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Cfas Reviewer 1

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6 views

Cfas Reviewer 1

Uploaded by

Forsale Account
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CFAS reviewer 1

1. What is the quality of information that enables users to better forecast future
operations?

a. Reliability
b. Materiality
c. Comparability
d. Relevance

2. The fundamental qualitative characteristics are

a. Relevance and reliability


b. Timeliness and verifiability
c. Relevance and Faithful representation
d. Understanding and Comparability

3. Other Comprehensive Income includes all of the following except:

a. Unrealized gain on available for sale financial asset


b. Actuarial gain on defines benefit plan that is fully recognized
c. Loss from translating the financial statements of a foreign operation
d. Share premium

4. Which of the following helps users make good decisions?

a. A faithful representation of an irrelevant phenomenon


b. An unfaithful representation of a relevant phenomenon
c. Both A & B
d. Neither A nor B

5. The objective of financial statements is to provide financial information about the


reporting entity's A, L, E, Income and Expense that is useful to users of financial
statements in assessing:

a. The prospects for future net cash inflows to the reporting entity
b. Management’s stewardship of the entity’s economic resources
c. Both A & B
d. Neither A nor B
6. Which concept of capital should be adopted by an entity if the users of financial
statements are primarily concerned with the maintenance of nominal invested
capital or the purchasing power of invested capital?

a. Financial Concept
b. Physical Concept
c. Either A or B
d. Neither A nor B

7. Which statement is incorrect regarding the Conceptual Framework for Financial


Reporting?

a. Describes the objective of, and the concepts for, general purpose financial reporting
b. Is not a PFRS and hence does not define standards for any particular measurement
or disclosure nature
c. Serves as a guide in developing future PFRSs and as a guide to resolving accounting
issues that are not addressed directly in existing PFRSs
d. Prevails in cases where there is conflict with a PFRS

8. Information about income and expenses is

a. Less important as information about assets and liabilities


b. More important as information about assets and liabilities
c. Just as important as information about assets and liabilities
d. Not important

9. The underlying theme of Conceptual Framework is:

a. Decision usefulness
b. Understandability
c. Reliability
d. Comparability

10. What is an entity-specific aspect of relevance?

a. Predictive Value
b. Timeliness
c. Confirmatory Value
d. Materiality

11. Which statement is false concerning users and their information needs?

a. Lenders are interested in information that enables them to determine whether their
loans and the interest on these loans will be paid when due
b. The providers of risk capital and their advisers are concerned with the risk inherent
in, and return provided by their investment
c. Government and its agencies have an interest in information about the
continuance of an enterprise especially when they have long-term
involvement or are dependent on the enterprise
d. Employees and their representative groups are interested in information about the
stability and profitability of the entity

12. A characteristic of the notes to the financial statements is that:

a. They are separate from the financial statements.


b. They are not important.
c. They describe accounting policies.

13. Changing the method of inventory valuation should be reported in the financial
statements under what qualitative characteristic of accounting information?

a. Understandability
b. Timeliness
c. Verifiability
d. Comparability

14. How is Conceptual Framework useful to Auditors?

a. By assisting in forming an opinion as to whether financial statements conform


to PFRSs
b. By assisting in promoting harmonization of regulations, accounting standards and
procedures relating to the presentation of financial statements by providing a basis
for reducing the number of alternative accounting treatments permitted by PFRSs
c. By assisting in applying the accounting standards
d. By assisting in interpreting the information contained in financial statements
prepared in conformity with PFRSs

15. Which is not s specific purpose of the Conceptual Framework?

a. To assist FRSC in the development of future Philippine Financial Reporting Standard


(PFRSs) and in its review of existing PFRSs
b. To assist users of financial statements in interpreting information contained in
financial statements
c. Provide those who are interested in the work of FRSC with information about
its approach to the formulation of PFRSs
d. To assist the BOA in promulgating rules and regulations affecting the practice of
accountancy in the Philippines
16. The new Conceptual Framework defines Recognition as

a. process of capturing for inclusion in the statement of financial position or the


statement(s) of financial performance an item that meets the definition of an
asset, liability, equity, income or expenses
b. process of incorporating in the balance sheet or income statement an item that
meeting the definition of an element and satisfies the criteria for recognition
c. removal of a previously recognized asset or liability from an entity’s SFP
d. process of determining the monetary amounts at which elements of the financial
statements are to be recognized and carried in the balance sheet and income
statement

17. Which statement is incorrect regarding assets in accordance with the Conceptual
Framework?

a. Assets are resources controlled by the entity as a result of past events and from
which future economic benefits are expected to flow to the entity
b. Assets are recognized in the statement of financial position if it is probable that the
future economic benefits will flow to the entity and the item has a cost or value that
can be measured reliably
c. Assets are required to be measured at fair value
d. Assets are presented in the SFP either as noncurrent or current

18. Which of the following is (Are) essential to the existence of an asset?

a. Legal right
b. Physical form
c. Both A & B
d. Neither A nor B

19. Financial statements achieve fair presentation when:

a. The PFRS issued by FRSC are appropriately applied, with additional


disclosures when necessary
b. Inappropriate accounting treatments are corrected or rectified through disclosures
c. They comply with majority of the requirements of each applicable PFRS and each
applicable interpretation
d. All of the above

20. The decisions of primary users involve

a. Buying equity and debt instruments


b. Providing or settling loans and other forms of credit
c. Selling or holding equity and debt instruments
d. All of the above

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