1.

It is the accounting standard setting body created by professional regulation commission upon
recommendation of the Board of Accountancy to assist the Board of Accountancy in carrying out
---- powers and functions under R.A. 9298
- Financial Reporting Standards Council

2. Which underlying concept serves as the basic for preparing financial statements at regular
intervals?
- Accounting period

3. The relatively stable economic, political, and social environment support?

- Going concern

4. The objectives of financial reporting for entities based on

- The needs of the users of the information

5. Which of the following is the best description of “faithful representation” in relation to

information in financial statements?
- Freedom from material error

6. Which concept of accounting hold that, to the maximum extent possible, financial statements

m
shall be based on arm’s length transaction?

er as
- Verifiability

co
eH w
7. Which of the following relate to both relevance and faithful representation?

o.
- Consistency
rs e
ou urc

8. It is the process of incorporating in the statement of financial position or statement of

comprehensive income an item that meets the definition of an element of the financial statements.
- Recognition
o
aC s

9. The allowance for doubtful accounts which appears as a deduction from accounts receivable is an
vi re

application of
- Matching principle
y

10. An outflow of assets from an entity based on an activity that represents the entity’s major
ed d

operations is called?
ar stu

- Expense

11. What is another term for equity?

is

- Net assets
Th

12. The effects of transactions and other events on an entity’s economic resources and claims are
depicted in the periods in which those effects occur even if the resulting cash receipts and
payments occur in a different period.
- Accrual Accounting
sh

13. It Is the process of determining the monetary amounts at which the elements off the financial
statements are recognized and carried in the financial statements.
- Measurement

14. The cross- reference between cash line item in the financial statements and any related
information disclosed in the notes to financial statements.
- Is mandatory

15. Which of the following information shall be disclosed in the summary of significant accounting
policies?
- Criteria for determining which investments are treated as cash equivalents.

This study source was downloaded by 100000831802403 from CourseHero.com on 11-14-2021 18:19:58 GMT -06:00

https://www.coursehero.com/file/67786589/confra-reviewer-finalsdocx/
 16. What is the purpose of information presented in the notes to financial statements?
- To provide disclosures required by generally accepted accounting principles.

17. Related parties include all of the following, except

- Two critics that have a common director.

18. If there have been transactions between related parties, an entity shall disclose
I. Nature of the relationship
II. Information about the transaction and outstanding balances
- Both I and II

19. Which of the following is not a related party?

- A shareholder of the entity that holds 1% stake in the entity.

20. The financial statements are authorized for issue

- When the board of directors reviews the financial statements and authorize for issue.

21. Adjusting events are those that

- Provide evidence for conditions that existed at the end of the reporting period.

m
22. Nonadjusting events after reporting period that generally results in disclosure include all of the

er as
following, except

co
- Destruction of a major production plant by fire before the end of the reporting period.
eH w
o.
23. Noncurrent asset or disposal group is classified as “held for sale” when the asset is available for
rs e
immediate sale and the sale is highly probable. For the sale to be highly probable. (choose the
ou urc

incorrect one)
- The sale is expected to qualify for recognition as a completed sale within two years from
the date of classification of the asset as “held for sale”.
o
aC s

24. What is the treatment of any gain on a subsequent increase in the fair value less cost to self of a
vi re

noncurrent asset classified as held for sale?

- The gain shall be recognized but not in excess of the cumulative impairment loss
previously recognized.
y
ed d

25. Which of the following statements in relation to discontinue operation is true?

ar stu

- The discontinued operations consist of the income or loss from operating the
discontinued component net of tax effect as well as the gain or loss on disposal of the
discontinued component net of tax effect.
is

26. The effect of a change in accounting estimate recognized prospectively by including it in profit or
Th

loss of
- Current period and future periods if the change affects both

27. A change in measurement basis is

sh

- A change in accounting policy

28. A change in the unit depletion rate should be accounted for as

- Change in accounting estimate

29. Which may be considered an operating segment?

- Start- up operation before earning revenue

30. An entity shall disclose for each reportable segment which of the following specified amounts
that are included in the measure of segment assets?
- The amount of investment in associates and joint ventures accounted for by the equity
method.

This study source was downloaded by 100000831802403 from CourseHero.com on 11-14-2021 18:19:58 GMT -06:00

https://www.coursehero.com/file/67786589/confra-reviewer-finalsdocx/
 31. Interim financial reports shall be published
- Whenever the entity wishes

32. Publicly traded entities are encouraged to provide interim financial reports
- At least at the end of the half year and within 60 days of the end of the interim period.

33. What is the presentation of the results from discontinued operation in the income statement?
- The entity shall disclose a single amount of thee face if the income statement below the
income from continuing operation.

34. ELC Company’s trial balance reflected the following account balances on December 31,2018:

Accounts receivable P 1,600,000

Financial assets at fair value through profit or loss 500,000
Financial assets at amortized cost 1,300,000
Cash 1,100,000
Inventory 3,000,000
Equipment and furniture 2,500,000
Accumulated depreciation 1,500,000
Patent 400,000
Prepaid expenses 100,000

m
er as
Land held for future business site 1,800,000
In ELC Company’s December 31,2018 statement of financial position, what amount should be

co
shown as current assets? eH w
- 6,300,000

o.
rs e
35. Sandalwood Company carried a provision of P2,000,000 in its draft statements on December
ou urc

31,2018 in relation to an unresolved court case. On January 1,2019, when the financial statements
on December 31, 2018 had not yet been authorized for issue, the case was settled and the court
decided the final total damages payable by Sandalwood to be P2,800,000. What amount should
o

be adjusted on December 31,2018 in relation on this event?

aC s

- 800,000
vi re

36. The following information is available from the records of Acacia Company for the current year:
y

Beginning inventory 400,000

ed d

Freight in 300,000
Purchase returns 900,000
ar stu

Ending inventory 500,000

Selling expenses 1,250,000
Sales discounts 250,000
is

The cost of goods is six times the selling expenses.

What is the amount of gross purchases?
Th

- 8,200,000

37. Jazz Company operated two restaurants, one in Boracay and one I Dakak. During 2017, the entity
sh

decided to close the restaurant in Dakak and sell the property. It is probable that the disposal will
be completed early next year.
The revenue and expenses for 2017 and for the preceding two years are as follows:

2017 2016 2015

Sales- Boracay 60,000 48,000 40,000
Cost of goods sold- Boracay 26,000 22,000 18,000
Other expenses- Boracay 14,000 13,000 12,000
Sales- Dakak 23,000 30,000 52,000
Cost of goods sold- Dakak 14,000 19,000 20,000
Other expenses- Dakak 17,000 16,000 15,000

This study source was downloaded by 100000831802403 from CourseHero.com on 11-14-2021 18:19:58 GMT -06:00

https://www.coursehero.com/file/67786589/confra-reviewer-finalsdocx/
 During the later part of 2017, the entity sold much of the kitchen equipment of the Dakak
restaurant and recognized a pretax gain of P15,000 on the disposal. The income tax rate is 30%.
What amount should be reported as income or loss from discontinued operation for 2017?
- 5,600 loss
38. On December 1,2017, Umaasa Company committed to plan to dispose of a business component’s
assets. The disposal meets the requirements to be classified as discontinued operation. On that
date, the entity estimated that the loss from the disposition of the assets would be ₱700,000 and
the component’s operating loss was ₱200,000. What amount of pretax loss should be reported for
discontinued operation for 2017?
- 900,000

39. Booker Company committed to sell a comic book division, a component of business, on
September 1,2017. The carrying amount of the division was ₱4,000,000 and the fair value less
cost of disposal was ₱3,500,000. The disposal date is expected to be June 1, 2018. The division
reported an operating loss of ₱200,000 for the year ended December 31, 2017. What amount
should be reported as pretax loss from discontinued operation in 2017?
- 700,000

40. Xavier Company purchased a machinery on January 1,2014 for ₱7,200,000. The machinery has a
useful life of 10 years with no residual value and was depreciated using the straight- line method.

m
In 2017, a decision was made to change the depreciation method from straight line to sum of

er as
years’ digits. The estimate of useful life and residual value remained unchanged. What is the

co
depreciation for 2017? eH w
- 1,260,000

o.
rs e
41. On January 1,2016, London Company purchased a large quantity of personal computers. The cost
ou urc

of these computers was ₱6,000,000. On the date of purchase, the management estimated that the
computers would last approximately four years and would have a residual value at that time of
₱600,000. The entity used the double declining balance method. During January 20117, the
o

management realized that technological advancements had made the computers virtually obsolete
aC s

and that they would have to be replaced. The management changed the remaining useful life of
vi re

the computers to two years. What is the depreciation expense for 2017?
- 2,400,000
y

42. Canyon Company determined that the amortization rate on patent is unacceptably low due to
ed d

current advanced in technology. The entity decided at the beginning of 2017 to decrease the
ar stu

estimated useful life of the patent from 10 years to 8 years. The patent was purchased on January
1,2012 for ₱3,000,000 with estimated residual value of zero.
The entity decided on January 1,2017 to change the depreciation method for manufacturing
equipment from an accelerated method to the straight one method. On January 1,2017, the
is

historical cost of the equipment is ₱8,000,000 and the accumulated depreciation is ₱3,400,000.
Th

The expected remaining useful life of the equipment on January 1,2017 is 10 years and the
expected residual value is ₱200,000. What is the total charge against 2017 income as a result of
the accounting changes?
- 940,000
sh

43. During the year ended December 31, 2017, the following events occurred at Practical Company;
 It was decided to write off ₱800,000 from inventory which was over two years old as
it was obsolete.
 Sales of ₱600,000 had been omitted from the financial statements for the year ended
December 31, 2016.
What amount should be reported as a prior error in the financial statements for 2017?
- 600,000

44. On January 1,2017, LENI Construction Company changed to the percentage of completion
method from cost recovery method of income recognition. On December 31, 2016, the entity
complied data showing that income under the cost recovery method aggregated ₱7,000,000. If

This study source was downloaded by 100000831802403 from CourseHero.com on 11-14-2021 18:19:58 GMT -06:00

https://www.coursehero.com/file/67786589/confra-reviewer-finalsdocx/
 the percentage of completion method had been used, the accumulated income through December
31,2016 would have been ₱9,000,000. The income tax rate is 30%. The cumulative effect of the
accounting change should be reported in the 2017.
- Retained earnings statement as a ₱1,400,000 credit adjustment to the beginning
balance.
45. Jay Company prepares quarterly interim financial reports. The entity sells electrical goods and
normally 5% of customers claim on their warranty. The provision in the first quarter was
calculated at 5% of sales to date which amounted to ₱10,000,000.
However, in the second quarter, a design fault was found and warranty claims were expected to
be 10% for the whole year. Sales for the second quarter amounted to ₱15,000,000. What would
be the provision charged in the interim income statement for the second quarter?
- 2,000,000

46. Nature Company reported ₱950,000 net income for the quarter ended September 30, 2017 which
included the following after- tac items:
 A ₱ 600,000 gain from expropriation realized in April 30,2017 was allocated equally to
the second, third and fourth quarters of 2017.
 A ₱160,000 loss resulting from a change in inventory valuation method was recognized
on August 1,2017.
 In addition, the entity paid ₱480,000 on February 1,2017 for 2017 calendar- year

m
property taxes. Of this amount, ₱120,000 was allocated to the third quarter of 2017.

er as
For the quarter ended September 30, 2017 what amount should be reported as net income?

co
- 910,000
eH w
o.
rs e
47. Mace Company, a calendar- year entity, had the following income before tax provision and
ou urc

effective annual tax rate for the first three quarters of the current year:

Income before tax Tax rate

First quarter 6,000,000 30%
o

Second quarter 7,000,000 30%

aC s

Third quarter 8,000,000 25%

vi re

What is the income tax provision in the interim income statement for the third quarter?

- 1,350,000
y
ed d

48. Bubble Company is subject to the requirements of segment reporting. In the income statement for
ar stu

the current year. The entity reported revenue of ₱50,000,000 excluding intersegment sales of
₱10,000,000, expenses of ₱47,000,000 and net income ₱3,000,000. Expenses included payroll
costs of ₱15,000,000. The combined total assets of all operating segemenrs at year- year
amounted to 45,000,000.
is

- 5,000,000
Th

49. Based in the previous number (48), what is the minimum amount of external revenue to be
disclosed by reportable segments?
- 37,500,000
sh

50. Ariel Company provided the following profit (loss) relating to operating segments
V 3,400,000
W 1,000,000
X (2,000,000)
Y 400,000
Z (200,000)
What are the reportable segments based on profit or loss?

- V, W, and X (OPERATING SEGMENT)

This study source was downloaded by 100000831802403 from CourseHero.com on 11-14-2021 18:19:58 GMT -06:00

https://www.coursehero.com/file/67786589/confra-reviewer-finalsdocx/

Powered by TCPDF (www.tcpdf.org)