Which of the following generally provides the best evidence of fair value of an investment property?

Select one:

A.Discounted cash flow projections based on reliable estimates of future cash flows

B.Current prices in an active market for similar property in the same location and condition

C.Current prices for properties of a different nature or subject to different conditions

D.Recent prices on less active markets with adjustments to reflect the changes in economic
conditions

Which of the following should be classified as inventory? 

I. An entity trades in commercial property (ie it buys commercial property with a view to selling it at a
profit in the near term). 

II. An entity acquired a tract of land to divide it into smaller plots to be sold in the ordinary course of
business at an expected forty per cent profit margin. No rentals are expected to be generated from the
land. 

III. An entity trades in transferable taxi licenses. 

IV. A vintner processes grapes harvested from its vineyards into wine in a three-year production cycle. 

V. An entity holds lubricants that are consumed by the entity’s machinery in producing goods.

Select one:

A.I, II and IV only

B.I, II, III and V only

C.I, II, III, IV and V

D.I, II, III and IV only

Baritone Company counted and reported the ending inventory on December 31, 2018 at
P2,000,000. None of the following items were included when the total amount of the ending inventory
was computed:
What is the correct amount of inventory on December 31, 2018?

Select one:

A.2,350,000

B.2,900,000

C.2,750,000

D.2,500,000

On January 1, 2013, Farm Company planted trees on its land. The entity purchased the land two years
ago at a cost of P1,000,000.

The trees were considered bearer plants and had accumulated cost of P500,000 on December 31,2017.

By January 1, 2018, the trees had matured and were expected to bear produce for a period of 5 years.

On December 31 ,2018 the trees produced fruit and the fair value less cost of disposal on such date was
P50,000. There was no harvest during 2018.

On December 31, 2019, the fruits were harvested and the fair value less cost of disposal on such date
was P75,000.

What is the carrying amount of the biological asset on December 31, 2018?
Select one:

A.II, III and IV only

B.I, II, III and IV

C.I and II only

D.II and IV only

Which of the following are bearer plants?

Select one:

A.Plants cultivated to be harvested as agricultural produce.

B.None of the choices

C.Plants cultivated to produce agricultural produce when there is more than a remote likelihood
that the entity will also harvest and sell the plant as agricultural produce, other than as incidental scrap
sales

D.Annual crops

How should sales staff commission be dealt with when valuing inventories at the lower of cost and net
realizable value (NRV), according to PAS2 Inventories?

Select one:

A.Deducted in arriving at NRV

B.Deducted from cost

C.Added to cost

D.Ignored
Altis Company reported the following information for the current year:

The accounting policy is to report inventory in the financial statements at the lower of cost and net
realizable value.

Cost is determined under the first in, first out method.

At the year-end, the entity has determined that the replacement cost of inventory was 70 per unit and
the net realize value was 72 per unit. The normal profit margin is 10 per unit.

What amount should be reported as cost of goods sold for the current year?

Select one:

A.6,300,000

B.6,500,000

C.6,900,000

D.6,700,00

This organization is dedicated to ensuring that the global markets can operate in an efficient and
effective basis

Select one:

A.International Organization of Securities Commissions

B.International Accounting Standards Board

C.International Financial Reporting Standards Foundation

D.Financial Accounting Standards Board

When allocating costs to inventory produced for the period, fixed overhead should be based upon
Select one:

A.The actual amounts of goods produced during the period

B.The normal capacity of production facilities

C.The highest production levels in the last three periods

D.The lowest production level in the last three periods

Which of the following is not true about accounting for inventory under PAS 2?

Select one:

A.FIFO is allowed

B.Inventories are always valued at net realizable value

C.The weighted-average method is acceptable

D.Interest cost may be capitalized if there is a lengthy production period to prepare goods for sale

Which statement is incorrect regarding measurement of fair value of investment property on the basis
of a valuation by an independent valuer who holds a recognized and relevant professional qualification
and has recent experience in the location and category of the investment property being valued?

A.An entity need not disclose the fact the fair value of investment property is not determined on
that basis.
B.None of the choices
C.An entity is encouraged, but not required, to measure the fair value of investment property on
that basis.
D.An entity shall disclose the extent to which the fair value of investment property is determined on
that basis

In the case of property held under an operating lease and classified as investment propert

A.The entity needs only to disclose the fair value and can use the cost model under PAS 16
B.The entity has the choice between the cost model and the fair value model
C.The entity has to use the fair value model only
 D.The entity has to account for the investment property under the cost model only

The Shop Company sells TVs.  The perpetual inventory was stated as P305,000 on the books at
December 31, 2017.  At the close of the year, a new approach for compiling inventory was used and
apparently a satisfactory cut-off for preparation of financial statements was not made.  Some events
that occurred are as follows.
a)   TVs shipped to a customer January 2, 2018, costing P50,000 were included in inventory at December
31, 2017.  The sale was recorded in 2018.
b)  TVs costing P100,000 received December 30, 2017, were recorded as received on January 2, 2018.
c)   TVs received during 2017 costing P46,000 were recorded twice in the inventory account.
d)  TVs shipped to a customer December 28, 2017, f.o.b. shipping point, which cost P150,000, were not
received by the customer until January, 2018.  The TVs were included in the ending inventory.
e)  TVs on hand that cost P61,000 were never recorded on the books.
 
Compute the correct inventory at December 31, 2017

A.P320,000
B.P259,000
C.P220,000
D.P270,000

An entity controls an asset if

A.The asset arises from contractual or other legal rights, regardless of whether those rights are
transferable or separable from the entity or from other rights and obligations
B.The asset is capable of being separated or divided from the entity and sold, transferred, licensed,
rented or exchanged, either individually or together with a related contract, identifiable asset or liability,
regardless of whether the entity intends to do so
C.The asset will help in generating revenues or reducing future production costs
D.The entity has the power to obtain the future economic benefits flowing from the underlying
resource and to restrict the access of others to those benefits
Income earned through using a building site as a car park until construction starts is

A.Deducted from the cost of land

Under the revaluation model, how often shall revaluations be made?

A.Annually
B.It depends upon the entity’s accounting policy
C.It depends upon the changes in fair values of the items of property, plant and equipment being
revalued
D.Every three or five years