8/14/22, 11:22 AM FAR-THRY Quiz 2

FAR-THRY Quiz 2
READ, LISTEN, AND FOLLOW INSTRUCTIONS.

You are required to log in through Google Meet and required to have your cameras open
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but are not in the Google Meet. NOT IN GOOGLE MEET means absent during the exam.

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through the Google Meet chat that you have submitted and turned in your submission. Wait
for the confirmation of your proctor before disconnecting/leaving the Google Meet link.

Comply with all requirements, policies and instructions.

The respondent's email (rc0447@eclass.psba.edu) was recorded on submission of this

form.

NAME: (LAST NAME, FIRST NAME M.I.) *

MARIN, CHRISANNE CLAIRE S.

STUDENT NUMBER: *

RC0447

SUBJECT PROFESSOR/INSTRUCTOR *

SIR VILLALUZ

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8/14/22, 11:22 AM FAR-THRY Quiz 2

You are required to log in through Google Meet and required to have your cameras *
open while taking the exam. Scores are considered INVALID for those who will
take the exam but are not in the Google Meet. NOT IN GOOGLE MEET means
absent during the exam. --- DO NOT FORGET to turn in your submission in the
Google Classroom. Inform your proctor through the Google Meet chat that you
have submitted and turned in your submission. Wait for the confirmation of your
proctor before disconnecting/leaving the Google Meet link. --- Comply with all
requirements, policies and instructions. --- INPUT YOUR FULL NAME AS
CONFIRMATION.

MARIN, CHRISANNE CLAIRE S.

FAR-THRY Quiz 2 - TEST PROPER

1. Which of the following is not considered cash for financial reporting purposes? *

Petty cash funds and change funds

Money orders, certified checks, and personal checks

Coin, currency, and available funds

Postdated checks and I.O.U.'s

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2. Which of the following statements are true about stated interest and effective *
interest rates?

I and III.

II and IV.

I, II, and IV.

II, III, and IV.

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3. Which of the following statements are correct? *

I and III.

I and IV.

II and III.

II and IV.

4. For an investment accounted for under the equity method, the investment *
income recognized in profit or loss for the year may be computed as:

Cash dividends received or receivable.

Share in the profit or loss of the associate minus amortization of undervaluation of

assets.

Share in the profit or loss of the associate minus amortization of overvaluation of

assets.

Share in the profit or loss of the associate plus amortization of undervaluation of

assets.

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5. During periods of rising prices, when the FIFO inventory cost flow method is *
used, a perpetual inventory system would

Not be permitted.

Result in a higher ending inventory than a periodic inventory system.

Result in the same ending inventory than a periodic inventory system.

Result in a lower ending inventory than a periodic inventory system.

6. According to IAS 2 Inventories, the best evidence of the NRV of raw materials is *

Estimated selling price less costs to sell

Estimated selling price less costs to complete and costs to sell

Replacement cost

Fair value less costs to sell

7. An item of PPE acquired in an exchange with commercial substance is *

measured at the

Fair value of asset given up.

Fair value of asset given up minus cash paid or plus cash received.

Fair value of asset given up plus cash paid or minus cash received.

Fair value of asset received plus cash paid or minus cash received.

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8. Costs of uninsured hazards or claims for uninsured accidents during *

construction

Are included as cost of PPE.

Are charged immediately as expense.

Are necessary overheads, thus, are included as cost of PPE.

Ignored for financial reporting purposes.

9. On January 1, 2022, Lang Co. placed an order for equipment. The supplier *
shipped the equipment on January 15, 2022 and was received by Lang on
February 1, 2022. Installation and testing were finished on March 1, 2022, and the
equipment is available for use on this date. However, Lang started using the
equipment only on May 1, 2022. According to IAS 16, when should Lang start
depreciating the equipment?

January 15, 2022

February 1, 2022

March 1, 2022

May 1, 2022

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10. If the asset’s carrying amount is increased as a result of a revaluation, the *

increase shall be

Credited directly to equity under the heading of revaluation surplus.

Recognized in profit or loss.

Credited directly to retained earnings.

Ignored.

11. Subsequent to revaluation, the depreciation on the revalued asset is *

computed on

Fair value on revaluation date.

Carrying amount before the revaluation.

Historical cost.

Any of these.

12. The period of time during which interest must be capitalized ends when: *

No further interest is being incurred.

The asset is abandoned, sold or fully depreciated.

The activities that are necessary to get the asset ready for the intended use have
begun.

The asset is substantially complete and ready for the intended use.

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13. Government  grant in  recognition  of specific  costs  is recognized as income *

Over the same period as the relevant expense.

Immediately.

Over a maximum of 5 years using straight line.

Over a maximum of 5 years using sum of digits.

14. Which of the following depreciation methods most closely approximates the *
method used to deplete the cost of natural resources?

Straight line method

Sum of the years digits method

Double declining balance

Units of production method

15. Equipment used in mining activities which has no alternative use is *

depreciated using

Straight-line method of depreciation

Straight-line method of depreciation only if the useful life of the equipment is shorter
than the mining period

Output method only if the mining period is shorter than the useful life of the
equipment

B and C

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16. When the carrying amount of an asset exceeds its recoverable amount, *

The asset is impaired.

The excess represents impairment loss.

There is a need to write-down the asset’s carrying amount to its recoverable amount.

All of the foregoing.

17. The gain on impairment loss reversal of an asset which is recognized in profit *
or loss is computed as

The difference between the recoverable amount on date of reversal and the carrying
amount on date of reversal.

The difference between the recoverable amount on date of reversal and carrying
amount of the asset had no impairment loss been recognized previously.

The difference between the carrying amount of the asset had no impairment loss
been recognized previously and the carrying amount of the asset on the date of
reversal.

The difference between the carrying amount of the asset had no impairment loss
been recognized previously and the recoverable amount on the date of the previous
impairment testing.

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18. Which of the following may be classified as investment property? *

I and IV only

II and III only

I, II and III only

I, II, III and IV

19. If an investment property carried at fair value is transferred to owner-occupied *

property, the difference between the carrying amount of the property and the fair
value shall

Be recognized in profit or loss.

Be recognized in other comprehensive income

Be accounted for as revaluation of property, plant and equipment in accordance with

IAS 16 Property, plant and equipment.

Not be recognized.

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20. When intangible assets are self-generated, costs incurred in research phase *
are

Capitalized.

Capitalized only to the extent of the limits provided under the standard.

Expensed immediately.

Expense or capitalize, as a matter of accounting policy choice and professional

judgement.

21. The method of amortization to be used shall reflect the pattern in which the *
future economic benefits from the asset are expected to be consumed by the
entity. If such pattern cannot be determined reliably, the method of amortization
to be used shall be the

Production method

Revenue method

Straight line method

Diminishing balance method

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22. Goodwill *

Generated internally, shall not be capitalized unless it is probable that there is an

inflow of future economic benefits.

Exists in any entity that has earnings higher than those of the competitors.

Is recognized only when resulting from the acquisition of an existing entity at a price
higher than the fair value of the identifiable net assets acquired.

Is recognized only when resulting from the acquisition of an existing entity at a price
lower than the fair value of the identifiable net assets acquired.

23. Which of the following are classified as biological assets? *

III and IV

II, III and IV

I, III and IV

I, II, III and IV

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24. A gain or loss arising on initial recognition of a biological asset and from a *
change in the fair value less cost to sell of a biological asset shall be

Recognized in profit or loss.

Recognized in other comprehensive income.

Recognized as revaluation surplus.

Deferred.

25. Noncurrent assets held for sale are measured at *

Carrying value.

Fair value less costs to sell.

Higher of A and B.

Lower of A and B.

26. Accounts payable are usually measured at *

invoice price.

present value.

future value.

amortized cost.

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27. If the present value of a note issued in exchange for a property is less than *
face amount, the difference should be

Included in the cost of the asset.

Included in interest expense in the year of issuance.

Amortized as interest expense over the term of the note.

Amortized as interest expense over the useful life of the asset.

28. Bonds payable shall be measured initially at *

Fair value.

Fair value plus bond issue cost.

Fair value minus bond issue cost.

Face amount.

29. If bonds are issued in between interest dates, the accrued interest: *

Should be included in the carrying amount of the bonds.

Should not be included in the carrying amount of the bonds but rather credited to
interest expense or payable.

Interest payable is debited.

Interest income is credited.

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30. The equity component of a compound financial instrument is determined: *

By allocating the issue price to the liability and equity components based on their
relative fair values.

By allocating the equity component its fair value.

By deducting the fair value of the liability component without the equity feature from
the net proceeds from the issuance of compound instrument.

None of these.

31. Any gains or losses from early extinguishment of debt should be *

Recognized in income of the period of extinguishment.

Treated as an increase or decrease in paid-in capital.

Allocated between paid-in capital and current income.

Amortized over the remaining original life of the extinguished debt.

32. There is gain on debt extinguishment under an equity swap when *

The carrying amount of the liability settled is more than the measurement of the
equity instruments issued in accordance with IFRIC 19.

The carrying amount of the liability settled is less than the measurement of the
equity instruments issued in accordance with IFRIC 19.

The fair value of the liability settled is more than the measurement of the equity
instruments issued in accordance with IFRIC 19.

The fair value of the liability settled is less than the measurement of the equity
instruments issued in accordance with IFRIC 19.

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33. For a debt restructuring involving modification of terms, which of the *

following specified by the new terms would be compared to the carrying amount
of the liability to determine whether the debt modification is substantial or not?

The total future cash payments.

The present value of the new liability discounted using the original effective interest
rate.

The present value of the new liability discounted using the prevailing market rate of
interest on the date of restructuring.

The amount of future cash payments.

34. Which of the following is the most accurate statement about provision? *

A provision may be the equivalent of the estimated liability or a loss that is accrued
because it is either probable or measurable.

A provision may be the equivalent of the estimated liability or a loss that is accrued
because it is both probable and measurable.

A provision is never an equivalent of the estimated liability or a loss that is accrued.

None of the above.

35. If the present obligation is probable and the amount can be measured reliably *

The obligation is a contingent liability.

The obligation is not a contingent liability but a provision.

The obligation must be settled immediately.

The obligation shall not be accounted for until actually settled.

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36. When the provision arises from a single obligation, the estimate of the *
amount

Is determined as the average of all outcomes

Is the individual most likely outcome adjusted for the effect of other possible
outcomes.

Reflects the weighting of all possible outcomes by their associated probabilities.

Is determined as the individual most likely outcome

37. A contingent liability: *

Is accrued even though not reasonably estimated.

Is the result of a loss contingency.

Is not recognized but only disclosed in the financial statements.

Exists as a liability but the amount and due date are indeterminable.

38. When the occurrence of a contingent asset is probable and the amount can *
be reasonably estimated, the contingent asset should be

Disclosed but not recognized in the statement of financial position.

Recognized and disclosed in the statement of financial position.

An appropriation of retained earnings is classified as such.

Neither recognized in the statement of financial position nor disclosed.

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39. If shares are issued for noncash consideration, the shares issued shall be *
measured by reference to which of the following?

Fair value of the noncash consideration.

Carrying amount of the noncash consideration.

Fair value of the shares.

Par value of the shares.

40. The excess of the subscription price over the ordinary share subscribed shall *
be recorded as share premium when the

subscription is recorded.

subscription is fully collected.

subscription is 75% collected.

ordinary share is issued.

41. Which of the following best describes the legal capital of a corporation that *
issues par value share capital?

Par value of shares issued and subscribed.

Par value of shares outstanding.

Market value of shares issued and subscribed.

Entire consideration received or receivable.

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42. The purchase of treasury ordinary shares *

Decreases authorized ordinary share capital.

Decreases issued ordinary shares.

Decreases outstanding ordinary shares.

Has no effect on ordinary shares outstanding.

43. When treasury shares are purchased for more than par value, what account or *
accounts shall be debited?

Share premium for the purchase price.

Treasury shares for the purchase price.

Treasury shares for the par value and share premium for the excess of purchase
price over the par value.

Treasury shares for the par value and retained earnings for excess of the purchase
price over the par value.

44. Loss from sale of treasury shares shall be charged to which of the following? *

Loss on sale of treasury shares.

Share premium from original issuance and then retained earnings.

Share premium from treasury shares and then retained earnings.

Retained earnings and then share premium from treasury shares.

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45. How would a share split affect the following? *

Share premium - Increase; Retained earnings - Increase; Shareholders’ equity -

Increase

Share premium - No effect; Retained earnings - Increase; Shareholders’ equity -

Increase

Share premium - Increase; Retained earnings - Decrease; Shareholders’ equity - No

effect

Share premium - No effect; Retained earnings - No effect; Shareholders’ equity - No

effect

46. Dividends are distributed based on the number of shares *

Authorized

Issued

Outstanding

Any of the foregoing.

47. If the share dividends declared is less than 20%, retained earnings shall *
generally be debited equal to the

fair value of the shares on the date of declaration.

fair value of the shares on the date of record.

fair value of the shares on the date of issuance.

par value of the shares.

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48. Appropriation of retained earnings is used to *

Restrict cash.

Provide for a contingent loss that is probable and measurable.

Smooth periodic income.

Restrict earnings available for dividends.

49. Immediately after quasi-reorganization, the retained earnings account *

remains the same.

frozen and dated.

has a debit balance.

has a zero balance.

50. The denominator in computing book value per share is the *

Number of shares issued.

Number of shares outstanding.

Number of shares authorized.

Weighted average number of shares outstanding.

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