Docsity
Log inSign up
Docsity
Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity

Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan

Guidelines and tips
Guidelines and tips
Sell on Docsity
Sell on Docsity
Log inSign up

Prepare for your exams

Study with the several resources on Docsity

Find documents

Prepare for your exams with the study notes shared by other students like you on Docsity

Search Store documents

The best documents sold by students who completed their studies

Search through all study resources
Docsity AINEW

Summarize your documents, ask them questions, convert them into quizzes and concept maps

Explore questions

Clear up your doubts by reading the answers to questions asked by your fellow students

Earn points to download

Earn points by helping other students or get them with a premium plan

Share documents
download point icon20 Points

For each uploaded document

Answer questions
download point icon5 Points

For each given answer (max 1 per day)

All the ways to get free points
Get points immediately

Choose a premium plan with all the points you need

Study Opportunities

Choose your next study program

Get in touch with the best universities in the world. Search through thousands of universities and official partners

Community

Ask the community

Ask the community for help and clear up your study doubts

University Rankings

Discover the best universities in your country according to Docsity users

Free resources

Our save-the-student-ebooks!

Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors

From our blog

Exams and Study
Go to the blog

Conceptual Framework and Accounting Standard (CFAS) Final Exam, Exams of Accounting

Mindanao State University (MSU)Accounting

This document is provided to help every students who want to pass the final exam in CFAS

Typology: Exams

2023/2024

Uploaded on 03/12/2024

johair-macapantao
johair-macapantao 🇵🇭

1 document

1 / 13

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
Conceptual Framework and
Accounting Standards
FINAL COMPREHENSIVE
EXAM
1. Inventories include all of the
following assets, except
a. Held for sale in the ordinary
course of business.
b. In the process of production for
sale.
c. In the form of materials or
supplies to be consumed in the
production process or in the
rendering of services.
d. Held for use in the production
or supply of goods or services.
2. The cost of inventory is the sum of
a. Cost of purchase and cost of
conversion
b. Direct cost, indirect cost and
other cost
c. Cost of purchase, cost of
conversion and other cost
incurred in bringing the
inventory to the present
location and condition.
d. Cost of conversion and other
cost incurred in bringing the
inventory to the present
location and condition.
3. Non- adjusting events after reporting
period that requires disclosures include
all of the following, except
a. A major business combination
after reporting period.
b. Announcing a plan to discontinue
an operation.
c. Expropriation of major asset after
reporting period.
d. Destruction of a major production
plant by a fire before the end of
thr reporting period.
4. Which of the following events after
the reporting period would require
disclosure in the financial statements?
a. Retirement of the president
b. Settlement of litigation when the
event that gave rise to the
litigation occurred prior to the
end of reporting period.
c. Strike of employees
d. Issue of a large amount of
ordinary shares.
5. Theoretically, cash discounts
permitted on purchased raw materials
should be
a. Added to other income, whether
taken or not
b. Added to other income, only if
taken
c. Deducted from inventory,
whether taken or not
d. Deducted from inventory, only if
taken
6. The use of purchase discount account
implies that the recorded cost of a
purchased inventory is
a. Invoice price
b. Invoice price plus any purchase
discount lost
c. Invoice price less the purchase
discount taken
d. Invoice price less the purchase
discount allowable whether
taken or not.
7. The amount of any writedown of
inventory to net realizable value and all
losses of inventory shall be
a. Recognized as operating
expense in the period the
writedown or loss occurs.
b. Recognized as other expense in
the period the writedown or
loss occurs.
c. Recognized as component of
cost of goods sold in the period
the writedown or loss occurs.
d. Deferred until the related
inventory is sold.
8. Lower of Cost and Net Realizable
Value of Inventory
a. Is always either the net
realizable value or cost.
b. Must be equal to net realizable
value
c. May sometimes be less than net
realizable value.
pf3
pf4
pf5
pf8
pf9
pfa
pfd

Partial preview of the text

Download Conceptual Framework and Accounting Standard (CFAS) Final Exam and more Exams Accounting in PDF only on Docsity!

Conceptual Framework and

Accounting Standards

FINAL COMPREHENSIVE

EXAM

  1. Inventories include all of the following assets, except a. Held for sale in the ordinary course of business. b. In the process of production for sale. c. In the form of materials or supplies to be consumed in the production process or in the rendering of services. d. Held for use in the production or supply of goods or services.
  2. The cost of inventory is the sum of a. Cost of purchase and cost of conversion b. Direct cost, indirect cost and other cost c. Cost of purchase, cost of conversion and other cost incurred in bringing the inventory to the present location and condition. d. Cost of conversion and other cost incurred in bringing the inventory to the present location and condition.
  3. Non- adjusting events after reporting period that requires disclosures include all of the following, except a. A major business combination after reporting period. b. Announcing a plan to discontinue an operation. c. Expropriation of major asset after reporting period. d. Destruction of a major production plant by a fire before the end of thr reporting period.
  4. Which of the following events after the reporting period would require disclosure in the financial statements? a. Retirement of the president b. Settlement of litigation when the event that gave rise to the litigation occurred prior to the end of reporting period. c. Strike of employees d. Issue of a large amount of ordinary shares.
  5. Theoretically, cash discounts permitted on purchased raw materials should be a. Added to other income, whether taken or not b. Added to other income, only if taken c. Deducted from inventory, whether taken or not d. Deducted from inventory, only if taken
  6. The use of purchase discount account implies that the recorded cost of a purchased inventory is a. Invoice price b. Invoice price plus any purchase discount lost c. Invoice price less the purchase discount taken d. Invoice price less the purchase discount allowable whether taken or not.
  7. The amount of any writedown of inventory to net realizable value and all losses of inventory shall be a. Recognized as operating expense in the period the writedown or loss occurs. b. Recognized as other expense in the period the writedown or loss occurs. c. Recognized as component of cost of goods sold in the period the writedown or loss occurs. d. Deferred until the related inventory is sold.
  8. Lower of Cost and Net Realizable Value of Inventory a. Is always either the net realizable value or cost. b. Must be equal to net realizable value c. May sometimes be less than net realizable value.

d. Must be equal to estimated selling price less cost to complete.

  1. The carrying amount of property, plant and equipment shall be derecognized a. On disposal b. When no future economic benefits are expected from the use of the asset. c. On acquisition d. On disposal ad when no future economic benefits are expected from the use of the asset.
  2. Which of the following shall not be capitalized into the cost of property, plant and equipment? a. Cost of excess materials from a purchasing error b. Cost of testing whether the asset works correctly c. Initial delivery and handling cost d. Cost of preparing the site for installation
  3. Major spare parts and standby equipment which are expected to be used over a period of more than one year shall be classified as a. Property, Plant and Equipment b. Inventory c. Noncurrent investment d. Expense
  4. An entity imported machinery to be installed in the new factory premises before year- end. What is the proper treatment of freight and interest on the loan to fund the cost of machinery? a. Both freight and interest are capitalized b. Interest may be capitalized but freight is expensed. c. Freight is capitalized but interest cannot be capitalized. d. Both freight and interest are expensed.
  5. The useful life of property, plant and equipment is I. The period of time over which an asset is expected to be used by the entity. II. The number of production or similar units expected to be obtained from the asset by the entity. a. I only b. II only c. Both I and II d. Neither I nor II
  6. A change in accounting policy includes all of the following , except a. The initial adoption of a policy to carry assets at revalued amount. b. The change from cost model to revaluation model in measuring property , plant and equipment. c. The change in inventory valuation from FIFO to weighted average method. d. The change in depreciation method from sum of years’ digits to straight line.
  7. Which of the following terms best describes applying a new accounting policy to transactions as if that policy had always been applied? a. Retrospective application b. Retrospective restatement c. Prospective application d. Prospective restatement
  8. Why is an entity permitted to change an accounting policy? a. The change would allow the entity to present a more favorable profit picture. b. The change would result in the financial statements providing more reliable and relevant information about financial position, financial performance and cash flows. c. The change is made by the internal auditor. d. The change is made by the CPA.
  9. The initial application of a policy to revalue assets is

a. Cost of opening a new facility b. Cost of introducing a new product or service, including cost of advertising and promotional activities c. Cost of conducting business in a new location d. Cost of testing the asset

  1. What is the revalued amount of property plant and equipment? a. Fair value b. Depreciated replacement cost c. Replacement cost d. Fair value and depreciated replacement cost
  2. Inventories shall be measured at a. Cost b. Net realizable value c. Lower of cost and net realizable value d. Higher of cost and net realizable value
  3. Consumable stores or supplies to be consumed in the production process are reported as a. Inventory b. Property, plant and equipment c. Investment property d. Intangible asset
  4. Net Realizable value is a. Current replacement cost b. Estimated selling price c. Expected selling price less expected cost to complete and expected cost of disposal d. Estimated selling price less estimated cost to complete and estimated cost of disposal
  5. The costs of inventory of a service provider include which of the following? a. Labor and other cost of personnel directly engaged in providing the service. b. Compensation of supervisor directly engaged in providing the service. c. Attributable overhead incurred in providing the service. d. All of these are included.
  6. Property , Plant and equipment are defined as a. Tangible assets held for sale in the ordinary course of business. b. Tangible assets held to earn rentals or for capital appreciation. c. Tangible assets held for use in the production or supply of goods or services or for administrative purposes. d. Tangible assets held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and expected to be used during more than one reporting period.
  7. Which of the following statements best describes the term “ depreciation”? a. The systematic allocation of the cost of an asset less residual value over the useful life b. The removal of an asset from the statement of financial position c. The amount by which the recoverable amount of an asset exceeds carrying amount d. The amount by which the carrying amount of an asset exceeds recoverable amount.
  8. A change in measurement basis is a. A change in accounting estimates b. A change in accounting policy c. A correction of an error d. Not an accounting change
  9. This means correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period had never occurred. a. Retrospective application b. Retrospective restatement c. Prospective application d. Prospective restatement
  1. When it is difficult to distinguish between a change in accounting estimate and a change in accounting policy, the change is treated as a. Change in accounting estimate with appropriate disclosure. b. Change in accounting policy. c. Correction of an error. d. Change in accounting estimate with no appropriate disclosure.
  2. Depreciation is best described as a method of a. Asset valuation b. Current value allocation c. Cost allocation d. Useful life determination
  3. Under the cost model, an item of property, plant and equipment shall be carried subsequently at a. Cost b. Revalued amount c. Cost less accumulated depreciation and any accumulated impairment loss d. Revalued asset less accumulated depreciation and any accumulated impairment loss
  4. Which of the following statements in relation to the cost of an asset is true? a. The cost includes cash equivalents paid b. The cost includes the fair value of any non-monetary consideration given to acquire an asset. c. the cost includes non- refundable purchase taxes. d. All of the statements are true.
  5. What is the inventory pricing procedure in which the oldest costs rarely have an effect on the ending inventory? a. FIFO b. LIFO c. Specific identification d. Weighted average
    1. The inventory of a service provider may simply be described as a. Work in progress b. Unbilled services c. Billed services d. Services inventory
    2. Inventories are usually written down to net realizable value a. Item by item b. By classification c. By total d. By segment
    3. A party is related to an entity if the party, directly or indirectly, through one or more intermediaries a. Controls, is controlled by or is under common control with the entity. b. Has an interest in the entity that gives it significant influence over the entity c. Has joint control over the entity d. All of these define a related party
    4. The cost of purchase of inventory does not include a. Purchase price b. Import duties and irrecoverable taxes c. Freight, handling and other cost directly attributable to the acquisition of goods d. Trade discounts, rebates and other similar items
    5. Significant influence is a. The power to govern the financial and operating policies of an entity so as to obtain benefits from the activities. b. The power to participate in the financial and operating policy decisions of an entity but not control of the policies. c. The holding of a significant proportion of shares.

d) Flexible pesos

  1. Accounting is a service activity and the function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision. This accounting definition is given by a) Accounting Standard Council b) AICPA Committee on Accounting Terminology c) American Accounting Association d) Board of Accountancy
  2. All of the following describe accounting, except a) A service activity b) An information system c) A universal language of business d) An exact science rather than an art
  3. The important points made in the definition of accounting include all of the following, except a) Accounting information is quantitative b) Accounting information is both quantitative and qualitative c) Accounting information is financial in nature d) Accounting information is useful in decision making
  4. This accounting process is the recognition or nonrecognition of business activities as accountable events. a) Identifying b) Measuring c) Communicating d) Reporting
  5. Theses are the events that affect the entity and in which other entities participate. a) Internal events b) External events c) Current events d) Obligating events
  6. which of the following statements is incorrect in relation to accountable events? a) An event Is accountable when it has an effect on asset, liability or equity. b) The subject matter of accounting is the measurement of economic resources and obligations. c) Only economic activities are emphasized and recognized in accounting. d) Sociological and psychological matters are quantifiable.
  7. The “measuring” component of accounting is a) The recognition or nonrecognition of business activities as accountable events. b) The assigning of peso amounts to the accountable events. c) The preparation and distribution of accounting reports to potential users of accounting information. d) The preparation of audit report by CPAs.
  8. The most common financial attribute used in measuring financial information is a) Historical cost b) Current cost c) Realizable cost d) Present value
  9. The communication process of accounting includes all of the following, except a) Recording b) Classifying c) Summarizing d) Interpreting
  10. The overall objective of accounting is a) To provide the information that the managers of an entity need to control the operations. b) To provide information that the creditors can use in deciding whether to make additional loans. c) To measure the periodic income of the entity. d) To provide quantitative financial information about an entity that is

useful in making economic decision.

  1. What is the law regulating the practice of accountancy? a) R.A No. 9298 b) R.A No. 9198 c) R.A No. 9928 d) R.A No. 9892
  2. It is the body authorized by aw to promulgate rules and regulations affecting the practice of the accountancy profession in the Philippines. a) Board of Accountancy b) Philippine Institute of Certified Public Accountants (PICPA) c) Securities and Exchange Commission (SEC) d) Financial Reporting Standards Council (FRSC)
  3. Generally Accepted Accounting Principles a) Are accounting principles based on law. b) Derive their credibility and authority from legal rulings and court precedents. c) Derive their credibility and authority from the national government through a regulatory authority. d) Derive their credibility and authority from general recognition and acceptance by the accountancy profession.
  4. Which of the following statements best describes generally accepted accounting principles? a) The accounting principles have been formulated in the public sector. b) The accounting principles have been developed on the basis of such factors as usage and practical necessity. c) The accounting principles are the same as laws within our legal system. d) The accounting principles do not apply to small entities. 68. What is the only underlying assumption mentioned in the Conceptual Framework for Financial Reporting? a) Going concern b) Accounting entity c) Time period d) Monetary unit 69. Which of the following statements best describes the term “ going concern”? a) When current liabilities of an entity exceed current assets b) The ability of the entity to continue in operation for foreseeable future c) The potential to contribute to the flow of cash and cash equivalents to the entity d) The expenses exceed income 70. Which basic assumption may not be followed when as entity in bankruptcy reports financial results? a) Economic entity assumption b) Going concern assumption c) Time period assumption d) Monetary unit assumption 71. The financial statements that are prepared for the business are separate and distinct from the financial statements of the owners. a) Going concern assumption b) Matching principle c) Economic entity assumption d) Accounting period assumption 72. Which underlying assumption serves as the basis for preparing financial statements at regular artificial points in time? a) Accounting entity b) Going concern c) Accounting period d) Stable monetary unit 73. The concept of accounting entity is applicable a) Only to the legal aspects of business organizations
  1. The users of financial reports include which of the following? I. Creditors II. Government agencies III. Unions a) I only b) I and II only c) I and III only d) I, II and III
  2. The overall objective of financial reporting is to provide information a) That is useful for decision making b) About assets, liabilities and owners’ equity c) About financial performance during a period d) That allows owners to assess management performance
  3. Which of the following statements best describes the term “ financial position”? a) The net income and expenses b) The net of financial assets less liabilities c) The potential to contribute to the flow of cash and cash equivalents d) The assets, liabilities and equity.
  4. Which of the following best describes the term “ financial performance”? a) The revenue, expenses and net income or loss for a period b) The assets, liabilities and equity c) The total assets minus total liabilities d) The total cash inflow minus cash outflows
  5. In measuring financial performance, accrual accounting is used because a) Cash flows are considered less important b) It provides a better indication of ability to generate cash flows than cash basis c) It recognizes revenue when cash is received and expenses when cash is paid d) It is one of the implicit assumptions 88. The accounting equation “assets = liabilities + equity is a) Entity theory b) Fund theory c) Proprietary theory d) Residual equity theory 89. The primary accounting objective is fair presentation of financial performance of the entity. a) Entity b) Proprietary c) Residual equity d) Fund 90. The overriding qualitative characteristic of accounting information is a) Relevance b) Understandability c) Faithful representation d) Decision usefulness 91. According to the Conceptual Framework, predictive value and confirmatory value are ingredients of a) Relevance b) Faithful representation c) Understandability d) Comparability 92. An enhancing quality of accounting information is a) Predictive value b) Free from error c) Timeliness d) Confirmatory value 93. An ingredient of the fundamental qualitative characteristic of faithful representation is a) Neutrality b) Understandability c) Verifiability d) Timeliness 94. The ability through consensus among measures to ensure that information represents what is purports to represent is an example of the concept of a) Relevance

b) Verifiability c) Comparability d) Feedback value

  1. The usefulness of providing information in financial statements is subject to the constraint of a) Consistency b) Cost- benefit c) Reliability d) Representational faithfulness
  2. Which of the following attributes is the most relevant? a) Present value b) Exit value c) Current cost d) Historical cost
  3. Revenue may be recognized a) At the point of sale b) During production c) At the end of production d) All of the choices may be acceptable for revenue recognition.
  4. Which is done first in the accounting process? a) Financial statements are prepared b) Adjusting entries are recorded c) Nominal accounts are closed d) A post-closing trial balance is prepared
  5. Financial statements must be prepared at least a) Annually b) Quarterly c) Semiannually d) Every two years
  6. It is the presentation and classification of financial statement items on a uniform basis from one accounting period to the next. a) Comparable information b) Consistency of presentation c) Aggregation d) Accrual

ANSWER SHEET