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FINANCIAL ACCOUNTING AND REPORTING

PFRS QUIZ

INSTRUCTION: Select the correct answer for each of the D. In an equity-settled share-based payment
following questions. Mark only one answer for each item transaction, performance condition must be taken
by shading the box corresponding to the letter of your into account when estimating fair value of equity
choice on the answer sheet provided. STRICTLY NO instruments at the measurement date.
ERASURES ALLOWED.
6. Which statement is incorrect regarding accounting for
1. Philippine Financial Reporting Standards issued by the business combinations in accordance with PFRS 3?
Financial Reporting Standards Council (FRSC) apply A. An entity shall account for each business
A. Six months from the date of publication in the combination by applying the acquisition method.
official gazette. B. For each business combination, one of the
B. Six months from the date of the approval by the combining entities shall be identified as the
PRC/BOA. acquirer.
C. From a date specified in the document. C. The requirements of PFRS 3 do not apply to the
D. From the date of approval by the FRSC. acquisition by an investment entity, as defined in
PFRS 10, of an investment in a subsidiary that is
2. The consensus in Philippine Interpretations Committee required to be measured at fair value through
Q&As normally takes effect upon profit or loss.
A. Publication D. PFRS 3 applies to the acquisition of an asset or a
B. Approval by the PIC group of assets that does not constitute a
C. Approval by the FRSC business.
D. Approval by the PRC/BOA
7. Which statement is incorrect regarding PFRS 4?
3. Which of the following remained unchanged in the A. PFRS 4 was an interim standard, which was meant
2018 Conceptual Framework? to be in place until the IASB completed its project
A. The reporting entity on insurance contracts.
B. Derecognition B. PFRS 4 permitted entities to use a wide variety of
C. Presentation and disclosure accounting practices for insurance contracts,
D. Concepts of capital and capital maintenance reflecting national accounting requirements and
variations of those requirements, subject to
4. PFRS 1 applies to limited improvements and specified disclosures.
A. An entity’s first annual financial statements in C. PFRS 4 permits shadow accounting.
which the entity adopts PFRSs, by an explicit and D. PFRS 4 addresses accounting by policyholders.
unreserved statement in those financial
statements of compliance with PFRSs. 8. Which statement is incorrect regarding a noncurrent
B. Changes in accounting policies made by an entity asset held for sale in accordance with PFRS 5?
that already applies PFRSs. A. An entity shall classify a non-current asset as held
C. Both A and B. for sale if its carrying amount will be recovered
D. Neither A nor B. principally through a sale transaction rather than
through continuing use.
5. Which statement is correct regarding share-based B. Non-current asset classified as held for sale is
payment transactions in accordance with PFRS 2? measured at the lower of its carrying amount and
A. When applying PFRS 2 an entity measures fair fair value less costs to sell.
value in accordance with PFRS 13. C. Any impairment loss that arises by using the
B. Cash-settled share- based payment transaction is measurement principles in PFRS 5 must be
a share-based payment transaction in which the recognized in profit or loss, except for assets
entity receives goods or services but has no previously carried at revalued amounts.
obligation to settle the transaction with the D. Classification as asset held for sale will most likely
supplier. result in an immediate charge to profit or loss for
C. The entity shall account for the cancellation or assets measured at fair value.
settlement as an acceleration of vesting, and shall
therefore recognize immediately the amount that
otherwise would have been recognized for
services received over the remainder of the
vesting period.

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9. In accordance with PFRS 6, which of the following 14. Which statement is incorrect regarding joint
expenditures would never qualify as an exploration arrangements in accordance with PFRS 11?
and evaluation asset? A. A joint arrangement is an arrangement of which
A. Expenditure for acquisition of rights to explore two or more parties have joint control.
B. Expenditures related to the development of B. In a joint arrangement, no single party controls
mineral resources the arrangement on its own.
C. Expenditure for exploratory drilling C. An arrangement cannot be a joint arrangement if
D. Expenditure for activities in relation to evaluating not all of its parties have joint control of the
the technical feasibility and commercial visibility arrangement.
of extracting a mineral resources D. A joint venturer shall recognise its interest in a
joint venture as an investment and shall account
10. Which of the following types of information does PFRS for that investment using the equity method in
7 not require to be disclosed about exposure to risks accordance with PAS 28.
arising from financial instruments?
A. Qualitative and quantitative information about 15. PFRS 12 requires an entity to disclose information
operational risk. about its interests in:
B. Qualitative and quantitative information about I. Subsidiaries
market risk. II. Joint arrangements
C. Qualitative and quantitative information about III. Associates
credit risk. IV. Unconsolidated structured entities
D. Qualitative and quantitative information about
liquidity risk. A. I, II, III and IV
B. I, II and III only
11. If revenues from transactions with a single external C. I and II only
customer amount to 10 per cent or more of an entity’s D. I only
revenues, PFRS 8 requires an entity to disclose
A. The identity of a major customer. 16. Which statement is incorrect regarding the fair value
B. The amount of revenues that each segment hierarchy in PFRS 13?
reports from a major customer. A. To increase consistency and comparability in fair
C. Both a and b value measurements and related disclosures,
D. Neither a nor b PFRS 13 establishes a fair value hierarchy that
categorizes into three levels the inputs to
12. Which statement is correct regarding accounting for valuation techniques used to measure fair value.
financial instruments in accordance with PFRS 9? B. The fair value hierarchy gives the highest priority
A. PFRS 9 distinguishes between the measurement to quoted prices (unadjusted) in active markets
methods by reviewing the business model of each for identical assets or liabilities and the lowest
entity and the risks and rewards of the priority to unobservable inputs.
transaction. C. Adjustments to arrive at measurements based on
B. Reclassification adjustments arise on disposal of fair value, such as costs to sell when measuring
investments in equity instruments classified as fair fair value less costs to sell, shall be taken into
value through other comprehensive income. account when determining the level of the fair
C. An entity is not required to separately recognize value hierarchy within which a fair value
interest revenue or impairment gains or losses for measurement is categorized.
a financial asset measured at fair value through D. The fair value hierarchy prioritizes the inputs to
profit or loss. valuation techniques, not the valuation techniques
D. When an entity uses settlement date accounting used to measure fair value.
for an asset that is subsequently measured at
amortized cost, the asset is recognized initially at 17. The objective of PFRS 14 is to specify the financial
its fair value on the settlement date. reporting requirements for regulatory deferral account
balances that arise when an entity provides goods or
13. The objective of PFRS 10 is to establish principles for services to customers at a price or rate that is
the presentation and preparation of consolidated A. Denominated in foreign currency.
financial statements when an entity B. Subject to rate regulation.
A. Has significant influence over one or more C. Not equal to fair value.
entities. D. Inclusive of inflation.
B. Jointly controls one or more other entities.
C. Controls one or more other entities.
D. Any of these.

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18. Which statement is correct regarding revenue 22. In accordance with the objective of PAS 2, a primary
recognition in accordance with PFRS 15? issue in accounting for inventories is
A. The first step in the five-step model is to identify A. The amount of cost to be recognized as an asset
the separate performance obligations in the and carried forward until the related revenues are
contract. recognized.
B. Transaction price is the amount of consideration B. The cost formulas to be used to assign costs to
to which an entity expects to be entitled in inventories.
exchange for transferring promised goods or C. The measurement of inventories held by
services to a customer including amounts producers of agricultural and forest products.
collected on behalf of third parties. D. The measurement of inventories held by
C. Revenue is recognized as control is passed, either commodity broker-traders.
over time or at a point in time.
D. For the purpose of determining the transaction 23. PAS 7 requires that investing and financing
price, an entity shall assume that the contract transactions that do not require the use of cash or
may be cancelled. cash equivalents should be
A. Excluded from a cash flow statement
19. Which statement is correct regarding accounting for B. Included in a cash flow statement before
leases in accordance with PFRS 16? operating, investing and financing activities
A. PFRS 16 does not require a company to recognize C. Presented in the cash flow statement after
assets and liabilities for lease of delivery vehicles. operating activities and before investing and
B. Lease term is the non-cancellable period for which financing activities
a lessee has the right to use an underlying asset, D. Presented in a cash flow statement after the
together with periods covered by an option to operating, investing and financing activities have
terminate the lease if the lessee is reasonably been presented
certain to exercise that option.
C. The lease term begins at the inception date. 24. Which statement is correct regarding changes in
D. Right-of-use assets that meet the definition of accounting policies in accordance with PAS 8?
investment property shall be presented in the A. An entity is not permitted to change an
statement of financial position as investment accounting policy.
property. B. A change in the measurement basis applied is not
a change in accounting policy.
20. An entity shall not apply PFRS 17 to C. If a new pronouncement does not include specific
A. Insurance contracts, including reinsurance transitional provisions, the change in accounting
contracts, it issues. policy is applied prospectively.
B. Reinsurance contracts it holds. D. If a change in accounting policy is required by a
C. Insurance contracts in which the entity is the new standard or interpretation, the change is
policyholder. accounted for as required by that new
D. Investment contracts with discretionary pronouncement.
participation features it issues, provided the entity
also issues insurance contracts. 25. In accordance with PAS 10, the following are
examples of non-adjusting events after the reporting
21. In accordance with PAS 1, an entity shall disclose period that would generally result in disclosure,
comparative information in respect of the previous except
period for all amounts reported in the current period’s A. Entering into significant commitments or
financial statements. When an entity applies an contingent liabilities, for example, by issuing
accounting policy retrospectively, it shall present, as a significant guarantees.
minimum B. Changes in tax rates or tax laws enacted or
A. Three complete sets of financial statements. announced after the reporting period that have a
B. Three statements of financial position and cash significant effect on current and deferred tax
flows, two of each of the other statements, and assets and liabilities.
related notes. C. Abnormally large changes after the reporting
C. Three statements of financial position and period in asset prices or foreign exchange rates.
statement of comprehensive income, two of each D. The determination after the reporting period of
of the other statements, and related notes. the amount of profit-sharing or bonus payments.
D. Three statements of financial position, two of each
of the other statements, and related notes.

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26. Which statement is correct regarding accounting for 30. In accordance with PAS 21, the currency of the
income taxes in accordance with PAS 12? primary economic environment in which the entity
A. Deferred tax assets and liabilities shall be operates is called _______________
discounted. A. Functional currency
B. Current and deferred tax shall be recognized B. Presentation currency
outside profit or loss if the tax relates to items C. Foreign currency
that are recognized, outside profit or loss. D. Local currency
C. Deferred tax assets and liabilities are classified in
the statement of financial position as either 31. In accordance with PAS 23, which of the following
current or noncurrent depending on the related borrowing costs qualify for capitalization?
asset and expected timing or reversal. A. Borrowing costs incurred while land is under
D. Use of straight-line depreciation for accounting development during the period in which activities
purposes and an accelerated rate for income tax related to the development are being undertaken.
purposes creates deductible temporary difference. B. Borrowing costs incurred while land acquired for
building purposes is held without any associated
27. Which statement is incorrect regarding accounting for development activity.
property, plant and equipment in accordance with PAS C. Borrowing costs during an extended period in
16? which the entity suspends the activities necessary
A. The cost of an item of property, plant and to prepare an asset for its intended use or sale.
equipment may include costs incurred relating to D. None of the above.
leases of assets that are used to construct an item
of property, plant and equipment, such as 32. In accordance with PAS 24, in which of the following is
depreciation of right-of-use assets. an entity not related to a reporting entity?
B. Income earned through using a building site as a A. The entity is a post-employment defined benefit
car park until construction starts is recognized in plan for the benefit of employees of either the
profit or loss. reporting entity or an entity related to the
C. Bearer plants are accounted for in the same way reporting entity.
as self-constructed items of property, plant and B. The entity is controlled or jointly controlled by a
equipment person who has control, joint control or significant
D. Depreciation is not recognized if the asset is influence over the reporting entity.
retired from active use. C. One entity is a joint venture of a third entity and
the other entity is an associate of the third entity.
28. In relation to a defined benefit plan, which of the D. Both entities are associates of the same third
following is recognized in other comprehensive income party.
in accordance with PAS 19?
A. Increase in the present value of the defined 33. In accordance with PAS 26, retirement benefit plan
benefit obligation resulting from employee service investments shall be carried at
in the current period. A. Cost or amortized cost
B. Change in the present value of the defined benefit B. Fair value
obligation resulting from the effects of changes in C. Lower of A and B
actuarial assumptions. D. Either A or B depending on the trustee
C. Change in the current period in the net defined
benefit liability that arises from the passage of 34. When an entity prepares separate financial
time. statements in accordance with PAS 27, it shall account
D. The difference between the present value of the for investments in associates
defined benefit obligation being settled, as A. At cost.
determined on the date of settlement and the B. In accordance with PFRS 9.
settlement price, including any plan assets C. Using the equity method as described in PAS 28.
transferred and any payments made directly by D. Any of the above.
the entity in connection with the settlement.
35. In accordance with PAS 28, how are losses recognized
29. In accordance with PAS 20, government grants using the equity method in excess of the entity’s
include investment in ordinary shares applied to the other
A. Government assistance, which cannot reasonably components of the entity’s interest in an associate?
have a value placed upon them. A. In the order of their seniority (ie priority in
B. Transactions with government, which cannot be liquidation).
distinguished from the normal trading transactions B. In the reverse order of their seniority (ie priority
of the entity. in liquidation).
C. Both a and b. C. Pro rata on the basis of their carrying amounts.
D. Neither a nor b. D. Pro rata on the basis of their fair values.

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36. In accordance with PAS 29, the gain or loss on the net D. An entity shall disclose the amount of impairment
monetary position shall be included losses recognized in profit or loss during the
A. In profit or loss and separately disclosed. period and the line item(s) of the statement of
B. In profit or loss as part of other income and comprehensive income in which those impairment
expenses. losses are included.
C. As a component of other comprehensive income.
D. Directly in equity. 41. Which of the following provision is measured at
probability-weighted expected value in accordance
37. Company A issues preference shares to Company B. with PAS 37?
The terms of which entitle Company B to redeem the A. Environmental clean-up
preference shares for cash if Company A’s revenues B. Settlement of a lawsuit
fall below P100 million. In accordance with PAS 32, C. Customer refunds
Company A’s financial instrument should be classified D. Restructuring
as
A. Financial asset. 42. Which of the following will most likely qualify for
B. Financial liability. recognition as intangible asset in accordance with PAS
C. Equity instrument. 38?
D. Compound financial instrument. A. A team of skilled staff and cost of training them.
B. Specific management or technical talent.
38. Which statement is correct regarding presentation of C. Loyalty of customers to the entity.
basic and diluted earnings per share (EPS) in D. None of the above.
accordance with PAS 33?
A. EPS disclosures are required for all entities. 43. An entity may choose as its accounting policy to
B. Basic and diluted EPS need not be presented if the continue to apply the requirements of PAS 39 instead
amounts are negative. of PFRS 9 in relation to
C. If an entity presents items of profit or loss in a A. Classification and measurement
separate statement of profit or loss, it presents B. Impairment methodology
earnings per share only in the statement of profit C. Hedge accounting
or loss. D. None of the above
D. If a bonus issue occurs between the year-end and
the date that the financial statements are 44. Which statement is correct regarding investment
authorized, then no adjustment is made to EPS. property in accordance with PAS 40?
A. Entities should determine the fair value of
39. Which statement is correct regarding interim financial investment property.
reporting in accordance with PAS 34? B. Entities should use the fair value model.
A. PAS 34 requires interim financial reporting C. Entities should use the cost model.
quarterly. D. Entities should determine the fair value of
B. PAS 34 states a presumption that anyone reading investment property on the basis of a valuation by
interim financial reports will have access to the an independent valuer who holds a recognized
records of the entity. and relevant professional qualification.
C. If an entity does not prepare interim financial
reports, then the year-end financial statements 45. Which statement is incorrect regarding measurement
are deemed not to comply with PFRS. of biological assets and agricultural produce in
D. Measurements for interim reporting purposes shall accordance with PAS 41?
be made on a year-to-date basis. A. Biological assets should be measured on initial
recognition and at subsequent reporting dates at
40. Which statement is correct regarding impairment of fair value less costs to sell, unless fair value
non-financial assets in accordance with PAS 36? cannot be reliably measured.
A. External sources of information indicating that an B. The gain on initial recognition of biological assets
asset may be impaired include evidence of at fair value, and changes in fair value of
obsolescence or physical damage of an asset. biological assets during a period, are reported in
B. An impairment loss shall be recognized profit or loss.
immediately in profit or loss, even if the asset is C. All costs related to biological assets that are
carried at revalued amount. measured at fair value are recognized as
C. All intangible assets shall be tested for impairment expenses when incurred, other than costs to
annually, irrespective of whether there is any purchase biological assets.
indication of impairment. D. Agricultural produce should be measured at fair
value less costs to sell at the point of harvest,
unless fair value cannot be reliably measured.

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46. In accordance with IFRIC 1, once the related asset B. When equity instruments issued to a creditor to
has reached the end of its useful life, all subsequent extinguish all or part of a financial liability are
changes in the decommissioning liability shall be recognized initially, an entity shall measure them
recognized in at the fair value of the equity instruments issued,
A. Profit or loss as they occur if the entity applies the unless that fair value cannot be reliably
cost model. measured.
B. Other comprehensive income as they occur if the C. If the fair value of the equity instruments issued
entity applies the revaluation model. cannot be reliably measured, the equity
C. Profit or loss as they occur regardless of the instruments shall be measured to reflect the fair
measurement model used by the entity. value of the financial liability extinguished.
D. Other comprehensive income as they occur D. The difference between the carrying amount of
regardless of the measurement model used by the the financial liability (or part of a financial liability)
entity. extinguished, and the consideration paid, shall be
recognized as a separate component of equity.
47. Which statement is correct regarding members’
shares in co-operatives and similar entities in 50. In accordance with IFRIC 20, to the extent that the
accordance with IFRIC 2? benefit is improved access to ore, the entity shall
A. Members’ shares are always classified as equity. recognize production stripping costs as
B. The contractual right of the holder of a financial A. Inventory
instrument (including members’ shares in co- B. Stripping activity asset
operative entities) to request redemption does, in C. Exploration and evaluation asset
itself, require that financial instrument to be D. Any of these.
classified as a financial liability.
C. The entity must consider all of the terms and 51. Which statement is incorrect regarding IFRIC 23?
conditions of the financial instrument in A. An uncertain tax treatment is any tax
determining its classification as a financial liability treatment applied by an entity where there is
or equity. uncertainty over whether that treatment will be
D. Terms and conditions include relevant local laws, accepted by the tax authority.
regulations and the entity’s governing charter in B. Each uncertain tax treatment is considered
effect at the date of classification and expected separately or together as a group, depending
future amendments to
on which approach better predicts the
resolution of the uncertainty.
48. Which statement is incorrect regarding IFRIC 17?
C. If an entity concludes that it is not probable
A. The liability to pay a dividend shall be recognized
when the dividend is appropriately authorized and that the treatment will be accepted, it should
is no longer at the discretion of the entity. reflect the effect of the uncertainty in its
B. An entity shall measure a liability to distribute income tax accounting in the period in which
non-cash assets as a dividend to its owners at the that determination is made.
fair value of the assets to be distributed. D. Detection risk is considered in the recognition
C. At the end of each reporting period and at the and measurement of uncertain tax treatments.
date of settlement, the entity shall review and
adjust the carrying amount of the dividend 52. In accordance with PIC Q&A 2019-06, how should a
payable, with any changes in the carrying amount parent account for the step acquisition of a subsidiary
of the dividend payable recognized in equity as in its separate financial statements?
adjustments to the amount of the distribution. A. Fair value as deemed cost approach
D. It addresses the accounting by shareholders who B. Accumulated cost approach
receive such a distribution. C. Either A or B.
D. Neither A nor B.
49. Which statement is incorrect regarding IFRIC 19?
A. The issue of an entity’s equity instruments to a 53. In accordance with PIC Q&A 2019-02,
creditor to extinguish all or part of a financial cryptocurrencies held by an entity can be accounted
liability is consideration paid in accordance with for as
PFRS 9. A. Inventories
B. Intangible assets
C. Either a or b
D. Neither a nor b

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54. Samgyup Corp., a restaurant establishment, 58. PFRS 13 defines fair value as current exit price,
presented a bill to a customer for food and beverage whereas depreciated replacement cost measures the
consumption with a service charge of P500. The entry price for an asset. In accordance with PIC Q&A
service charge is allocated as follows: Employees: No. 2018-03, when can depreciated replacement cost
85%; Samgyup: 15%. In accordance with PIC Q&A be used to measure the fair value of an item of
2019-01, what portion of the service charge should be property, plant and equipment?
included in the transaction price? A. Only when the entry price equals a current exit
A. 100% C. 15% price.
B. 85% D. Nil B. Only when the entry price is lower than a current
exit price.
55. In the normal course of its business, a real estate C. Under no circumstances.
developer purchases the following raw land: D. In all circumstances.
• Land A - The entity has plans to construct and
develop the parcel of land as a residential 59. As of January 1, 2020, Entity A owns 80% of the
subdivision for sale as approved by the entity’s shares of Entity B. Entity B is a (single) cash-
Board of Directors. The preparation of the master generating unit. In accordance with PIC Q&A 2018-
plan, detailing the plans as residential property, 02, in which of the following does an entity need to
has commenced but the entity intends to start the gross up goodwill for any amount of goodwill not
physical construction activities (e.g. excavation) recognized due to a current or previously outstanding
two years from the government approval of the non-controlling interest when performing a goodwill
master plan. impairment test related to the subsidiary at 31
• Land B –The entity has plans to construct and December 2020?
develop the parcel of land as a residential A. On June 30, 2020, Entity A acquires the remaining
subdivision for sale as approved by the entity’s 20% ownership interest in Entity B. Entity A
Board of Directors. The preparation of the master previously measured the non-controlling interest
plan, detailing the plans, has not commenced. at initial recognition at its proportionate interest in
• Land C - The entity intends to develop the land the net identifiable assets.
into a commercial center for lease but preparation B. On June 30, 2020, Entity A acquires 10% of the
of master plan has not commenced and the entity remaining ownership interest in Entity B, leaving a
does not intend to commence the physical non-controlling interest of 10% as of December
construction activities within the year. 31, 2020. Entity A previously measured the non-
• Land D - The entity purchased the parcel of land controlling interest at initial recognition at its fair
to establish presence in the location but does not value.
have any concrete plans on how to develop the C. On June 30, 2020, Entity A sells 20% of the
property. ownership interest in Entity B, resulting in a non-
controlling interest of 40% as of December 31,
In accordance with PIC Q&A No. 2018-11, which land
2020. Entity A previously measured the non-
should be classified as investment property?
controlling interest at initial recognition at its fair
A. Land A, B, C and D C. Land B and C
value.
B. Land B, C and D D. Land C and D
D. None of these.
56. In accordance with PIC Q&A No. 2018-10, an entity
60. In accordance with PIC Q&A No. 2018-01, the criteria
should disclose
to consider when assessing whether a proposed new
A. Write-downs of inventory held at the end of the
accounting policy is more relevant than the existing
reporting period.
policy include
B. Write-downs representing sales below cost during
A. Whether support for the proposed accounting
the reporting period.
policy exists in PFRSs, Philippine Interpretations
C. Both a and b.
and rejection notices issued by the IFRS
D. Neither a nor b.
Interpretations Committee.

B. Whether the proposed accounting policy is a
57. In accordance with PIC Q&A No. 2018-04, to
widely recognized and prevalent practice.
determine that fair value cannot be reliably measured,
C. Whether, in the particular circumstances of the
an entity must demonstrate
entity, the proposed accounting policy results in
A. Quoted market prices for the biological asset are
information that is more useful in enabling users
not available.
to evaluate past, present or future events.
B. Alternative fair value measurements for the
D. All of these.
biological asset are determined to be clearly
unreliable.
C. Both a and b.
D. Either a or b.

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61. In accordance with PIC Q&A No. 2017-06, which of the 63. An entity acquired a piece of land with existing
following collector’s items (e.g. paintings, rare items, building with the intention to demolish the old building
vintage items, classic cars) can be accounted for in right away in order to construct a new building on its
accordance with PAS 40? site as part of its planned redevelopment. In
A. Collector’s items for administrative or aesthetic accordance with PIC Q&A No. 2012-02, it is
purposes. appropriate for the entity to account for the carrying
B. Collector’s items for short-term investment value of the old building as part of the cost of the new
purposes. The entity also trades these collector’s building
items in the ordinary course of business. A. That will be used as an owner-occupied property
C. Collector’s items for long-term investment B. That will be held as an investment property
purposes. The entity does not trade these C. That will be sold as an inventory
collector’s items in the ordinary course of business. D. None of the above.
D. None of these.
64. Which of the following entities should apply the PFRS
62. Given the following fact pattern: for SMEs?
A. An entity whose debt instruments are traded in an
over-the-counter market
B. An investment house.
C. A non-publicly accountable entity with total
liabilities of P300 million.
D. A non-publicly accountable entity with total assets
of P300 million.

65. The following are common characteristics of medium-

sized, small and micro entities, except
In accordance with PIC Q&A 2017-04, which A. Are not required to file financial statements under
statement is incorrect? Part II of SRC Rule 68
A. Entity B is a related party of A in the consolidated B. Are not in the process of filing their financial
financial statements of A. statements for the purpose of issuing any class of
B. Entity B is a related party of C in the separate instruments in a public market
financial statements of C. C. Are not holders of secondary licenses issued by
C. Entity D is not a related party of A in the separate regulatory agencies
financial statements of A. D. Are not public utilities
D. Entity D is a related party of A in the consolidated
financial statements of A. J - end - J

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 SUGGESTED ANSWERS
1. C 16. C 31. A 46. C 61. C
2. C 17. B 32. D 47. C 62. D
3. D 18. C 33. A 48. D 63. C
4. A 19. D 34. D 49. D 64. D
5. C 20. C 35. B 50. B 65. D
6. D 21. D 36. A 51. D
7. D 22. A 37. B 52. C
8. C 23. A 38. C 53. C
9. B 24. D 39. D 54. C
10. A 25. D 40. D 55. D
11. D 26. B 41. C 56. A
12. C 27. D 42. D 57. C
13. C 28. B 43. C 58. A
14. C 29. D 44. A 59. D
15. A 30. A 45. D 60. D
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