1. Accounting has been given various definitions, probable loss on the event.

This is an application of
which of the following is not one of those definitions the prudence or conservatism concept.
a. Accounting is a service activity. Its function is to b. Under the consistency concept, the financial
provide quantitative information, primarily financial in statements should be prepared on the basis of
nature, about economic entities that is intended to be accounting principles which are followed consistently.
useful in making economic decisions.
c. Under the entity theory, the business is viewed as a
b. Accounting is the art of recording, classifying, and separate entity. Therefore, the personal transactions
summarizing in a significant manner and in terms of of the business owners are not recorded in the
money, transactions and events which are, in part of business' accounting records.
at least, of a financial character and interpreting the
results thereof economic actions and events to d. The time period concept means that financial
statements are prepared only at the end of the life of
ascertain the degree of these assertions and
established criteria and communicating the a business.
5. Entity A appropriates PIM to fund employee
c. Accounting is a systematic process of objectively
obtaining and evaluating evidence regarding benefits for the last quarter of the following year.
Entity A deposits the PIM fund in a payroll account.
assertions about correspondence between results to
interested users. This economic activity is most appropriately referred
to as:
d. Accounting is the process of identifying, measuring,
and communicating economic information to permit a. production.
informed judgment and decisions by users of b. savings.
information.
c. exchange.
2. Which of the following statements is true?
d. investment.
a. The basic purpose of accounting is to provide
information about economic activities intended to be 6. It is the branch of accounting that focuses on the
useful in making economic decisions. general-purpose reports of financial position and
operating results known as financial statements.
b. All events and transactions of an entity are
recognized the books of accounts. a. Financial accounting

c. General purpose financial statements are those b. Auditing

statements that cater to the common and specific c. Managerial accounting
needs of a wide range of external users.
d. Taxation
d. The accounting process of assigning numbers,
commonly in monetary terms, to the economic
transactions and events is referred to as classifying.
3. The accounting standards used in the
Philippines are adapted from the standards issued by
the
a. Federal Accounting Standards Board (FASB).
b. International Accounting Standards Board (IASB)
c. Philippine Institute of Certified Public Accountants
(PICPA).
d. Democratic People's Republic of Korea Accounting
Standards Committee (DPKRASC).
4. Which of the following statements is
incorrect regarding the basic accounting concepts?
a. One of ABC Co.'s delivery trucks was involved in an
accident. Although no lawsuits have yet been filed
against ABC, ABC recognized a liability for the
50. This refers to the comparability of financial c. individual entities, rather than to industries of
statements of the same entity but in different the economy as a whole or to members of society as
periods. consumers
a. Inter-comparability d. individual business entities and industries
rather than to the economy as a whole or to members
b. Extra-comparability of society as consumers
c. Intra-comparability 55. Which of the following statements is correct
d. Intro-comparability when an entity departs from a provision of a PFRS?

51. Which of the following financial statements a. The entity's financial statements would be
would not be dated as covering a certain reporting grossly incorrect; therefore, PAS 1 does not allow such
period? a departure.

a. Statement of financial position b. PAS 1 permits such a departure if the relevant

regulatory framework requires, or otherwise does not
b. Statement of profit or loss and other prohibit, such a departure.
comprehensive income
c. PAS 1 requires certain disclosures when an
c. Statement of cash flows entity departs from a provision of a PFRS.
d. Statement of changes in equity d. b and c
52. Comprehensive income (or total comprehensive 56. Which of the following statements is correct
income) includes regarding the classification of financial liabilities as
a. Profit or loss current or noncurrent in accordance with PAS 1 ?

b. Other comprehensive income a. Currently maturing obligations are presented

as current liabilities even if their original term is
c. Transactions with owners longer than one year and even if a refinancing
agreement is completed after reporting period but
d. a and b
before the financial statements are authorized for
e. Of these issue.

53. What is the purpose of reporting comprehensive b. Currently maturing obligations are presented
income? as noncurrent liabilities only if their original term is
longer than one year.
a. To report changes in equity due to
transactions with owners. c. Currently maturing obligations are presented
as noncurrent liabilities only if a refinancing
b. To report a measure of overall performance agreement is completed after the end of the reporting
of an entity. period but before the financial statements are
c. To replace profit with a better measure. authorized for issue.

d. To combine income from continuing d. Currently maturing obligations are presented

operations with income from discontinued operations as noncurrent liabilities if a refinancing agreement is
and extraordinary items. completed after the financial statements are
authorized for issue.
54. The information provided by financial reporting
pertains to 57. According to PAS 1, the judgments and estimates
embodied in the financial statements, for example,
a. individual business entities and the economy materiality judgments, assessments of uncertainty
as a whole, rather than to industries or to members of and risk, and the like, are the responsibility of the
society as consumers entity's
b. individual business entities, industries and the a. management.
economy as a whole, rather than to members of
society as consumers b. accountant.
c. auditor.
d. janitor.
58. Which of the following is not a required 2. Philippine Financial Reporting Standards (PFRSs), as
disclosure under PAS 1? referred to in the Standards, pertains to:
a. The financial effect of a departure from a a. PFRS 1 to PFRS 17
PFRS when an entity departs from a PFRS
requirement. b. PAS 1 to PAS 41
c. IFRIC and SIC Interpretations
b. Any material uncertainties on the entity's
ability to continue as a going concern. d. Choices A and B
c. The recognition, measurement and disclosure e. All of the above
of specific transactions and other events.
d. The reason for using a longer or shorter
period when an entity changes the frequency of its 3. It provides narrative descriptions or disaggregations
reporting. of items presented in the statement of financial
position, statement(s) of profit or loss and other
59. An entity's financial position or condition refers comprehensive income, statement of changes in
to which of the following? equity and statement of cash flows and information
a. The status of the entity's assets, liabilities and about items that do not qualify for recognition in
those statements.
equity.
b. The amount of return that the entity has a. Framework for the Preparation and
Presentation of Financial Statements
generated from its economic resources during the
period. b. Conceptual Framework for Financial
Reporting
c. The level of change in the entity's economic
resources and claims to those resources, also referred c. Notes
to as the economic phenomena.
d. General purpose financial reports
60. Comprehensive income excludes which of the
following of these.
a. Revaluation surplus 4. Which of the following is not a component of other
comprehensive income?
b. Gains and losses from investments measured
at fair value through profit or loss a. changes in revaluation surplus

c. Income tax expense b. net interest cost of defined benefit plan

d. Distributions to owners c. translation gains and losses

STUDOCU REVIEWER d. gains and losses from investments in equity

instruments designated at fair value through other
1. Which of the following statements is not true? comprehensive income
a. PAS 1 applies to the structure and content of 5. Which of the following is not a component of other
condensed interim financial statements prepared in comprehensive income?
accordance with IAS 34 Interim Financial Reporting
a. the effective portion of gains and losses on
b. PAS 1 applies to entities that present hedging instruments in a cash flow hedge
consolidated financial statements in accordance with
IFRS 10 Consolidated Financial Statements b. change in fair value that is attributable to
changes in the liability’s credit risk for liabilities
c. PAS 1 applies to entities that present separate designated as at fair value through profit or loss
financial statements in accordance with
c. changes in the value of the time value of
IAS 27 Separate Financial Statements options
d. PAS 1 uses terminology that is suitable for d. impairment losses arising from the excess of
profit-oriented entities, including public sector the recovera
business entities.
carrying amount.
 a. present information, including accounting
policies, in a manner that provides relevant, reliable,
6. Which of the following statements is true? comparable and understandable information.
a. Profit or loss is the total of income less b. complies with majority of the applicable
expenses, includi comprehensive income PFRSs
b. Reclassification adjustments are amounts c. selects and apply accounting policies in
transferred to r accordance with PAS 8 Accounting
current period that were recognized in other Policies, Changes in Accounting Estimates and Errors
comprehensive previous periods
d. provides additional disclosures when
c. Total comprehensive income is the change in compliance with the specific requirements in PFRSs is
equity during transactions and other events, other insufficient to enable users to understand the impact
than those changes r with owners in their capacity as of particular transactions, other events and conditions
owners on the entity’s financial position and financial
d. All of the statements above are true. performance

7. A complete set of financial statements includes: 10. What must be disclosed in case management
concludes that compliance with a requirement in an
I. notes, comprising a summary of significant IFRS would be so misleading that it would conflict
accounting explanatory information; and with the objective of financial statements set out in
II. a statement of financial position as at the the Framework and the relevant regulatory
beginning of t period when an entity applies an framework allows a departure? (choose the incorrect
accounting policy retro retrospective restatement of one)
items in its financial statements items in its financial a. that management has concluded that the
statements. financial statements present fairly the entity’s
a. I only financial position, financial performance and cash
flows;
b. II only
b. an explicit and unreserved statement that the
c. Both I and II entity’s financial statements have
d. Neither of I and I complied with all the requirements of the IFRSs
8. How many of the following statements is/are c. the title of the IFRS from which the entity has
true? departed, the nature of the
I. An entity may use titles for the statements departure, including the treatment that the IFRS
other than the would require, the reason why that treatment would
be so misleading in the circumstances that it would
II. An entity shall present with equal prominence
conflict with the objective of financial statements set
all of the complete set of financial statements.
out in the Framework,
III. an entity shall present the components of
d. the treatment adopted; and for each period
profit or loss comprehensive income.
presented, the financial effect of the departure on
IV. Reports and statements presented outside each item in the financial statements that would have
the financial environmental reports and value-added been reported in complying with the requirement.
statements are
11. If management concludes that compliance with a
a. 0 requirement in an IFRS would be so misleading that
it would conflict with the objective of financial
b 1 statements set out in the Framework, but the
c 2 relevant regulatory framework prohibits departure
from the requirement, the entity shall do the
d 3 following, except:
9. To achieves fair presentation in the financial a. Make no changes and continue complying
statements, an entity is required to: (choose the with the standard.
incorrect one)
b. Reduce the perceived misleading aspects of conclusion basis of accounting is appropriate without
compliance by making appropriate disclosures. detailed
c. disclose the title of the IFRS in question, the d. An entity shall prepare all its financial
nature of the requirement, and the reason why statements accounting.
management has concluded that complying with that
e. An entity shall disclose comparative
requirement is so misleading in the circumstances
that it conflicts with the statements set out in the information period for all amounts reported in the
current peri
Framework
d. disclose for each period presented, the 15. Which of the following statements is true?
adjustments to a statements that management has a. Employment of inappropriate accounting
concluded would be ne presentation. policies can be required by sufficient disclosure and
explanation of such policies.

12. Which of the following statements is required to b. If a line item is not individually material, it is
aggregated with other items either in the financial
be disclose statements?
statements or in the notes.
I. An entity whose financial statements comply with
c. An item that is not sufficiently material to
PF and unreserved statement of such compliance in
the n II. An entity’s ability to continue as a going warrant separate presentation in the financial
statements will also not warrant separate
concern.
presentation in the notes.
III. Uncertainties on the entity’s ability to continue as
d. An entity must provide all specific disclosures
a g management is aware, in making its assessment,
of m to events or conditions that may cast significant required by an IFRS.
doubt continue as a going concern. e. An entity cannot go beyond the minimum
a. I, II and III requirements for disclosures as provided by an IFRs.
16. Which of the following statements is false?
b. II and III only
c. I and II only a. An entity shall present a complete set of
financial statements (including comparative
d. I and III only information) at least annually.
13. An entity shall no longer prepare financial b. An entity shall not offset assets and liabilities
statements on or income and expenses, unless required or permitted
by an IFRS.
a. The entity intends to liquidate
c. Measuring assets net of valuation allowances
b. The entity’s shares of stock have been —for example, obsolescence allowances on
suspended inventories and doubtful debts allowances on
c. The entity has suffered losses in the past two receivables—is an example of offsetting.
reporting period d. Offsetting is generally disallowed since it
d. All of the above detracts from the ability of users both to understand
the transactions, other events and conditions that
14. Which of the following statements is false? have occurred and to assess the entity’s future cash
a. An entity shall prepare financial statements flows
on a g management either intends to liquidate the e. Offsetting can be allowed when it reflects the
entity no realistic alternative but to do so. substance of the transaction or other event
b. When an entity does not prepare financial 17. Which of the following offsetting is not allowed?
statement basis, it shall disclose that fact, together
with the financial statements and the reason why the a. Offsetting the related selling expenses from
going concern. the gains or losses on the disposal of non-current
assets.
c. When an entity has a history of profitable
operating financial resources, the entity may reach a b. Presenting provisions and contingent
liabilities net of any reimbursement that may be
received under a contractual arrangement with a third d. the entity has an unconditional right to defer
party. settlement twelve months after the reporting period.
c. Presenting on net basis material foreign 22. Which of the following statements is false?
exchange gains and losses
a. The operating cycle of an entity is the time
d. Presenting on net basis gains and losses between the processing and their realization in cash
arising on financial instruments held for trading. or cash equivalents
18. When an entity changes the end of its reporting b. When the entity’s normal operating cycle is
period and presents financial statements for a period not clearly i be twelve months.
longer or shorter than one year, an entity shall
c. Current assets include assets (such as
disclose, in addition to the period covered by the
financial statements: inventories and trade sold, consumed or realized as
part of the normal operating not expected to be
I. the reason for using a longer or shorter period, and realized within twelve months after the reporting p.
II. the fact that amounts presented in the financial d. Current assets also include assets held
statements are not entirely comparable. primarily for the current portion of non-current
financial assets.
a. I only
e. PAS 1 provides for an elaborate definition of
b. II only non-current
c. Both
d. Neither 23. An entity shall classify a liability as non-current
19. When an entity makes a retrospective when
restatement of item statements or when it a. it expects to settle the liability in its normal
reclassifies items in its financial statement following operating c
comparative balance sheets, except one:
b. it holds the liability primarily for the purpose
a. Dated as of December 31, 2017 of trading
b. Dated as of December 31, 2016 c. the liability is due to be settled within twelve
c. Dated as of December 31, 2015 months after reporting period

d. Dated as of January 1, 2016 d. the entity has an unconditional right to defer

settlement of the liability for at least twelve months
20. When the entity reclassifies comparative after the reporting period.
amounts, the entity
24. Which of the following should be classified as
a. the nature of the reclassification; noncurrent?
b. the amount of each item or class of items that a. liabilities, such as trade payables and some
is r accruals for employee and other operating costs, that
c. the reason for the reclassification. are part of the working capital used in the entity’s
normal operating cycle that are due to be settled
d. All of the above more than twelve months after the reporting period.
21. An entity shall classify a liability as non- b. A liability due within 12 months but with an
current when original maturity of 3 years.
a. it expects to settle the liability in its normal c. A liability in which the entity expects, and has
operating c the discretion, to refinance or roll over an obligation
for at least twelve months after the reporting period
b. it holds the liability primarily for the purpose
under an existing loan facility.
of trading
d. A liability due within 12 months but
c. the liability is due to be settled within twelve
refinanced on a long-term basis and the refinancing
months a
agreement was completed after the reporting period
and before the financial statements are authorized for
issue.
e. A liability due within 12 months but a. total comprehensive income for the period,
refinanced on a long-term basis and the refinancing showing amounts attributable to owners of the parent
agreement was completed after the reporting period and t
and after the financial statements are authorized for
issue.
25. Which of the following should be classified as
noncurrent?
a. A liability with an acceleration clause and the
entity violated a contract provision.
b. A liability with an acceleration clause and the
entity violated a contract provision but the lender
agreed, after the reporting period and after the
authorization of the financial statements for issue, not
to demand payment as a consequence of the breach.
c. A liability with an acceleration clause and the
entity violated a contract provision but the lender
agreed, after the reporting period and before the
authorization of the financial statements for issue, not
to demand payment as a consequence of the breach.
d. A liability with an acceleration clause and the
entity violated a contract provision but the lender
agreed by the end of the reporting period to provide a
period of grace ending at least twelve months after
the reporting period.
26. Among others, reclassification adjustments
arise from changes in:
I. Revaluation surplus
II. Remeasurement gains or losses from
a defined benefit plan
a. I only
b. II only
c. Both
d. Neither
27. All of the items below, except one, give rise to
reclassification adjustment
a. Disposal of foreign operation
b. when a hedged forecast transaction affects
profit or loss
c. derecognition of investments measure at fair
value through
d. changes in revaluation surplus
28. An entity shall present a statement of changes in
equity