Sas#12 Acc109

ACC 109: Intermediate Accounting 4
Module #12 Student Activity Sheet
Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________
PERIOD 2 QUIZ #1
Multiple Choice
1. Which of the following statements is correct?

a. PAS 1 Presentation of Financial Statements prescribes the basis for presentation of general and special
purpose financial statements to improve both inter-comparability and intra-comparability.
b. Intra-comparability is also referred to as horizontal comparability while inter-comparability is also referred
to as vertical comparability.
c. Working capital is the net amount of a company’s relatively liquid resources. It is the excess of total assets
over total liabilities.
d. Equity is the residual interest in the net assets of an entity.
2. According to PAS 1, these are financial statements intended to serve the needs of users who do not have
the authority to demand financial reports tailored for their own needs.
a. General purpose financial statements
b. Common purpose financial statements
c. Regular financial statements
d. All-purpose financial statements
3. The assessment of an entity’s going concern shall cover a minimum period of

a. one year c. three years
b. three months d. any of these
4. In which of the following instances would a liability that would otherwise be presented as current is presented
as noncurrent?
a. The liability is payable on demand but the entity estimates that it is probable that the lender will not
demand payment within 12 months after the reporting period.
b. The liability is payable on demand but the lender promises the entity after the reporting period that the
lender will not demand payment in the next 12 months.
c. The entity enters into a refinancing agreement after the reporting period but before the financial
statements are authorized for issue.
d. The entity enters into a refinancing agreement and the refinancing agreement is completed by the
balance sheet date.
5. In a classified balance sheet, deferred tax assets/liabilities are presented as

a. non-current items if the deferred taxes are not expected to reverse within 12 months after the reporting
period
b. noncurrent items
c. current items
d. a or c
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6. General purpose financial statements are those statements that cater to the
a. common and specific needs of a wide range of external and internal users.
b. common needs of a wide range of external and internal users.
c. common needs of a wide range of external users.
d. specific needs of a wide range of external users.
7. In virtually all circumstances, a fair presentation is achieved by compliance with applicable IFRSs. A fair
presentation also requires an entity: (choose the incorrect statement)
a. to select and apply accounting policies in accordance with PAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors. PAS 8 sets out a hierarchy of authoritative guidance that management
considers in the absence of a Standard or an Interpretation that specifically applies to an item.
b. to present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information.
c. to provide additional disclosures when compliance with the specific requirements in PFRSs is insufficient
to enable users to understand the impact of particular transactions, other events and conditions on the
entity’s financial position and financial performance.
d. to establish a system of internal control the responsibility for which is the entity’s management.
Furthermore, the entities financial statements should be audited by an independent external party at least
annually.
8. Each component of the financial statements shall be identified clearly. In addition, the following information
shall be displayed prominently, and repeated when it is necessary for a proper understanding of the
information presented:
I. The name of the reporting entity or other means of identification, and any change in that information from
the preceding balance sheet date;
II. Whether the financial statements cover the individual entity or a group of entities;
III. The balance sheet date or the period covered by the financial statements, whichever is appropriate to that
component of the financial statements;
IV. The presentation currency, as defined in PAS 21 The Effects of Changes in Foreign Exchange Rates
V. The level of rounding used in presenting amounts in the financial statements.
a. I, II, III c. I, II, IV, V

b. I, II, III, IV d. I, II, III, IV, V
9. When an entity’s balance sheet date changes and the annual financial statements are presented for a period
longer or shorter than one year, an entity shall disclose, in addition to the period covered by the financial
statements:
I. The reason for using a longer or shorter period
II. The fact that comparative amounts for the income statement, statement of changes in equity, cash flow
statement and related notes are not entirely comparable
III. The amounts charged to the beginning balance of the retained earnings, net of tax
IV. Pro-forma financial statements, as a supplemental information in the notes


a. I, II c. I, III, IV
b. I, III d. I, II, III, IV
10. All of the following statements are correct, except

a. The operating cycle of an entity is the time between the acquisition of assets for processing and their
realization in cash or cash equivalents.
b. When the entity’s normal operating cycle is not clearly identifiable, its duration is presumed to be twelve
months.
c. Current assets include assets (such as inventories and trade receivables) that are sold, consumed or
realized as part of the normal operating cycle even when they are not expected to be realized within
twelve months after the balance sheet date.
d. Some liabilities are part of the working capital used in the entity’s normal operating cycle. Such operating
items are classified as current liabilities even if they are due to be settled more than twelve months after
the balance sheet date.
e. When an entity presents current and non-current assets and current and non-current liabilities as
separate classifications on the face of its balance sheet, it shall classify deferred tax assets (liabilities) as
current assets (liabilities) if the deferred tax assets (liabilities) are expected to reverse within twelve
months after the end of reporting period.
****end***

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ACC 109: Intermediate Accounting 4

Module #12 Student Activity Sheet

Name: ___________________________________________________________ Class number: _

1. Which of the following statements is correct?

3. The assessment of an entity’s going concern shall cover a minimum period of

5. In a classified balance sheet, deferred tax assets/liabilities are presented as

This document is the property of PHINMA EDUCATION

Name: ___________________________________________________________ Class number: _

a. I, II, III c. I, II, IV, V

This document is the property of PHINMA EDUCATION

Name: ___________________________________________________________ Class number: _

10. All of the following statements are correct, except

This document is the property of PHINMA EDUCATION

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