurrent asset that is to be abandoned shall not be classified as held for sale because
a. The carrying amount is recovered principally through continuing use.

b. It is difficult to value.
c. It is unlikely that the current asset is sold within twelve months.
d. It is unlikely that there is an active market for the noncurrent asset.
Answer: a
12. In which section of the statement of financial position should cash that is restricted for the settlement of an
obligation due 18 months after the reporting period be presented?
a. Equity
b. Noncurrent Assets
c. Noncurrent Liabilities
d. Current Liabilities
Answer: b
13. Which of the following must be included as a line item in the statement of financial position?
a. Contingent Asset
b. Property, Plant, and Equipment
c. Deferred Tax
d. Share capital and reserves analyzed by class.
Answer: c
14. Which should be classified as a noncurrent asset?
a. Plant expansion fund
b. Goods in Process
c. Trade payables and accruals for employees and other operating cost
d. Supplies
Answer: a
15. An entity has a loan due for repayment in six-month time but the entity has the option to refinance for
repayment two years later. The entity plans to refinance this loan. In which section of the statement of financial
position should this loan be presented?
a. Noncurrent Liabilities
b. Current Liabilities
c. Either Noncurrent or Current Liabilities, depending on the terms of contract.
d. None because refinanced loans are written off.
Answer: a
16. The following assets are the examples of intangible assets except:
a. Goodwill
b. Patents
c. Trademarks
d. Furniture and fixtures
Answer: d
17. Which of the following is not a necessary attribute of a tangible non current asset:
a. Possibility of selling in the open market without selling the whole business
b. Physical existence
c. Continuing use after the end of current accounting period
d. Use for production / supply, administrative purposes or for letting to others
Answer: d
18. Which of the following is an example of a non-current asset?

a. Cash
b. Accounts Receivable
c. Inventory
d. Buildings
Answer: d
19. Non-current liabilities are reported on a company's:

a. Balance sheets
b. Income statements
c. Cash flow statements
d. Statements of shareholders' equity
Answer: a
20. Non-current liabilities often referred to as:
a. Other long-term provisions
b. Long-terms debts
c. Other long-term financial liabilities
d. Other non-current non-financial liabilities
Answer: b
21. The IFRS Framework addresses the following except:

a. the reporting entity
b. the objective of management accounting
c. the qualitative characteristics of useful information
d. concept of capital and capital maintenance
Answer: b
22. Assets are carried at the amount of cash and cash equivalents that could currently be obtained by selling
an asset in an orderly disposal
a. Present value
b. Current cost
c. Settlement value
d. Historical cost
Answer: c
23. Foundation/skeleton or cornerstone of all accounting standards

a. IFRS Conceptual Framework
b. GAAP
c. PAS
d. CASB
Answer: a
24. The following are non-current liabilities except

a. Deferred tax liability
b. Deferred tax assets
c. Long-term deferred revenue
d. Both a and c
Answer: b
25. PICPA was founded by a group of illustrious pioneers in the accounting profession when:
a. November 1929
b. November 1992
c. May 1931
d. May 1913
Answer: a
26. A firm purchase commitment is an agreement, binding on both parties, that:
I. Specifies all significant terms, including the price and timing of the transactions
II. Includes a disincentive for non-performance, which is sufficiently large to make performance highly probable
III. Is with an unrelated party
a) I and III only
b) I and II only
c) I, II and III all
d) II and III only
Answer: C
27. Recoverable amount is an asset’s:
a) The higher of “fair value less cost to sell” and “value in use”
b) The lower of “fair value less cost to sell” and “value in use”
c) fair value less cost to sell
d) value in use
Answer: A
28.For an asset to be held for sale
I. It must be available for immediate sale in its present condition
II. Its sale must be highly probable
III. The management must be committed to a plan to sell the asset
IV. The management must have an active programme to locate a buyer
V. The asset must be actively marketed for sale
VI. The sale should be expected to be completed within one year from the date of classification
VII. The asset should be fully depreciated
a) I to V only
b) I to IV only
c) I to VI only
d) I to VII all
Answer: C
29. If the criteria are met after the end of reporting period, an undertaking shall:
a) Classify a non-current asset as ‘held for sale’ in those financial statements
b) Classify a non-current asset as ‘discontinued operations’ in those financial statements
c) When those criteria are met, after the end of reporting period, but before the approval of the financial
statements for issue, the undertaking shall disclose the information in the notes
Answer: A
30. If a newly acquired asset is ‘held for sale’, the asset or disposal group will be measured at:
a) Fair value, less costs to sell
b) The higher of “Cost” and “Fair value, less costs to sell’
c) Cost
d) The lower of “Cost” and “Fair value, less costs to sell’
Answer: D
31. Resources held by the business which will not be converted to cash within one accounting period
A. Non current assets
B. Non current liabilities
C. Current Assets
D. Current Liabilities
Answer-a
32. Which of the following is an example of non current asset?
A. Allowance for doubtful accounts
B. Accounts Receivables
C. Equipment
D. Prepaid Insurance
Answer-c
33. Which of the following is not a non current asset?
A. Long term investment
B. Land
C. Building
D. Inventories
Answer-d
34. Which of the following is not an intangible asset?
A. Brand recognition
B. Copy rights
C. Trademark
D. None of the above
Answer- d
35. Assets that are not physically exist but has economic value?
A. Cash
B. Intangible
C. Property, Plant and Equipment
D. Investments
Answer-b
36. The following are classified as noncurrent liabilities except
A. Deferred revenue
B. Mortgage payable
C. Bank account overdrafts
D. Long-term loans
Answer: C. Bank account overdrafts
37. A noncurrent liability becomes a current liability when
A. A portion of the noncurrent liability is paid
B. A portion of the noncurrent liability is due within 12 months or less
C. A portion of the noncurrent liability is discounted
D. None of the above
Answer: B. A portion of the noncurrent liability is due within 12 months or less
38. A noncurrent asset classified as held for sale is to be sold and its book value is higher than the
fair value less cost to sell, the difference is
A. Accounted for as an impairment loss
B. Treated as unrealized loss
C. Debited to unrealized gain
D. Not accounted for
Answer: A. Accounted for as an impairment loss
39. Current and noncurrent presentation of assets and liabilities provides useful information
when the entity
A. Supplies goods or services within a clearly identifiable operating cycle
B. Is a manufacturing company
C. Wants to immediately compare its assets and liabilities
D. Is a government organization
Answer: A. Supplies goods or services within a clearly identifiable operating cycle
40. In the statement of financial position, a non-current asset classified as held for sale should be
presented as a(n)
A. Non-current asset
B. Property, plant and equipment
C. Other noncurrent asset
D. Current Asset
Answer: D. Current asset
41. What is a noncurrent asset?

A. is an asset that is expected to be converted into cash after a year.
B. is an asset that is expected to be converted into cash within a year.
C. is an asset that is expected to be converted into accounts receivable within a year
D. is an asset that is expected to be converted into a liability within a year.
Answer: A
42.Which of the following statements, relating to intangible assets is / are correct?

a) Research on market potential, prior to launching a product, can be capitalised
b) Applied research, calculated to achieve a stated aim, can be capitalised.
c) An asset should never be capitalised if it has no physical existence.
d) A resource, though intangible, may be capitalised, if it qualifies to be capitalised if it is identifiable
and meets the capitalisation criteria
A. B and c
B. A only
C. A & d
D. D only
Answer: D
43. Fixed assets can be categorized into tangible assets, intangible assets and natural resources.
A. True
B. False
C. Maybe
D. Not quite sure
Answer: B
44. How is a non-current liability defined?

A. is a liability that is payable beyond a year or normal operating cycle, whichever is longer.
B. is a liability that is required to be paid within a year or normal operating cycle, whichever is longer.
C. is a liability that can be paid anytime.
D. is a liability that is not required to be paid.
Answer: A
45. Non-current liabilities shall be reported in the Statement of Shareholders' Equity.

A. True
B. False
C. Maybe
D. Not quite sure
Answer: B
46. In which section of the statement of financial position should cash that is restricted for the
settlement of a liability due 18 months after the reporting period be presented?
a. Current assets
b. Equity
c. Noncurrent liabilities
Answer: d
47. An entity has a loan due for repayment in six months' time but the entity has the option to
refinance for repayment two years later. The entity plans to refinance this loan. In which section of
the statement of financial position should this loan be presented?
a. Current liabilities
b. Noncurrent assets
c. Noncurrent liabilities
d. Current assets
Answer: c
48. Which should not be classified as a current asset?
a. A receivable not collectible within one year

b. Current tax asset
c. Goodwill arising in a business combination
d. Premium paid on a bond investment
Answer: c
49. Which should be classified as a noncurrent asset?
a. Supplies
b. Plant expansion fund
c. Goods in process
d. Prepaid rent
Answer: b
50. A financial liability due within twelve months after the reporting period shall be classified as
noncurrent when:
a. It is refinanced on a long-term basis before the issue of financial statements.

b. The entity has no discretion to refinance for at least twelve months.
c. It is refinanced on a long-term basis after the end of reporting period.
d. It is refinanced on a long-term basis on or before the reporting period.
Answer: d
CFAS PROBLEMS
1. The trial balance of Haze Company showed the following account balances at December 31, 2020;
Cash 1,100,000
Accounts Receivable 1,500,000
Inventory 2,400,000
Prepaid Expenses 100,000
Equipment 2,000,000
Accumulated Depreciation 200,000
Patent 500,000
Land held for sale 1,800,000
How much should be presented as total noncurrent assets on the balance sheet?
a. 2,300,000
b. 2,400,000
c. 2,500,000
d. 4,100,000
Answer: a
2. Jomar Company had the following liabilities at December 31, 2020;
Accounts Payable 550,000
Accrued Expenses 200,000
Bonds Payable due 2021 400,000
Deferred Tax Liability 60,500
Credit balances of customers' accounts 100,000
How much is the total noncurrent liabilities?
a. 0
b. 60,500
c. 400,000
d. 460,500
Answer: b
3. Demi Company provided the following information on December 31, 2019:
Accounts Payable, net of creditors' debit balances P200,000. 2,000,000
Bonds Payable due December 31, 2021 4,500,000
Premium on Bonds Payable 500,000
Income Tax Payable 1,100,000
Cash Dividend Payable 600,000
Share Dividend Payable 400,000
Note Payable- 6% due March 1, 2020 1,500,000
Note Payable- 8% due October 1, 2020 1,000,000
The financial statements for 2019 were issued on March 31, 2019.
On December 31, 2019, the 6% note payable was refinanced on a long-term basis.
Under the loan agreement for the 8% note payable, the entity has the discretion to refinance the obligation for at
least twelve months after December 31, 2019.
What amount should be reported as total noncurrent liabilities?
a. 5,500,000
b. 7,500,000
c. 8,000,000
d. 8,400,000
Answer: c
4. Purple Company reported a P5,000,000 noncurrent assets balance on its December 31, 2019 balance sheet. The
following were included in its computation;
Cash Sinking Fund 700,000
Trading Securities 500,000

Equipment 500,000
Land 1,800,000
Patent 300,000
Land held for sale 800,000
Long-term Investment 600,000
Based on the data, what should be the proper amount of noncurrent assets on the December 31, 2019 balance
sheet?
a. 3,700,000
b. 4,200,000
c. 4,500,000
d. 5,000,000
Answer: a
5. Unload Company provided the following account balances at December 31, 2020;
Cash with a sinking fund of 800,000. 1,500,000
Accounts Receivable-assigned 200,000
Accounts Receivable-unassigned 800,000
Trading Securities 400,000
Patent 300,000
Long-term Investments 600,000
Furnitures 150,000
Accumulated Depreciation-Furnitures 40,000
Prepaid Expenses 350,000
Land held for sale 500,000
Land held for future business site 600,000
Equipment 750,000
Accumulated Depreciation-Equipment 350,000

How much is the noncurrent assets at December 31, 2019?
a. 2,210,000
b. 2,810,000
c. 3,110,000
d. 3,810,000
Answer: b
6. ACC Company reported the following liability account balances on December 31, 2019
Accounts Payable Php 2,000,000

Bonds Payable, due December 31, 2020 4,000,000
Discount on Bonds Payable 200,000
Dividends Payable 700,000
Income Tax Payable 900,000
Note Payable, due January 31, 2021 600,000
On December 31, 2019, what total amount should be reported as noncurrent liabilities?
a. Php 1,100,000
b. Php 1,300,000
c. Php 4,200,000
d. Php 1,200,000
Answer: a
7. JPIA company provided the following information on December 31, 2019:

Accounts Payable, net of creditors' debit balances Php 500,000
Bonds Payable
1,200,000
Cash dividends Payable 50,500
Note Payable due August 2020 500,000
On December 31, 2019, the Note Payable was refinanced on a long-term basis. What amount should be reported as
total noncurrent liabilities?
a. Php 1,060,700
b. Php 1,960,700
c. Php 1,560,700
d. Php 1,860,700
Answer: b
8. Stranger Company provided the following information for the current year:
January 1 December 31
Current Assets 700,000 900,000
Property, Plant, and Equipment ? 4,000,000
Current Liabilities 100,000 300,000
Noncurrent Liabilities 1,000,000 ?
Working Capital of Php 600,000 remained unchanged.

Net income for the current year was Php 400,000
A. How much is the noncurrent assets on January 1?

a. Php 3,000,000
b. Php 2,000,000
c. Php 1,000,000
d. Php 900,000
Answer: a
B. How much is the noncurrent liabilities on December 31?

a. Php 1,600,000
b. Php 2,000,000
c. Php 2,100,000
d. Php 1,100,000
Answer: b
9. Terabithia Company provided the following balances at year-end which had been adjusted except for income
tax expense:
Cash 780,000
Accounts Receivable 230,000
Prepaid Expense 100,000
Note Payable – Noncurrent 1,720,000
Billings in excess of cost on long term contracts 720,000
How much should be recorded in total noncurrent liabilities?

a. Php 720,000
b. Php 1,720,000
c. Php 2,440,000
d. Php 1,000,000
Answer: b
10. Zebiana Company reported the following liability balances on December 31, 2017:
20% note payable issued on October 1, 2016, maturing October 1, 2018 Php 2,000,000
22% note payable issued on March 1, 2016, maturing on March 1, 2018 800,000
The 2017 financial statements were issued on March 31, 2018. Under the loan agreement for the 20% note payable
the entity has the discretion to refinance the obligation for at least 12 months after December 31, 2017. On March
1, 2018, the entire Php 800,000 balance of the 22% note payable was refinanced trough issuance of a long-term
obligation lump sum.
What amount of the note payable should be classified as noncurrent on December 31, 2018?
a. 0
b. Php 2,000,000
c. Php 800,000
d. Php 2,800,000
Answer: b
11. Ghorl Company provided the following account balances at year-end:
Taxes Payable – 23, 000

Wages Payable- 245, 000
Accounts Payable- 56,000
Unearned Revenue- 78,000
Bonds Payable – 17,000
Cash sinking fund- 123,000
Land- 67,000
What total amount should be reported as non-current assets at year-end?

a. 0
b. 123,000
c. 190,000
d. 201,000
Answer: c
12. Starla Company reported the following information for the current year:
Finished Goods Inventory, Beginning – 3,000

Finished Goods Inventory, End- 16,000
Sales – 50,000
Gross Profit – 20,000
Land- 34,000
Leasehold right- 5,000

a. 0
b. 43,000
c. 39,000
d. 13.000
Answer: c
13. No Game No Life Company provided the following information for the current year:
Rent Revenue- 34,000

Interest income- 25,000
Sales Return- 24,000
Sales- 50,000
Cost of Goods Sold- 26,000
Furniture- 23,000
Fixtures-4,000
a. 27,000
b. 0
c. 24,000
d. 59,000
Answer: a
14. Ako Lang To Company provided the following account balances at year-end:

Land- 67,000
What total amount should be reported as non-current liabilities assets at year-end?

a. 17,000
b. 123,000
c. 190,000
d. 201,000
Answer: a
15. A Plus-Ka Sis Company provided the following account balances at year-end:

Discounts on bonds payable- 5,000
Land- 67,000
What total amount should be reported as non-current liabilities assets at year-end?

a. 17,000
b. 123,000
c. 190,000
d. 12,000
Answer: d
16. Rain Company had the following liabilities at December 31, 2019;
a. 0
b. 11,500
c. 211,500
d. 561,500
Answer: c
17. Sun Company had the following liabilities at December 31, 2019;

a. 0
b. 11,500
c. 211,500
d. 561,500
Answer: a
18. Soda Company provided the following information for the current year:

Sales- 50,000
Furniture and Fixtures - 59,000
a. 26,000
b. 34,000
c. 59,000
d. 0
Answer: d
19. Breathe Company provided the following balances at December 31, 2020 which had been adjusted except for
income tax expense:
Cash 1,130,000
Bond Payable – due 2022 380,000
Billings in excess of cost on long term contracts 20,000
How much should be recorded in total noncurrent liabilities?

a. 1,700,000
b. 380,000
c. 400,000
d. 1,300,000
Answer: b
20. Rainbow Company provided the following information for the current year:
Sales- 1,050,000
Furniture and Fixtures - 160,000
Land – 1,250,000
a. 1,971,000
b. 1,410,000
c. 1,250,000
d. 0
Answer: b
The following trial balance of Scott Corp. at December 31, 2007 has been properly adjusted except for the income
tax expense adjustment.
Scott Corp.
Trial Balance
December 31, 2007
Dr. Cr.
Cash 775,000
Accounts receivable (net) 2,695,000
Inventory 2,085,000
Property, plant, and equipment (net) 7,366,000
Accounts payable and accrued liabilities 1,701,000
Income taxes payable 654,000
Deferred income tax liability 85,000
Common stock 2,350,000
Additional paid-in capital 3,680,000
Retained earnings, 1/1/04 3,450,000
Net sales and other revenues 13,360,000
Costs and expenses 11,180,000
Income tax expenses 1,179,000
25,280,000 25,280,000
Other financial data for the year ended December 31, 2007:
Included in accounts receivable is 1,200,000 due from a customer and payable in quarterly installments of 150,000.
The last payment is due December 29, 2009.
The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior
year, of which 20,000 is classified as a current liability.
During the year, estimated tax payments of 525,000 were charged to income tax expense. The current and future
tax rate on all types of income is 30%.
In Scott's December 31, 2007 balance sheet,
21. The current assets total is
a. 6,080,000.
b. 5,555,000.
c. 5,405,000.
d. 4,955,000.
Answer- d
22. The current liabilities total is
a. 1,850,000.
b. 1,915,000.
c. 2,375,000.
d. 2,440,000.
Answer- a
23. The final retained earnings balance is
a. 4,451,000.
b. 4,536,000.
c. 4,976,000.
d. 4,905,000.
Answer-c
24. For Nicholson Company, the following information is available:
Capitalized leases 200,000
Trademarks 65,000
Long-term receivables 75,000
In Nicholson’s balance sheet, intangible assets should be reported at
a. 65,000.
b. 75,000.
c. 265,000.
d. 275,000.
Answer- c
25. For Mitchell Company, the following information is available:
Capitalized leases 280,000
Trademarks 90,000
Long-term receivables 105,000
In Mitchell’s balance sheet, intangible assets should be reported at
a. 90,000.
b. 105,000.
c. 370,000.
d. 385,000.
Answer-a
26. On January 6th, 2011 ₱580,000 was paid for a property. The amount includes ₱20,000 for a building located in
the property but in a state of disrepair. The building was refurbished at a cost of ₱30,000 and is used as a store.
The expectation is that the building could remain in use for ten years. In the meantime, because of an urban
revival programme the property’s value is estimated at ₱800,000 as at 31st December 2011. Assuming the use of
straight-line method, the amount of depreciation in 2011 should be:
a) ₱5,000
b) ₱10,000
c) ₱6,000
d) ₱8,000
Answer: A
27. Amabarbigurl manufacturer acquired a machine for ₱50,000 on 1st January 2012 and estimates the economic
life as four years and scrap value as ₱10,000. Calculate the depreciation expense in the first year, if the
depreciation method used is:
*The reducing balance method at 40% per annum of reducing balance
a) ₱13,000
b) ₱14,000
c) ₱18,000
d) ₱16,000
Answer: D
28. Greenzy company operating a minicab service depreciates it vehicles over four years using the sum-of-the
year’s- digits method. Its vehicles were all acquired on 1st March 2011 for ₱180,000, except a mini-bus acquired
for ₱60,000 on 1st April 2012. What is the depreciation charge for the year ended 31st December 2012?
a) ₱23,000
b) ₱75,000
c) ₱60,000
d) ₱90,000
Answer: B
29. A freight hauler acquired a truck for ₱90,000 on 1st January 2010 and another for ₱70,000 on 30th June 2011.
He estimates the economic life of each truck at four years and scrap value as 10% of cost. Calculate the
depreciation charge for the year ended 31st December 2012, if the depreciation method used is:
*The sum of the years' digits method
a) ₱20,000
b) ₱144,000
c) ₱38,250
d) ₱2,000
Answer: C
30. A machine acquired on 1.1.2004 for ₱320,000 is being depreciated using the straight-line method, assuming 20
years economic life and a scrap value of ₱20,000. Calculate the depreciation to be written off in the year ended
31st December 2012, if a review undertaken on 1st January 2012 reveals the need for each of the changes listed
below:
* The depreciation method is changed to the sum of the years digits
a) ₱27,692
b) ₱123,456
c) ₱28,926
d) ₱27,439
Answer: A
31. Yuno Company provided the following information on December 31, 2018
Cash 1,000,000
Notes Receivable 698, 000
Financial Asset held for trading 300,000
Equipment held for sale 150,000
Bond payable 60,000
Deferred tax liability 450,000
What amount should be reported as non current liablities?
A. 510,000
B. 660,000
C. 960,000
D. 450,000
Answer-a
32. On December 31, 2016, Elizabeth Company provided following information
Cash 5,000,000
Prepaid Insurance 100,000
Equipment .2,600,000
Building 3 950, 000
Land 1,050,000
Financial Asset at Fair Value 400,000
Based on the following information, what is the total amount of non current assets?
A. 7,600,000
B. 8,000,000
C. 5,000,000
D. 8, 100,000
Answer-b
33. What is the total amount of non current liabilities given the following information

Bonds Payable 800,000
Discount on Bonds Payable 300,000
A. 900,000
B. 800, 000
C. 700,000
D. 600,000
Answer-d
34. Determine the total amount of non current assets from the following information given by the Marion
Company
Franchise . 100,000
Machinery 300,000
Trademark 200,000
Inventory 400,000
A. 500,000
B. 600,000
C. 900,000
D. 1,000,000
Answer-b
35. Meliodas Company provided following information
Cash 10,000,000

Supplies 400,000
Equipment. 500,000
Patent. 200,00
On December 31, 2018 what will be the total amount of non current asset
A. 600,000
B. 800,000
C. 1,000,000
D. 1,200,000
Answer-a
36. Bumble bee Corp. uses revaluation model to account for their noncurrent assets. The company
classified land as held for sale on December 1, 2018 with the carrying amount of P3,560,000 and
P365,000 cost of disposal. What is the impairment loss of the land on the year 2018?
A. P365,000
B. P356,000
C. P3,195,000
D. P0
Solution:
Carrying Amount P3,560,000
Fair value loss cost of disposal (P3,560,000-P365,000) 3,195,000
Impairment Loss A. P365,000
37. On January 31, 2019, Keto Company purchased a land costing P7,000,000. The fair value of the land
on December 31, 2019 was P9,000,000 and on December 31, 2020 at P11,000,000. The land was later
classified as held for sale. What OCI amount should be recognized in the statement of comprehensive
income for 2020?
A. P4,000,000
B. P2,000,000
C. P3,000,000
D. P1,000,000
Solution:
Fair value 2020 P11,000,000
Fair value 2019 9,000,000
Revaluation Surplus B. P2,000,000
38. ML Inc. had the following account balances in the year 2019, what amount should be reported in the
statement of financial position for noncurrent assets?
Cash and cash equivalents P3,000,000
Long-term Investments 2,000,000
Trading securities 300,000
Intangible Assets 400,000
Inventories 500,000
Other noncurrent assets 200,000
Prepaid expense 50,000
Property, plant and equipment 5,000,000
Trade and other receivables 100,000
Total Assets P11,550,000
A. P7,900,000
B. P7,650,000
C. P11,550,000
D. P7,600,000
Solution:
Long-term Investments P2,000,000
Property, plant and equipment 5,000,000
Intangible Assets 400,000
Other noncurrent assets 200,000
Total noncurrent assets D. P7,600,000
39. On January 1, 2018, an equipment was acquired for P3,000,000 with an estimated useful life of 8 years
and a residual value of P35,000. What is the equipment’s carrying amount in December 31, 2020?
A. P2,965,000
B. P3,035,000
C. P1,888,125
D. P3,000,000
Solution:
Cost P3,000,000
Accumulated depreciation (P3,000,000-P35,000)/8x3 1,111,875
Carrying amount 2020 C. P1,888,125
40. TS Inc. had the following account balances in the year 2019, what amount should be reported in the
statement of financial position for noncurrent liabilities?
Accounts payable P1,300,000
Short-term notes payable 300,000
Bonds payable 50,000
Long-term leases 500,000
Product warranties 70,000
Wages Payable 400,000
Dividends payable 20,000
Total Liabilities P2,640,000
A. P2,640,000
B. P670,000
C. P640,000
D. P620,000
Solution:
Bonds payable P50,000
Long-term leases 500,000
Product warranties 70,000
Total noncurrent liabilities D. P620,000
41. Lady Dutch Corp. bought office equipment. Calculate the cost involved.
Printer –₱2300
Computer –₱2000
Photostat machine –₱8000
Table and chairs –₱5000
A. ₱12300
B. ₱8000
C. ₱4300
D. ₱5000
Answer: A
42. On 1 January 2020, Seri Seta Inc. purchased a machine at a cash price of ₱60000. Other expenditures consisted
of handling cost ₱700, installation cost ₱3000 and delivery cost ₱2000. What is the cost of the machine as of 1
January 2020?
A. ₱3700
B. ₱65700
C. ₱5700
D. ₱63000
Answer: B
43. A ₱1000 bond is being sold for ₱500. How much is the discount/premium?
A. ₱500 premium
B. ₱500 discount
C. ₱300 premium
D. ₱300 discount
Answer: B
44. The following information is available for Compton Company:
• Company XYZ retired ₱45,000 of 9.25% bonds before they were supposed to come due.
• The bonds were retired at 103 (103% of the bond face amount).
• The loss on the retirement was ₱3,100
• Bond interest has been paid up-to-date.
Based on this information, what is the bond book value?
A. ₱43,157
B. ₱41,900
C. ₱46,350
D. ₱43,250
Answer: D
45. The following information is available for Midoriya Company on December 31, 2019:
Accounts Payable-₱5000
Loans Payable(due August 27, 2020)-₱50000
Mortgage Payable-₱30000
Based on the information above, how much is the total non-current liabilities of Midoriya Company as of
December 31, 2019?
A. ₱55000
B. ₱35000
C. ₱80000
D. 30000
Answer: D
46. Mimacaly Company provided the ff. information on December 31,2018:
Inventory 1,000,000
Financial assets held for trading 300,000
Financial assets at fair value through other comprehensive income 900,000
Cash 350,000
Deferred tax asset 250,000
What amount should be reported as noncurrent asset at year-end?
a. 950,000
b. 1,150,000
c. 1,050,000
d. 1,200,000
Answer: b
47. Friendship Company provided the ff. account balances at year-end:
Financial assets at fair value through profit or loss 400,000
Financial assets at amortized cost 1,400,000
Cash 2,000,000
Equipment and furniture 3,500,000
Accumulated depreciation 1,000,000
Equipmen classified as held for sale 2,700,000t
What amount should be reported as noncurrent asset at year-end?
a. 3,900,000
b. 4,300,000
c. 3,850,000
d. 3,700,000
Answer: a
48. Nicson Company reported the ff. liability account balances on December 31,2017
Accounts Payable 1,300,000
Bonds Payable 3,600,000
Discount on bonds payable 400,000
Dividends payable 900,000
Note payable, due January 01,2019
On December 31, 2017, what total amount should be reported as noncurrent liability?
a. 6,500,000
b. 4,720,000
c. 5,340,000
d. 4,400,000
Answer: d
49. Popoy Company provided the ff. account balances on December 31,2016:
Accounts payable 1,900,000
Bonds payable 2,600,000
Note payable, due 2018 1,700,000
What total amount of noncurrent liabilities should be reported?
a. 4,550,000
b. 4,730,000
c. 4,700,000
d. 3,900,000
50. West Company provided the ff. information at year-end:
Accounts payable 550,000
Accrued expense 400,000
At year-end, what amount should be reported as noncurrent liability?
a. 1,180,000
b. 1,030,000
c. 630,000
d. 400,000
Answer: c

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CFAS THEORIES

a. Number of shares authorized

3. Machinery is classified as.

4. Which of the following is not classified as noncurrent asset?

a. Statement of Financial Performance

b. Statement of Financial Position

c. Statement of Cash Flows

d. Notes to Financial Statements

7. Which of the following is usually classified as a noncurrent asset?

d. Deferred Tax Assets

b. Long-term obligations to entity officers

c. Currently maturing portion of a long-term debt.

10. Deferred tax assets and liabilities shall be classified as

a. The carrying amount is recovered principally through continuing use.

18. Which of the following is an example of a non-current asset?

19. Non-current liabilities are reported on a company's:

21. The IFRS Framework addresses the following except:

23. Foundation/skeleton or cornerstone of all accounting standards

24. The following are non-current liabilities except

III. Is with an unrelated party

a) I and III only

c) I, II and III all

d) II and III only

27. Recoverable amount is an asset’s:

c) fair value less cost to sell

28.For an asset to be held for sale

I. It must be available for immediate sale in its present condition

II. Its sale must be highly probable

III. The management must be committed to a plan to sell the asset

IV. The management must have an active programme to locate a buyer

V. The asset must be actively marketed for sale

VII. The asset should be fully depreciated

a) Classify a non-current asset as ‘held for sale’ in those financial statements

b) Classify a non-current asset as ‘discontinued operations’ in those financial statements

a) Fair value, less costs to sell

b) The higher of “Cost” and “Fair value, less costs to sell’

d) The lower of “Cost” and “Fair value, less costs to sell’

A. Non current assets

B. Non current liabilities

32. Which of the following is an example of non current asset?

A. Allowance for doubtful accounts

33. Which of the following is not a non current asset?

A. Long term investment

34. Which of the following is not an intangible asset?

D. None of the above

C. Property, Plant and Equipment

41. What is a noncurrent asset?

42.Which of the following statements, relating to intangible assets is / are correct?

44. How is a non-current liability defined?

45. Non-current liabilities shall be reported in the Statement of Shareholders' Equity.

48. Which should not be classified as a current asset?

a. A receivable not collectible within one year

49. Which should be classified as a noncurrent asset?

a. It is refinanced on a long-term basis before the issue of financial statements.

Prepaid Expenses 100,000

Accumulated Depreciation 200,000

Land held for sale 1,800,000

2. Jomar Company had the following liabilities at December 31, 2020;