BUSCMB - 3RD FQ

Points:
28/30
11,
When several exchange rates are available, the rate used isRequired to
answer. Single choice.
(1/1 Point)
the selling rate
the buying rate
either selling rate or buying rate as a matter of accounting policy choice
that at which the future cash flows represented by the transaction or balance could
have been settled if those cash flows had occurred at the measurement date
22,
For a Philippine entity, which of the following quotations for exchange
rates is correct? Direct quotation Indirect quotationRequired to answer.
Single choice.
(1/1 Point)
₱1:$0.022 ₱45:$1
₱45:$65 ₱65:$45
₱40:$1 ₱1:$0.025
₱45:$1 ¥.002:₱40
33,
How much is the translated total equity?Required to answer. Single
choice.
(1/1 Point)
 ¥40M
¥36M
¥20M
¥18M
44,
What is the foreign exchange gain or loss on July 31, 2019 transaction
arising from the Pakistan wholesaler?Required to answer. Single choice.
(1/1 Point)

P4,000 gain
 P4,000 loss
P2,400 loss
P2,400 gain
55,
When an entity is operating under a hyperinflationary economy, its
financial statementsRequired to answer. Single choice.
(1/1 Point)
are first consolidated in accordance with PFRS 10, then restated in accordance with
PAS 29, and finally translated to the presentation currency in accordance with PAS 21
are first translated to the presentation currency in accordance with PAS 21 before
they are restated in accordance with PAS 29.
are first restated in accordance with PAS 29 before they are translated to the
presentation currency in accordance with PAS 21.
are first prepared using PAS 1, translated using PAS 21, consolidated using PFRS 10,
then restated using PAS 29.
66,
When translating the financial statements of a foreign operation, which
of the following translation procedures is inappropriateRequired to
answer. Single choice.
(1/1 Point)
Assets, liabilities, and equity, including any goodwill and FVAs, are translated at the
closing rate.
Income and expenses are translated at the spot exchange rates. For practical
reasons, income and expenses may be translated at the average rate.
All resulting exchange differences shall be recognized in profit or loss.
All resulting exchange differences shall be recognized in other comprehensive
income.
77,
Ashar, a Philippine Corporation, bought inventory items from a foreign
supplier in US on November 5, 2019 for US $100,000, when the spot
rate was P41.00. At Ashar’s December 31, 2019, year-end, the spot
rate was P40.50. On January 15, 2020, Ashar bought US $100,000 at
the spot rate of P40.90 and paid the invoice. How much should Ashar
report in its income statements for 2019 and 2020 as foreign exchange
transaction gain or (loss)? 2019 2020Required to answer. Single choice.
(1/1 Point)
P(50,000) P40,000
50,000 (40,000)
P – 0 - P10,000
 10,000 - 0 –
88,
On September 1, 2019, Rosan Corporation received an order for
equipment from a foreign customer for 300,000 local currency units
(LCU) when the Philippine peso equivalent was P96,000. Rosan shipped
the equipment on October 15, 2019, and billed the customer for
300,000 LCU when the Philippine peso equivalent was P100,000. Rosan
received the customer’s remittance in full on November 16, 2019, and
sold the 300,000 LCU for P105,000. In its income statement for the
year ended December 31, 2019, Rosa should report a foreign exchange
transaction gain ofRequired to answer. Single choice.
(1/1 Point)
P -0-
P4,000
P5,000
P9,000
99,
How much is the translated profit or loss?Required to answer. Single
choice.
(1/1 Point)

¥9M
¥7M
 ¥6M
¥12M
1010,
What is the foreign exchange gain or loss on July 30, 2019 transaction
arising from the Syrian wholesaler?Required to answer. Single choice.
(1/1 Point)

P1,600 loss
P1,600 gain
P2,000 gain
P2,000 loss
1111,
You are an auditor. ABC Philippines Co., your client, is not sure on what
to disclose in its financial statements as its functional currency.
Relevant information follows: ABC Philippines Co. is a branch of ABC
U.S. Co. ABC Philippines operates in a Philippine Economic Zone
Authority (PEZA) Special Economic Zone. ABC Philippines is engaged in
the apparel business. All of its raw materials are imported from the
main office in the U.S. and all of its finished products are exported
directly to U.S. customers. The U.S. customers remit payments to the
U.S. main office. The U.S. main office will then provide the Philippine
branch its working capital needs. None of ABC Philippines Co.s’ finished
products are sold in the Philippines. The raw materials imported and
finished goods exported are denominated in U.S. dollars. ABC
Philippines Co. is required to file audited financial statements with the
Philippine Securities and Exchange Commission (SEC) and the Bureau
of Internal Revenue (BIR). What is the presentation currency for the
financial statements to be filed with the said government agencies?
Required to answer. Single choice.
(1/1 Point)
Philippine peso
U.S. dollar
Philippine peso or US dollar
none of these
1212,
The accumulated translation differences from a foreign
operationRequired to answer. Single choice.
(1/1 Point)
Is reclassified within equity when the foreign operation is derecognized
Is reclassified to profit or loss when the foreign operation is derecognized
Remains within equity but cannot be reclassified from one equity account to another
equity account
None of these
1313,
What is the foreign exchange gain or loss on July 10, 2019 transaction
arising from the Pakistan wholesaler?Required to answer. Single choice.
(1/1 Point)

P1,000 loss
P1,000 gain
P400 gain
P400 loss
1414,
On December 1, 2019, you imported a machine from a foreign supplier
for $100,000, due for settlement on January 6, 2020. Your functional
currency is the Philippine peso. The relevant exchange rates are as
follows: Dec. 1, 2019 Dec. 31, 2019 Jan. 6, 2020 ₱50:$1 ₱52:$1 ₱47:$1
How much foreign exchange gain (loss) will you recognize on
December 31, 2019?Required to answer. Single choice.
(1/1 Point)
200,000
(200,000)
100,000
(100,000)
1515,
When translating the financial statements of a foreign operation, the
resulting exchange differences after translating all assets, liabilities,
equity, income and expenses consists of all of the following,
exceptRequired to answer. Single choice.
(1/1 Point)
Translation of opening net assets using opening and closing rates.
Translation of goodwill using opening and closing rates.
Translation of profit using average and closing rates.
Translation of ending net assets using opening and closing rates.
1616,
It is an entity that is a subsidiary, associate, joint venture or branch of
a reporting entity, the activities of which are based or conducted in a
country or currency other than those of the reporting entity.Required to
answer. Single choice.
(1/1 Point)
foreign operation
foreign transaction
foreigner
alien operation
1717,
What is the foreign exchange gain or loss on July 20, 2019 transaction
arising from the Syrian wholesaler?Required to answer. Single choice.
(1/1 Point)
 P500 gain
P500 loss
P2,500 gain
P2,500 loss
1818,
Bon-Bon Corporation had the following foreign currency transactions
during 2019: • Merchandise was purchased from a foreign supplier on
January 20, 2019 for the Philippine peso equivalent of P90,000. The
invoice was paid on March 20, 2019, at the Philippine peso equivalent
of P96,000. • On July 1, 2019, Bon-Bon borrowed from foreign
corporation with a Philippine peso equivalent of P500,000 evidenced by
a note that was payable in the lender’s local currency on July 1, 2020.
On December 31, 2019, the Philippine peso equivalents of the principal
amount and accrued interest were P520,000 and P26,000, respectively.
Interest on the note is 10% per annum. In Bon-Bon’s 2019 income
statement, what amount should be included as foreign exchange loss?
Required to answer. Single choice.
(1/1 Point)
P -0-
P6,000
P21,000
P27,000
1919,
When a foreign currency transaction occurred and settled in the same
period,Required to answer. Single choice.
(1/1 Point)
 all the exchange difference is recognized in that period.
all the exchange difference is recognized in the next period.
all the exchange difference is recognized in the previous period.
none of these
2020,
When a foreign currency transaction occurred in one period and settled
in another period,Required to answer. Single choice.
(0/1 Point)
the exchange differences between the transaction date and the date of settlement
is recognized in the period of settlement.
exchange differences between the transaction date and the end of reporting period
is recognized in the period of transaction.
exchange differences between the end of the previous reporting period and the date
of settlement is recognized in the period of settlement.
the exchange differences between the transaction date and the date of settlement
is recognized in the period of settlement and exchange differences between the end of
the previous reporting period and the date of settlement is recognized in the period of
settlement.
2121,
It refers to an obligation to deliver a fixed or determinable number of
units of currency.Required to answer. Single choice.
(0/1 Point)
monetary item
non-monetary item
financial instrument
monetary liability
2222,
These are those which do not give rise to a right to receive (or an
obligation to deliver) a fixed or determinable amount of
money.Required to answer. Single choice.
(1/1 Point)
Monetary items
Non-monetary items
Financial items
Non-financial items
2323,
The accumulated translation differences from a foreign
operationRequired to answer. Single choice.
(1/1 Point)
 is reclassified within equity when the foreign operation is derecognized.
is reclassified to profit or loss when the foreign operation is derecognized.
remains within equity but cannot be reclassified from one equity account to another
equity account
none of the these
2424,
What is the capitalized cost of inventory purchased from the Pakistan
wholesaler?Required to answer. Single choice.
(1/1 Point)

P -0-
P78,000
P82,000
P83,000
2525,
What is the reportable sales amount in the income statement in 2019?
Required to answer. Single choice.
(1/1 Point)
 P38,000
P45,000
P45,500
P47,500
2626,
You are an auditor. ABC Philippines Co., your client, is not sure on what
to disclose in its financial statements as its functional currency.
Relevant information follows: ABC Philippines Co. is a branch of ABC
U.S. Co. ABC Philippines operates in a Philippine Economic Zone
Authority (PEZA) Special Economic Zone. ABC Philippines is engaged in
the apparel business. All of its raw materials are imported from the
main office in the U.S. and all of its finished products are exported
directly to U.S. customers. The U.S. customers remit payments to the
U.S. main office. The U.S. main office will then provide the Philippine
branch its working capital needs. None of ABC Philippines Co.s’ finished
products are sold in the Philippines. The raw materials imported and
finished goods exported are denominated in U.S. dollars. What is ABC
Philippines Co.’s functional currency?Required to answer. Single choice.
(1/1 Point)
Philippine peso
U.S. dollar
Philippine peso or US dollar
none of these
2727,
On December 1, 2019, you imported a machine from a foreign supplier
for $100,000, due for settlement on January 6, 2020. Your functional
currency is the Philippine peso. When preparing the December 31,
2019 statement of financial position, which of the following will you
translate to the closing rate?Required to answer. Single choice.
(1/1 Point)
machine
accounts payable
machine and accounts payable
none of these
2828,
Once determined, the functional currencyRequired to answer. Single
choice.
(1/1 Point)
Is changed every year depending on the functional currency the entity wishes to use
Is permanent and can never be changed unless the entity undergoes reorganization
Is not changed unless there is a change in those underlying transactions, events and
conditions
Is changed only when the entity chooses to the change its accounting policy. After
the change in accounting policy, previous financial statements are restated so that the
current year and comparative financial statements are presented using the uniform
currency
2929,
How much is the translated total assets?Required to answer. Single
choice.
(1/1 Point)
 ¥40M
¥36M
¥20M
¥18M
3030,
On July 1, 2019, VIR Company lent P120,000 to a foreign supplier,
evidenced by an interest-bearing note due on July 1, 2020. The note is
denominated in the currency of the borrower and was equivalent to
840,000 local currency units (LCU) on the loan date. The note principal
was repaid to VIR on the July 1, 2020 due date when the exchange rate
was 8 LCU to P1. In its income statement for the year ended,
December 31, 2020, what amount should VIR include as a foreign
currency transaction gain or loss?Required to answer. Single choice.
(1/1 Point)
P -0-
P15,000 loss
P15,000 gain
P35,000 loss

1. D
2. C
3. C
4. D
5. C
6. C
7. B
8. C
9. A
10. A
11. A
12. B
13. D
14. B
15. D
16. A
17. B
18. D
19. A
20. D
21. D
22. B
23. B
24. C
25. D
26. B
27. B
28. C
29. A
30. D