FINAL EXAM SIMULATION 2

1. It describes the objective of, and the concepts for, general purpose financial reporting.
a. Conceptual Framework for Financial Reporting
b. Conceptual Framework for Financial Reports
C. Conceptual Framework for Financial Statements
d. Conceptual framework in Financial Statement Preparation

2. What are the elements of faithful representation?

a. Completeness, neutrality, freedom from bias, and freedom from error
b. Completeness, neutrality, and freedom from bias
C. Neutrality, prudence and freedom from bias
d. Completeness, neutrality, and freedom from error

3. It is an entity-specific
aspect of relevance based on the nature or magnitude, or both, of
the items to which the information relates in the context of an individual entity's financial
report.
a. Usefulness
b. Predictive value
 C. Confirmatory value
d. Materiality

4. Which of the following is an enhancing qualitative characteristic' according to the lASB

Conceptual Framework?
a. Materiality
b. Relevance
C. Timeliness
d. Faithful Representation

5. It refers to the use of the same methods for the same items, either from period to period
within a reporting entity or in a single period across entities.
a. Consistency
b. Comparability
C. Uniformity
d. Rigidity

6. Which of the following is an enhancing qualitative characteristic?

a. Comparability
b. Conistency
C. Prudence
d. Completeness

7. Which of the following is not true?

a. The objective of general purpose reporting is to provide information about
the reporting entity that is useful to primary users.
b. General-purpose reports are intended to show the actual and true value of the
Company in order for the decision-makers to make a sound and economic
decision.
C. If a requirement in an accounting standard differs from that required by the
conceptual framework, the former shall prevail.
d. One of the primary users of the financial reports are those persons who might
have an interest in investing in the company

8. Which of the following statements is true?

a. Cash basis accounting depicts the effects of transactions and other events and
circumstances on a reporting entity's economic resources and claims in the
periods in which those effects occur, even if the resulting cash receipts and
payments occur in a different period.
b. Information about the nature and amounts of a reporting entity's economic
resources and claims can help users to assess management's stewardship
of the entity's economic resources.
C. The considerations in applying the qualitative characteristics and the cost
constraint are the same for different types of information.
d. Changes of economic resources and claims against the entity refers only to
income and expenses of the company

9. The Conceptual Framework defines an asset as:

a. None of the above
b. A right to receive income or reduce expenses in the future
 C. resource controlled by the entity as a result of past events and from which
A
future economic benefits are expected to flow to the entity.
d. A present economic resource controlled by the entity as a result of past
events
10. Based on the latest Framework, what are the fundamental qualitative characteristics of
financial information?
a. Relevance and Faithful representation
b. Reliability and Faithful representation
C. Relevance, Reliability, and Faithful representation
d. Relevance and Reliability

process of
11. Recognition is the
Determining where an item should be presented in the financial statements
b. Determining the amount at which an item should be shown in the financial
statements
C. Incorporating an item in the financial statements
d. Disclosing information in the notes to the financial statements

12. When shall an entity classify a non-current asset as held for sale in accordance with
PFRS 5?
a. When the carrying amount of the non-current asset will be recovered
principally through sale transaction rather than through continuing use.
b. When the carrying amount of the non-current asset will be recovered principally
through continuing use rather than selling the same.
C. When the entity purchased such non-current asset for the purpose of reselling it
in the ordinary course of business
d. When fair-value less cost to sell is greater than the recoverable amount.

13. Which is not a purpose of the Conceptual Framework?

a. Prescribe the basis for presentation of general purpose financial reports to
ensure comparability both with the entity's financial reports of previous
periods and with the financial reports of other entities.
b Assist the International Accounting Standards Board to develop IFRS Standards
that are based on consistent concepts.
C.
Assist preparers to develop consistent accounting policy when no Standards
applies to a particular transaction or other event, or when Standard allows a
choice of accounting policy.
d. Assist all parties to understand and interpret the Standards.

14. Which of the following statements is not true?

a. Revisions of the Conceptual Framework will automatically lead to changes
to the Standards
b. The Conceptual Framework is not a Standard
C. Nothing in the Conceptual Framework overrides any Standard or any
requirement in a Standard
d To meet the objective of general purpose financial reporting, the Board may
sometimes specify requirements that depart from aspects of the Conceptual
Framework
15. A depreciable asset was originally acquired for 5 million. Its carrying amount at the end
of the current year is 3 million. The asset's fair value less cost to sell is 2 million while it's
value in use is 4 million. Is the asset impaired?
a. No, because the value in use is higher than the carrying amount.
b. Yes, because the fair value less cost to sell is lower than the carrying amount
C. Yes, because the value in use is higher than the carrying amount.
d. No, because the fair value less cost to sell is lower than the carrying amount.

16. An Asset is impaired when it's:

a. Carrying amount is higher that its recoverable amount
b. Carrying amount is lower that its recoverable amount
C. Value in use is higher than its fair value
d. Value in use is lower that its fair value

17. Which of the following statements is false?

a. Entities are required to report cash flow from operating activities using the
direct method.
b. Equity investments are generally excluded from cash equivalent
C. Cash flows exclude movements between items that constitute cash or cash
equivalents
d. Cash flows arising from transactions in a foreign currency shall be recorded in an
entity's functional currency by applying to the foreign currency amount the
exchange rate between the functional currency and the foreign currency at the
date of the cash flow.

18. How should inventories be subsequently measured?

a. Cost model
b. Cost model or fair value model
C. Cost model of revaluation model
d. Lower of cost and net realizable value

19. An entity shall not prepare financial statements on a going concern basis when:
I. Management intents to liquidate
II. Management intends to cease trading
IlI. The entity reports a net loss in the previous period
a. I
and II

b. Ionly
C. land |l|
d. I, Il and ll
20. Which of the following cost assignment methods is not alowed by PAS 2?
a. Last in, First out
b. First in, First out
C. Specific identification of cost
d. Weighted average

21. Which of the following will form part of the Other Comprehensive Income?
a. Change in the fair value of a liability designated as at fair value through
profit or loss that is due to changes in the liability's credit risk.
b. Change in the fair value of biological assets and agricultural produce
 C. Change in the fair value of investment properties measured using the fair value
model.
d. Loss on inventory write-down due to a decline in the net realizable value.

22. Two items remained in the ending inventory. Item A had an original cost of 100,000 while
Item B had an original cost of 200,000. The combined cost of the two items then is
300,000. Item A's net realizable value is 150,000 while Item B's net realizable value is
also 150,000. The combined net realizable value of the two items is also 300,000. What
amount should be presented in the statement of financial position for the two items of
inventory?
a. 250,000
b. 350,000
C. 300,000
d. 200,000

23. is correcting the recognition, measurement and disclosure of amounts of

elements of financial statements as if a prior period error had never occurred.
a. Retrospective restatement
b. Retrospective application
C. Prospective application

24. Which of the following statements is false?

a. An investment property is classified as a non-current asset.
b. An owned investment property shall be measured initially at its cost.
C Transaction costs shall be included in the initial measurement of an investment
property.
d. A gain or loss arising from a change in the fair value of investment property
shall be recognized in the other comprehensive income for the period in
it
which arises.

25. It isan asset that necessarily takes a substantial period of time to get ready for its
intended use or sale.
a. qualifying assets
biological assets
b.
C. Non-current assets
d. intangible assets

26. An investment property is to be subsequently measured using:

a. either the cost model or the fair value model
b. either the cost model or the revaluation model
C either the fair value model or the revaluation model
d. the cost model

27. Which of the following statements is true?

a. An owner-managed hotel is an investment property.
b. a building that is vacant but is held to be leased out under one or more operating
leases is an owner-occupied property.
C. Land held for a currently undetermined future use is an investment
property.
 d. Investment property is land, building or machinery held by the owner or by the
lessee as a right-of-use asset to earn rentals or for capital appreciation or both.
28. Which of the following statements is false?
a.
If an owner-occupied property becomes an investment property that will be
carried at fair value, the entity shall treat any difference at that date between the
carrying amount of the property and its fair value in the same way as a
revaluation in accordance with PAS 16.
b. For a transfer from inventories to investment property that will be carried at fair
value, any difference between the fair value of the property at that date and its
previous carrying amount shall be recognized in profit or loss.
C. When an entity decides to dispose of an investment property without
development, it reclassifies the asset as inventory.
d. For a transfer from investment property carried at fair value to owner-occupied
property or inventories, the property's deemed cost for subsequent accounting
shall be its fair value at the date of change in use.

29. Which of the following should not form part of the cost of an inventory?
a. refundable import duties
b. purchase price
C. transport costs
d. handling costs

30. Which of the following statements is false?

a. The income and related expenses of incidental operations of the
development of an intangible asset are usually recognized as part of the
cost of the intangible asset.
b. An intangible asset shall be measured initially at cost.
C. Internally generated brands, mastheads. publishing titles, customer lists and
items similar substance shall not be recognized as intangible assets.
in
d. No intangible asset arising from research or from the research phase of an
internal project shall be recognized.

31. Which of the following is to be applied prospectively?

a. Change of measuring PPE from Cost Model to Revaluation Model
b. Change of method of recognizing amortization from Straight-line method to
Diminishing balance method.
C. Change of valuation of inventories from First-in-First-out to Weighted Average

32. An intangible asset is to be subsequently measured using:

a. the cost model
b. either the fair value model or the revaluation model
C. either the cost model or the fair value model
d. either the cost model or the revaluation model
33. J
34. J
35. Under what models should property, plant, and equipment be subsequently measured?
a lower of cost and net realizable value
b. Cost model or revaluation model
C. Cost model
 d. Cost model or fair value model

36. An entity that presents cost of sales, distribution costs, administrative expenses, and
other expenses in the statement of profit or loss is using the natural presentation.
a True
b. False

37. Which of the following should form part of the cost of an inventory?
a. abnormal amounts of wasted materials, labour or other production costs
b. administrative overheads
C. storage costs necessary in the production process before a further
production stage
d. selling costs

38. Which of the following is to be classified as a current asset?

a. Biological assets
b. Investment property
C. Inventory
d. Investment in associate

39. Which of the following is to be classified as a current asset?

a. Intangible assets
b. Non-current assets held for sale
C. Property, plant, and equipment
d. Deferred tax asset

40. Which of the following statements is false?

a. Income earned through using a building site as a car park until
construction starts wilI be treated as a reduction to the cost of the
to-be-constructed building.
b. If an item of property, plant, and equipment is revalued, the entire class of
property, plant, and equipment to which that asset belongs shall be revalued.
C The cost of an item of property, plant, and equipment can include the initial
estimate of the costs of dismantling and removing the item and restoring the
site on which it is located
d. An item of property, plant, and equipment that qualifies for recognition as an
asset shall be measured at its cost.
41. Which of the following statemnents is false?
a. When an entity presents current and non-current assets, and current and
non-current liabilities, as separate classifications in its statement of financial
position, it shall not classify deferred tax assets (liabilities) as current assets
(liabilities).
b. An entity shall present a complete set of financial statements (including
comparative information) at least annually.
C. An entity shall present additional line items (including by disaggregating the
line items listed in paragraph 82), headings, and subtotals in the statements)
presenting profit or loss and other comprehensive income when such
 presentation is relevant to an understanding of the entity's financial
performance.
d. PAS1 requires assets and liabilities to be presented based on liquidity
42. An entity shall classify a liability as non-current when:
a. the liability is due to be settled within twelve months after the reporting period
b. it expects to settle the liability in its normal operating cycle
C. it holds the liability primarily for the purpose of trading
d. it has an unconditional right to defer settlemnent of the liability for at
least twelve months after the reporting period is
43. These are the specific principles, bases, conventions, rules, and practices applied by
an entity in preparing and presenting financial statements.
a. reclassification adjustments
b. prior period errors
c. Accounting estimates
d. Accounting policies

44. Which of the following is to be classified as a Current asset?

a. financial assets at fair value through other comprehensive income
b. financial assets at amortized cost
C. financial assets at fair value through profit or loss

45. Which of the following statements is false?

a. The correction of a prior period error is excluded from profit or loss for the
period in which the error is discovered.
b. the revision of an estimate relates to prior periods and is a correctionof
an error.
C. PFRSS are accompanied by guidance to assist entities in applying their
requirements and a guidance that is an integral part of the PFRSS is
mandatory.
d. When it is dificult to distinguish a change in an accounting policy from a
change in an accounting estimate, the change is treated as a change in an
accounting estimate.

46. Which of the following statements is true?

a. Monetary assets are money held and assets to be received in fixed or
determinable amounts of money.
b. Development is original and planned investigation undertaken with the
prospect of gaining new scientific or technical knowledge and understanding.
C. Intangible assets are unidentifiable non-monetary asset without physical
substance.
d. PAS 38 shall apply to all intangible assets.

47. It is the systematic allocation of the depreciable amount of an asset over its useful
life.
a. Impairment
b. Amortization
C. Depreciation
 d. Revaluation

48. RecOverable amount is the:

a. Higher between an asset's fair value less costs to sell and value in use
b Lower between an asset's fair value less costs to selland value in use
C Lower between an asset's fair value less costs to sell and carrying amount
d. Higher between an asset's fair value less costs to sell and carrying amount

49. Which of the following statements is false?

a. An entity shall begin capitalizing costs as part of the cost of a qualifying
asset on the completion date.
b. Capitalizable borrowing costs from a specific-type of borrowing shall be the
actual borrowing costs less any investment income on the temporary investment
of the specific-type of borrowings.
C
Borrowing costs incurred while land is under development are capitalized during
the period in which activities related to the development are being undertaken.
d. Borrowing costs incurred while land acquired for building purposes is held
without any associated development activity do not qualify for capitalization.

50. These are amounts reclassified to profit or loss in the current period that were
recognized in other comprehensive income in the current or previous periods.
a. Reclassification adjustments
b. Revaluation change
c. Change in accounting policy
d. Prior period errors

51. When shall an entity classify a non-current asset as held for sale in accordance with
PFRS 5?
a. When the carrying amount of the non-current asset will be recovered
principally through sale transaction rather than through continuing use.
b. When fair value less cost to sell is greater than the recoverable amount
C. When the entity purchased such non-current asset for the purpose of reselling it
in the ordinary course of business
d. When the carrying amount of the non-current asset will be recovered principally
through continuing use rather than selling the same

52. A financial asset shall be measured at fair value through other comprehensive income if:
I. The financial asset is held within a
business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets
II. The contractual terms of the financial asset give rise on specified dates to cash flows

that are solely payments of principal and interest on the principal amount outstanding
a. land II

b. lonly
C.
Ilonly
d. Either or I
I|

53. An entity shall derecognize a financial asset it has transferred if:

a. The entity transfers substantially all the risks and rewards of ownership of
the financial asset
b. The entity retains substantially all the risks and rewards of ownership of the
financial asset
 C. The entity neither transfers nor retains substantially all the risks and rewards of
ownership of the financial asset but hsa retained control of the financial asset

54. A related party transactions is a transfer of resources, services or obligations between a

reporting entity and a related party, regardless of whether a price is charged
a. True
b. False

55. Which of the following are not included in costs to sell?

a. Transport and other costs necessary to get the assets to a market
b. Commissions to brokers and dealers
C. Transfer taxes and duties
d. Levies by regulatory agencies

56. An entity shall measure initially a financial liability not designated at fair value through
profit loss at
a. Fair value minus directly attributable transaction costs
b. Fair value
C. Fair value plus directly attributable transaction costs
d. Face amount

57. Close members of the family of a person includes that person's children and spouse or
domestic partner.
a. True
b. False

58. Which of the following statements is not true?

a. Biological transformation is the detachment of produce from a biological
asset or cessation of a biological asset's life processes
b. Agricultural produce is measured at fair value less cost to sell at the point of
harvest
C. When the fair value of the biological asset cannot be determined reliably, the
biological asset shall be measured at cost less accumulated depreciation and
accumulated impairment losses.
d. Bearer plants may be classified as a biological asset.

59. Under PFRS, a cash flow hedge and a hedge of a net investment are accounted for by
a. Recognizing gains and losses in profit an floss.
b. Recognizing gains and losses in other comprehensive income.
C. Recognizing gains and losses when the hedge is closed out.
d. Not recognizing gains and losses.

60. Which of the following statements is false?

a. An entity shall reclassify or re-present amounts presented for non-current

assets for the assets and liabilities of disposal groups classified as held
or
for sale in the statements of financial position for prior periods toreflect the
classification in the statement of financial position for the latest period
presented.
b. A subsidiary can be a disposal group.
 C. The major classes of assets and liabilities classified as held for sale shall be
separately disclosed either in the statement of financial position or in the notes,
except for a newly acquired subsidiary.
d. An entity shall present separately any cumulative income or expense recognized
in other comprehensive incom relating to a non-current asset (or disposal group)
classified as held for sale.

61. Which of the following best describes financial performance?

a. Increases or decreases of equity other than ocntribution from or distribution to
incestors.
b. It refers to changes of equity or capital amount of the entity.
C. It is reflected by changes in its economic resources and claims
d. It measures how the management performed during the period.

62. Goodwill should be tested for impairment:

a. Every five years
b. On the acquisition of a subsidiary
C. Annually
d. If there is an indication of impairment

63. Which of the following statements is true?

a. The equity method is a method of accounting whereby the investment is initially
recognized at fair value and adjusted thereafter for the post-acquisition change in
the investor's share of the investee's net assets.
b. If an entity holds, directly or indirectly, 20% or more of the voting power of the
investee, it is presumed that the entity has no significant influence, unless it can
be clearly demonstrated that this is not the case.
C. Significant influence is the power to control or joint control of the financial and
operating policy decision of the investee.
d. An entity loses significant influence over an investee when it loses the
power to participate in the financial and operating policy decisions of that
investee.
64. A
joint venture can either be a joint operation ora joint arangement. FALSE

65. Relationship between between a parent and its subsidiaries shall be disclosedo nly if
there have been transactions between them. FALSE

66. Which of the following statements is false regarding the determination of fair value of
financial assets and liabilities for its initial measurement?
The fair value of a long-term loan or receivable that carries no interest can be
a.

measured as the present value of all future cash receipts discounted using the
prevailing market rate(s) of interest for a similar instrument with a similar credit
rating.
b. The fair value of a financial instrument at initial recognition is normally the
transaction precise and as such, determination of the fair value is never
required so long as the transaction price is available.
C If an entity originates a loan that bears an off-market interest rate and receives an
upfront fee as compensation, the entity recognized the loan at its fair value which
is equivalent to the net of the fees it receives.
 d. The best evidence of the fair value of a financial instrument at initial recognition is
normally the transaction price.

67. A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangements. TRUE

68. Which of the following is not a category of financial assets?

a. Financial assets at fair value through profit or loss
b. Financial assets held for sale.
C. Financial assets at fair value through other comprehensive income
d. Financial assets at amortized cost

69. WHlch of the following impairment losses is not governed by PAS 38

a. Inventories
b. Intangible assets
C. FInancial assets classified as subsidiaries
d. Property, plant, and equipment
70. When a component of a business has been discontinued during the year, the
component's operating loss for the currency period should be included in?
a Income statement as part of revenue and expenses
b Income from continuing operations
C Retained earnings
d. Income statement as part of the loss on disposal of the discontinued
component
71. Which of the following statements regarding the initial recognition of financial assets and
liabilities is false?
a. Option contracts that are within the scope PFRS 9 are recognzies as assets or
liabilities when the holder or writer becomes a party to the contract
b. A forward contract that is within the scope of PFRS 9 is recognized as an
asset or a liability on date on which settlement takes place
C. Assets to be acquired and liabilities to be incurred as a result of a firm
commitment to purchase or sell goods or services are generally not recognized
until at least one of he parties has performed under the agreement
d. Unconditional receivables and payables are recognized as assets or liabilities
when the entity becomes a party to the contract and, as a consequence, has a
legal right to receive or a legal obligation to pay cash
72. Which of the following statements is false in relation to PFRS 5?
a. The entity shall provide a single amount in the statement of comprehensive
income comprising the total of post-tax profit or loss of the discontinued operation
and the post-tax gain or loss recognized on the disposal of the discontinued
operation
b. The entity shall disclose, in detail, an analysis of the single amount into revenue,
expenses and other items in the notes to financial statement
C. The entity shall provide, in detail, the total revenue, cost of sales, and other
income statement items of a discontinued operation in the Statement of
Comprehensive Income
73. Land that is related to agricultural activity is measured
a. At fair value
b. In accordance with pas 16
 C. At the resale value separate from the biological asset that has been grown on the
land
d. At fair value in combination with the biological asset that has been grown on the
land
74. Which of the following is not one of the indications that the sale is highly probable?
a. The management must have an active program in locating a buyer
b. The sale must be completed within one year from classification
C. The management must be committed to a plan to sell
d. It must be for a price that is reasonable in relation to the fair market value of the
property
75. Which of the following statement is false?
If the associate becomes a subsidiary PAS 28 no longer applies
b. On acquisition of the investment, any difference between the cost of the
investment and the entity's share of the net fair value of the investee's identifiable
assets and liabilities is accounted for as goodwill or income
C. A sale of equipment from a parent to its subsidiary is an example of an
upstream transaction
d. An entity shall discontinue the use of the equity method from the date when its
investment ceases to be an associate or a joint venture
76. When an investor uses the equity method to account for investment in ordinary shares,
cash dividends received by the investor from the iinvestee shall be recorded as
a. Dividend income
b. A deduction from the investor's share of the investee's profits
C. A deduction from the investment account
d. A deduction from the shareholders' equity account, dividends to shareholder
77. When testing a cash-generating unit for impairment, any corporate asset, such as the
head office business or computer equipment should
a. Be included in the parent's assets and tested for impairment along with that cash
generating unit
b. Be allocated with impairment on a reasonable and consistent basis
C. Not be allocated to cash-generating units
d. Be separately impaired
78. A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the arrangement.
a. True
b. False
79. Which of the following statements is incorrect concerning the impairment of intangible
assets?
a Different intangible assets may be tested for impairment at different times.
b. Impairment test for intangible assets shall be performed anytime during the
annual period, as long as it is performed at the same time every year.
C. Intangible assets shall only be tested for impairment if there is an
indication of such impairment.
80. A hedge ofthe exposure to changes in the fair value of a recognized asset or liability, or
an unrecognized firm commitment, is classified as a
a. cash flow hedge
b. Fair value hedge
C. Underlying
d. Foreign currency hedge
81. is the management by an entity of the biological transformation of living animal or
It
plants for sale into agricultural produce or into additional biological assets.
 a. harvest
b. development activity
C. agricultural activity
d. biological activity
82. Which of the following is not a derivative instrument?
a. Interest rate swaps.
b. Variable annuity contracts
C. Futures contracts.
d. Credit indexed contracts.
83.Which of the following are related parties?
a. two joint venturers that share joint control of a joint venture
b. The entity and the reporting entity are members of the same group
C. Two entities simply because they have a
director or other member of key
management personnel in common
d. a customer, supplier, franchisor, distributor or general agent with whom an entity
transacts a significant volume of business
84. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require the unanimous consent
of the parties sharing control. True
85. A financial asset shall be measured at amortized cost if:
I. the financial asset is held within a
business model whose objective is to hold
financial assets in order to collect contractual cash flows True (FRS 9, Par. 4.1.2)
II. the contractual terms of
the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding. True (|FRS 9, Par. 4.1.2)
a. lonly
b. Il only
C. Iand Il|

d. Either Ior lI
86. At what amount will an entity record the non-current
asset held for sale?
a. Lower of carrying amount and fair value less costs to sell
b Lower of cost or Net realizable value
C. Lower of carrying amount and Recoverable amount
d. Lower of carrying amount and value in use
87. Which is a requirement for a component of an entity to be classified as a discontinued
operation?
a the activities must cease permanently prior to the financial statements being
authorized for issue
b. the component must be a reportable segment
C. the component must have beena cash generating unit while being held for use
d. the assets must have been classified as held for sale in the previous
financialstatements
88. The liabilities of a disposal group classified as held for sale shall be presented
separately from other liabilities in the statement of financial position. True
89. Which of the following is not necessarily a related party?
a. the wife of a person who exercises control over the reporting entity
b. one entity is a joint venture of the third arty and the other entity is an associate of
the third party
C. A major supplier of an entity
d. a child of a member of the key management personnel of the parent of the
reporting entity
90. Financial instruments sometimes contain features that separately meet the definition of a
derivative instrument. These features are classified as
a. Swaptions
b. Notional amounts
C. Underlyings
d. Embedded derivative instruments

1. Which the following statements is true?

of
Information about the nature and amounts of a reporting entity's economic
resources and claims can help users to assess management's stewardship of
the entity's economic resources.
Changes of economic resources and claims against the entity refers only to
income and expenses of the company.
Cash basis of accounting depicts the effects of transactions and other events
and circumstances on a reporting entity's economic resources and claims in
the periods in which those effects occur, even if the resulting cash receipts
and payments occur in a different period.
The considerations in applying the qualitative characteristics and the cost
constraint are the same for different types of information.
2. Recognition is the process of:
Determining where an item should be presented in the financial statements.
Disclosing information in the notes to the financial statements.
Incorporating an item in the financial statements.
Determining the amount at which an item should be shown in the financial
statements.
3. It describes the objective of, and the concepts for, general purpose financial
reporting.
Conceptual Framework for Financial Reporting
Conceptual Framework for Financial Reports
Conceptual Framework for Financial Statements
Conceptual Framework for Financial Statement Preparation
4. Which is nota purpose of the Conceptual Framework?
Prescribe the basis for presentation of general purpose financial reports to
ensure comparability both with the entity's financial reports of previous periods
and with the financial reports of other entities.
• Assist the International Accounting Standards Board to develop IFRS
Standards that are based on consistent concepts.
Assist preparers to develop consistent accounting policy when no Standards
applies to a particular transaction or other event, or when Standard allows a
choice of accountingpolicy.
Assist all parties to understand and interpret the Standards.
5. Based on the latest Framework, what are the fundamental qualitative characteristics
of financial information?
Relevance and Faithful Representation
Relevance and Reliability
Reliability and Faithful Representation
Relevance, Reliability and Faithful representation
6 What are the elements of faithful representation?
Completeness, neutrality, and freedom from error
Completeness, neutrality, freedom from bias and freedom from error
Completeness, neutrality and freedom from bias
Neutrality, prudence and freedom from bias
7. Which of the following is an enhancing qualitative characteristic according to the
IASB Conceptual Framework?
Maturity
Faithful Representation
Relevance
Timeliness
8 The Conceptual Framework defines an asset as:
A resource controlled by the entity as a result of past events and from which
future economic benefits are expected to flow to the entity.
A present economic resource controlled by the entity as a result of past
events.
A right to receive income or reduce expenses in the future.
• None of the above.
Itrefers to the use of the same methods for the same items, either from period to
period or within a reporting entity or in asingle period across entities.
Consistency
Comparability
Uniformity
Rigidity
10. It is an entity-specific aspect of relevance based on the nature or magnitude, or both
of the items to which the information relates in the context of an individual entity's
financial report.
Materiality
Predictive value
Confirmatory value
Usefulness
11. It isthe present value of the cash flows, or other economic benefits, that an entity
expects to derive from the use of an asset and from its ultimate disposal.
Value in Use
Fulfillment Value
Current Cost
Current Value
12. Which of the following is an enhancing qualitative characteristic?
Comparability
Completeness
Consistency
Prudence
13. It means having information available to decision-makers in time to be capable of
influencing their decision.
Timeliness
Accuracy
Relevance
Faithful representation
14. Which of the following is not true?
 General purpose reports are intended to show the actual and true value of the
company in order for the decision-maker to make a sound and economic
decision.
The objective of general purpose reporting is to provide the information about
the reporting entity that is useful to primary users.
One of the primary users of the financial reports are those persons who might
have an interest in investing in the company.
If a requirement in an accounting standard differs from that required by the
conceptual framework, the former shall prevail.

15. Which of the following statements is false?

Inventory write-down is not reversed even when the circumstances that
previously caused inventories to be written down below cost no longer exist or
when there is clear evidence of an increase in net realizable
value because of changed economic circumstances.

When the inventories are sold, the carrying amount of those inventories shall
be recognised as an expense in the period in which the related revenue is
recognised.
The amount of any write-down of inventories to net realizable value and all
losses of inventories shall be recognized as an expense in the period the
write-down loss occurs.
The amount of any reversal of any write-down of inventories arising from an
increase in next realizable value shall be recognized as a reduction in the
amount of inventories recognized as an expense in the period in which the
reversal occurs.
16. Which of the following should form part of the cost of an inventory?

Storage costs necessary in the production process before a further

production stage.

Abnormal amounts of wasted materials, labour or other production costs.

Administrative overheads
Selling costs
17. An investment property is to subsequent measured using:
• Either the cost model or the fair value method
Either the cost model or the revaluation model
The cost model
Either the fair value model or the revaluation model
18. is correcting the recognition, measurement and disclosure of amounts
of elements financial statements as if a prior period error had never occurred.
of
Retrospective restatement
Retrospective application
 Prospective application
19. It is the estimated selling price in the ordinary course of the business less the
estimated costs of completion and the estimated costs necessary to make the sale.
Net realizable value
Fair value
Value in use
Replacement cost

20. Which of the following statements is false?

Cash advance and loans made by financial institutions are usually
classified as financing activities.

Cash payments to manufacture or acquire assets held for rental to others and
subsequently held for sale are cash flows from operating activities.
Cash repayments of amounts borrowed are financing cash flows.
Only expenditures that result in a recognised asset in the statement of financial
position are eligible for classification as investing activities
21. Which of the following will form part of the Other Comprehensive Income?
Change in the fair value of a liability designated as at fair value through
profit or loss that is due to changes in the liability's credit risk.

Change in the fair value of biological assets and agricultural produce

Change in the fair value of investment properties measured using the fair
value model.
Loss on inventory write-down due to a decline in the net realizable value.
22. Which of the following statements is false?
An entity shall prepare its financial statements using the accrual basis
of accounting.

An entity cannot rectify inappropriate accounting policies either by disclosure

of the acCounting policies used or by notes or explanatory material.
An entity shall present with equal prominence allof the financial statements in
a complete set of financial statements.
An entity shall not offset assets and liabilities or income and expenses unless
required or permitted by a PFRS.
23. Which of the following statements is true?
Land held for a currently undetermined future use is an investment
property.

Investment property is land, building or machinery held by the owner or by the

lessee as a right-of-use asset to earn rentals or for capital appreciation or
both.
 A building that is vacant but is held to be leased out under one or more
operating leases is an owner-occupied property.
An owner-managed hotel is an investment property.
24. Recoverable amount is the:
Higher between an asset's fair value less cost to sell and value in use.
Lower between an asset's fair value less costs to sell and value in use.
Higher between an asset's fair value less costs to sell and carrying amount.
• Lower between an assets' fair value less costs to sell and carrying amount.
25. These are the specific principles, bases, conventions, rules and practices applied by
an entity in preparingand presenting financial statements.
Accounting policies
Accounting estimates
Prior period errors
Reclassification adjustments
26. An entity that presents costs of sales, distribution costs, administrative expenses,
and other expenses in the statement of profit or loss is using the natural
presentation.
True
False
27. Which of the following statements is false?

A gain or loss arising from a change

the fair value of
in
investment property shall be recognized in the other
comprehensive income for the
period in
which it
arises.
as a non-current asset.
An investment property is classified
Transaction costs shall be included in the initial measurement of an
investment property.
Anowned investment property shallbe measured initially at its cost.
28. Which of the following cost assignment methods is not allowed by PAS 2?
Late in, First out
First in, First out
Specific identification of cost
Weighted average
29. Which of the following statements is false?
The income and related expenses of incidental operations of the development
of an intangible asset are usually recognized as part of
the cost of the intangible asset.

An intangible asset shall be measured initially at cost.

No intangible asset arising from the research phase of an internal project
shall be recognized.
Internally generated brands, mastheads, publishing lists and items similar in
substance shall not be recognized as intangible assets.
 30. These are amounts reclassified to profit or loss in the current period that were
recognized in other comprehensive income in the current or previous periods.
Reclassification adjustments
Revaluation change
Change in accounting policy
Prior period errors
31. Which of the following statements is false?
When an entity decides to dispose of an investment property without
development, it reclassifies the asset as inventory.

For a transfer from investment property carried at fair value to

Owner-occupied property or inventores, the property's deemed cost for
subsequent accounting shall be its fair value at the date of change in use.
If an owner-occupied property becomes an investment property that will be
carried at fair value, the entity shall treat any difference at that date between
the carrying amount of the property and its fair value in the same way as a
revaluation in accordance with PAS 16.
For a transfer from inventories to investment property that will be carried at
fair value, any differences between the fair value of the property at that date
and its previous carrying amounts shall be recognized in profit or loss.
32. Which of the following statements is false?
PAS 1 requires assets and liabilities to be presented based on liquidity.
An entity shall present a complete set of financial statements (including
comparative information) at least annually.
When an entity presents current and noncurrent assets, and current and
noncurrent liabilities, as separate lassifications in its statement of financial
position, it shal not classify deferred taxX assets (liabilities) as current assets
(liabilities).
An entity shall present additional line items (including by disaggregating the line
items listed in paragraph 82, headings and subtotals in the statement(s)
presenting profit or loss and other comprehensive exam when such
presentation is relevantto an understanding of the entity's financial
performance.
33. Which of the following statements is false?
Income earned through using a building site as a car park until construction
starts will be treated as a reduction to the cost of the to
be-constructed building.

An item of ppe, that qualifies for recognition as an asset shall be measured at

its cost.
The cost of an item of property, plant and equipment can include the initial
estimate of the costs of dismantling and removing the item and restoring the
site on which it is located.
If an item of ppe, is revalued, the entire class of ppe to which that asset
belongs shall be revalued.
 34. Under what models should ppe be subsequently measured?
Cost model
Cost model or fair value model
Cost model or revaluation model
Lower of cost and net realizable value
35. Which of the following is to be classified as a current asset?
Inventory
Investment Property
Investment in associate
Biologicalasset
36. Which the following is to be classified as a current asset?
of
Non-current assets held for sale
Deferred tax asset
PPE
Intangible assets
37. It is the systematic allocation of the depreciable amount of an asset over its useful
life.
Depreciation
Amortization
Impairment
Revaluation
38. Which of the following is to be classified as a current asset? • Financial assets at
fair value through profit or loss.
Financial assets at fair value through other comprehensive income.
Financial assets at amortized cost
39. Which of the following statements is false?
An entity shall begin capitalizing costs as part of the cost of a qualifying
asset on the completion time.

Capitalizable borrowing costs from a specific-type of borrowing shall be the

actual borrowing costs less any investment income on the temporary
investment of the specific-type of borrowings.
Borrowing costs incurred while land is under development are capitalized
during the period in which activities related to the development are being
undertaken.
Borrowing costs incurred while land acquired for building purposes is held
without any associated development activity do not qualify for capitalization.
40. Two items remained the ending inventory. Item A had an original cost of 100,000
while Item B had an original cost of 200,000. The combined cost of the two items
then is 300,000. Item A's net realizable value is 150,000 while Item B's net
realizable value is also 150,000. The combined net realizable value of the two items
is also 300,000. What amount should be presented in the statement of financial
position for the two items of inventory?
o 250,000
o 350,000
o 300,000
o 200,000
41. An entity shall not prepare financial statements on a going concern basis when:
 I. Management intents to liquidate
Management intends to cease trading
The entity reports a net loss in the previous period
Iand lI
I only
land ||
I,
Iland I|
42. An intangible asset is to be subsequently measured using: • Either the cost model
or the revaluation model
Either the cost model or the fair value model
The cost model
Either the fair value model or the revaluation model
43. Which of the following is to be applied prospectively?
Change of method of recognizing amortization from Straight-line
method is to Diminishing balance method

Change of valuation of inventories from First-in-First-Out to Weighted

Average
Change of measuring PPE from Cost model to revaluation model
44. Which of the following statements is false?
Entities are required to report cash flow from operating activities using
the direct method.

Equity investments are generally excluded from cash equivalent

Cash flows exclude movements between items that constitute cash or cash
equivalents
Cash flows arising from transactions in a foreign currency shal be recorded
in an entity's functional currency by applying to the foreign currency amount
the exchange rate between the functional currency and the foreign currency
at the date of the cash flow.
45, An entity shall classify a liability as non-current when:
the liability is due to be settled within twelve months after the reporting
period
the entity has an unconditional right to defer settlement of the liability
for at least twelve months after the reporting period.

it expects to settle the liability in its normal operating cycle

it holds the liability primarily for the purpose of trading

46. A depreciable asset was originally acquired for 5 million. Its carrying amount at the end
of the current year is 3 million. The asset's fair value less cost to sell is 2 million while
it's value in use is 4 million. Is the asset impaired?
o No, because the value in use is higher than the carrying amount.
 o Yes, because the fair value less cost to sell is lower than the carrying amount
o Yes, because the value in use is higher than the carrying amount.
o No, because the fair value less cost to sell is lower than the carrying amount.

47. How should inventories be subsequently measured?

Cost model
Cost model or fair value model
Cost model of revaluation model Lower of cost and net realizable value
48.
49. Which of the following statements is true?
An entity shallcease capitalizing borrowing costs when substantially allthe
activities necessary to prepare the qualifying asset for its intended
use or sale are complete.

An entity shall continue capitalization of borrowing costs during extended

periods in which it suspends active development of a qualifying asset.
An entity normally suspends capitalizing borrowing costs during a period
when it carries out substantial technical and administrative work.
An entity shall suspend capitalizing borrowing costs when a temporary delay
is a necessary part of getting an asset ready for its intended use or sale.
50. Which of the following will not form part of the cost of an inventory?
Refundable import duties
Purchase Price
Transport Costs
Handling costs
51. Close members of the family of a person includes that person's children and spouse
or domestic partner.
O True
O False
52. Which of the following statements is true?
An entity loses significant influence over an investee when it loses the power to
participate in the financial and operating policy decisions of
that investee.

O
Significant influence is the power to control or joint control of the financial and
operating policy decision of the investee
O
Ifan entity holds, directly or indirectly, 20% or more of the voting power of the
investee, it is presumed that the entity has no significant influence, unless it
can be clearly demonstrated that this is not the case.
 The equity method is a method of accounting whereby the investment is
O

initially recognized at fair value and adjusted thereafter for the postacquisition
change in the investor's share of the investee's net assets.
53. An entity shall derecognize a financial asset it has transferred if:
The entity transfers substantially all the risks and rewards of ownership
of the financial asset

O The entity retains substantially all the risks and rewards of ownership of the
financial asset
O The entity neither transfers nor retains substantially all the risks and rewards
of ownership of the financial asset but hsa retained control of the financial
asset.
54. Which of the following statements is false regarding the determination of fair value of
financial assets and liabilities for its initial measurement?
The fair value of a financial instrument at initial recognition is normally the
transaction price and as such, determination of the fair value is
never required so long as the transaction price is available.

O The fair value of a long-term loan or receivable that carries no interest can be
measured as the present value of all future cash receipts discounted using
the prevailing market rate(s) of interest for a similar instrument with a similar
credit rating.
If an entity originates a loan that bears an off-market interest rate and receives
O

an upfront fee as compensation, the entity recognizes the loan at its fair value
which is equivalent to the net of the fees it receives.
O The best evidence of the fair value of a financial instrument at initial
recognition is normally the transaction price
55. Land that is related to agricultural activity is measured
In accordance with PAS 16
O

O At fair value
O At fair value in combination with the biological asset that has been grown on
the land
At the resale value separate from the biological asset that has been grown on
O

the land
56. After initial recognition, an entity shall measure a financial liability at
Either amortized cost using the effective interest method or fair value
through profit or loss

O
Either amortized cost using the straight line interest method or fair value
through profit or loss
O
Fair value through profit or loss
O Amortized cost using the effective interest method
 57. At what amount will an entity record the non-current asset held for sale?
Lower of carrying amount and fair value less costs to sell
O

O Lower of cost or Net realizable value

Lower of carrying amount and Recoverable amount
O Lower of carrying amount and value in use
58. Which of the following statements if false?
A
sale of equipment from a parent to its subsidiary is an example of

upstream transaction

O On acquisition of the investment, any difference between the cost of the

investment and the entity's share of the net fair value of the investee's
identifiable assets and liabilities is accounted for as goodwill or income
An entity shalldiscontinue the use of the equity method from the date when its
investment ceases to be an associate or a joint venture.
O If the associate becomes a subsidiary PAS 28 no longer applies
59. Goodwill should be tested for impairment:
O Annually
O Every five years
O On the acquisition of a subsidiary
If there is an indication of impairment
60. Financial instruments sometimes contain features that separately meet the
definition of a derivative instrument. These features are classified as
O Embedded derivative instruments
O Swaptions
D Notional amounts
O Underlyings
61. When a component of a business has been discontinued during the year, the
component's operating loss for the current period should be included in?
Income statement as part of the loss on disposal of the discontinued
component

Income statement as part of revenue and expenses

O

O Income from continuing operations

O Retained earnings
62. A financial asset shall be measured at amortized cost if:
I. The financial asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows
The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding
Ol andII|
Olonly
 O Ilonly
O Either I or l

63. Which of the following is not one of the indications that the sale is highly probable?
O
The sale must be completed within one year from classification
O
The management must be committed toa plan to sell
O
The management must have an active program in locating a buyer
D
It must be for a price that is reasonable in relation to the fair market value of
the property.
64. Which of the following are not included in costs to sell?
Transport and other costs necessary to get the assets to a market
O
Commissions to brokers and dealers
O Transfer taxes and duties
O
Levies by regulatory agencies
65. A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the arrangement.
O
True
D False
66. Which of the following is not a category of financial assets?
O Financial assets held for sale
O Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
O Financial assets at amortized cost
67. Joint operations and joint ventures can coexist when the parties undertake different
activities that form part of the same framework agreement.
O
True
O False
68. The liabilities of a disposal group classified as held for sale shall be presented
separately from other liabilities in the statement of financial position.
D True
O False
69. Relationships between a parent and its subsidiaries shall be disclosed only if there
have been transactions between them.
O
True
O False
70. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require the unanimous consent
of the parties sharing control.
O True
O False
71. Which of the following statements is incorrect concerning the impairment of intangible
assets?
Intangible assets shall only be tested for impairment if there is an
indication of such impairment.
 9 Impairment test for intangible assets shall be performed anytime during the
annual period, as long as it is performed at the same time every year
Different intangible assets may be tested for impairment at different times.

72.
73. Which of the following impairment losses is not governed by PAS 36?
Inventories O

O
Property, plant and equipment
D Intangible assets
O Financial assets classified as subsidiaries

74. Any gain or loss on the remeasurement of a non-current asset (or disposal group)
classified as held for sale that does not meet the definition of a discontinued operation
shall be included in profit or loss from continuing operations.
O True
O False

75. A financial asset shall be measured at fair value through other comprehensive income
if
1.
The financial asset is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets
The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding
O land II
Olonly
lonly O
O Either I or ll
76. Which of the following are related parties?

The entity and the reporting entity are members of the same group
Two entities simply because they have a director or other member of key
management personnel in common
A customer, supplier, franchisor, distributor or general agent with whom an entity
transacts a significant volume of business
Two joint ventures that share joint control of a joint venture

77. Which of the following statements regarding the initial recognition of financial assets
and liabilities are false?
A forward contract that is within the scope of PFRS 9 is recognized as an
asset or a liability on date on which settlement takes place

Unconditional receivables and payables are recognized as assets or liabilities when

the entity becomes a party to the contract and, as a consequence, has
 a legal right to receive or a legal obligation to pay cash
Assets to be acquired and liabilities to be incurred as a result of a firm commitment
to purchase or sell goods or services are generally not recognized until at least one
of the parties has performed under the agreement
Option contracts that are within the scope of PERS 9 are recognized as assets or
liabilities when the holder or writer becomes a party to the contract

78. When testing a cash-generating unit for impairment, any corporate asset, such as the
head office business or computer equipment should
Be allocated with impairment on a reasonable and consistent basis

Be separately impaired
Be included in the parent's assets and tested for impairment along with that cash
generating unit
Not be allocated to cash-generating units

79. A related party transactions is a transfer of resources, services or obligations between

a reporting entity and a related party, regardless of whether a price is charged

True

False
80. Under PFRS, a cash flow hedge and a hedge of a net investment are accounted for
by

Recognizing gains and losses in other comprehensive income

Not recognizing gains or losses
Recognizing gains and losses in profit or loss
Recognizing gains and losses when the hedge is closed out

81. An entity shall measure initially a financial liability not designated at fair value through
profit loss at

Fair value minus directly attributable transaction costs

Fair value
Fair value plus directly attributable transaction costs
Face amount

82. It is the management by an entity of the biological transformation of living animal or

plants for sale into agricultural produce or into additional biological assets

Agricultural activity

Biological activity
Development activity
Harvest
83. Which of the following is not a derivative instrument?
 Variable annuity contracts

Futures contracts
Credit indexed contracts
Interest rate swaps

84. When shall an entity classify a non-current asset as held for sale in accordance with
PFRS 5?

When the carrying amount of the non-current asset will be recovered

principally through sale transaction rather than through continuing use.

When fair value less cost to sell is greater than the recoverable amount
When the entity purchased such non-current asset for the purpose of reselling it in
the ordinary course of business
When the carrying amount of the non-current asset will be recovered principally
through continuing use rather than selling the same

85. Which is a requirement for a component of an entity to be classified as a discontinued

operation?

The component must have beena cash generating unit while being held for

Use

The activities must cease permanently prior to the financial statements being
authorized for issue
The component must be a reportable segment
The assets must have been classified as held for sale in the previous financial
statements
86. Which of the following is not necessarily a related party?

A major supplier of an entity

The wife of a person who exercises control over the reporting entity
A child of a member of the key management personnel of the parent of the
reporting entity
One entity is a joint venture of the third party and the other entity is an associate of
the third party

87. Which of the following statements is false in relation to PFRS 5?

The entity shall provide, in detail, the total revenue, cost of sales, and other income
statement items of a discontinued operations in the statement of
comprehensive income
 The entity shall provide a single amount in the statement of comprehensive income
comprising the total post-tax profit or loss of the discontinued operations and the
post-tax gain or loss recognized on the disposal of the discontinued operations
The entity shall disclose, In detail, an analysis of the single amount into revenue,
expenses and other items in the notes to financial statements

88. Which of the following statements is not true?

Biological transformation is the detachment of produce from a biological asset

or cessation of a biological asset's life processes

Agricultural produce is measured at fair value less cost to sell at the point of harvest
When the fair value of the biological asset cannot be determined reliably, the
biological asset shall be measured at cost less accumulated depreciation and
accumulated impairment losses.
Bearer plants may be classified as a biological asset.
89. Which of the following statements is false?

An entity shall reclassify or re-present amounts presented for non-current assets or for
the assets and liabilities of disposal groups classified as held for sale in the
statements of financial position for prior periods to reflect the classification in the
statement of financial positions for the latest period
presented.

A subsidiary can be a disposal group

An entity shall present separately any cumulative income or expenses recognized
in other comprehensive income relating to a non-curent asset for disposal group
classified as held for sale.
The major classes of assets and liabilities classified as held for sale shall be
separately disclosed either the statement of financial position or in the notes,
a
except for newly acquired subsidiary.

90. A joint venture can either be a joint operation or a joint arrangement.

True

False

Additional:
 91. Which of the following statements is not true?
Revisions of the Conceptual Framework will automatically lead to changes to the
Standards
-
The Conceptual Framework is not a Standard

Nothing in the Conceptual Framework overrides any Standard or any requirement in a

Standard
To meet the objective of general purpose financial reporting, the Board may sometimes specify
requirements that depart from aspects of the Conceptual Framework

92.) It is the exercise of caution when making judgements under conditions of uncertainty.
Prudence

Conservatism

Neutrality

Faithful representation

93.)Which of the following is true?

Monetary assets are money held and assets to be received in fixed or determinable
amounts of money
PAS 38 shall apply to all intangible assets

Development is original and planned investigation undertaken with the prospects of gaining
new scientific or technical knowledge and understanding.
Intangible assets are unidentifiable non-monetary assets without physical substance.

94.) It is an asset that necessarily takes a substantial period of time to get ready for its intended
use or sale

Qualifying assets

Non-current assets
Intangible assets
Biological assets
95.)Which of the following statements is false?

The revision of an estimate relates to prior periods and is a correction of an

error

When it is difficult to distinguish a change in an accounting policy from a change in

an accounting estimate, the change is treated as a change in an accounting estimate
The correction of a prior period error is excluded from profit or loss for the period in
which the error is discovered
 PFRSS are accompanied by guidance to assist entities in applying their requirements
and a guidance that is an integral part of the PFRSs is mandatory
96.) An Asset is impaired when it's:

Carrying amount is higher that its recoverable amount

Carrying amount is lower that its recoverable amount

Value in use is higher than its fair value
Value in use is lower that its fair value

97.) Which of the following best describes financial performance?

Increase or decrease of equity other than contribution from or distribution to

investors.

It is reflected by changes in its economic resources and claims

It measures how the management performed during the period
It refers to changes of equity or capital account of the entity

98.) When an investor uses the equity method to account for investment in ordinary shares,
cash dividends received by the investor from the investee shall be recorded as
A deduction from the investment account

Dividend income
A deduction from the investor's share of the investee's profits
A deduction from the shareholder's equity account dividends to shareholder

99.) A hedge of the exposure to changes in the fair value ofa recognized asset or liability, or an
unrecognized firm commitment, is classified as a
Fair value hedge

Cash flow hedge

Foreign currency hedge
Underlying

100.) A joint operation is a joint arrangement whereby parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement
True

False