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True or False-Conceptual Framework and Accounting Standards

The document contains 20 true/false statements related to accounting standards. It tests knowledge on topics like impairment loss, investment property, the equity method of accounting, borrowing costs, provisions, biological assets, intangible assets, government grants, and earnings per share. The statements cover recognition, measurement, presentation and disclosure requirements under different accounting standards.

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Saeym Segovia
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177 views

True or False-Conceptual Framework and Accounting Standards

The document contains 20 true/false statements related to accounting standards. It tests knowledge on topics like impairment loss, investment property, the equity method of accounting, borrowing costs, provisions, biological assets, intangible assets, government grants, and earnings per share. The statements cover recognition, measurement, presentation and disclosure requirements under different accounting standards.

Uploaded by

Saeym Segovia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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t/f

Impairment loss is the amount by which the recoverable amount exceeds the carrying
amount - f

If the entity uses the fair value model for investment property, the entity depreciates the
property - f

Entity holds between 30% of the voting power of an investee, the investor should use the
equity method unless circumstances indicate that it is unable to exercise significant influence
over the investee - t

If the fair value of plan assets is more than the projected benefit and therefore there is
overfunded, and therefore there is an accrued benefit cost which is a noncurrent liability - f

Any adjustments required to present an opening PFRS should be recognized in retained


earnings or if appropriate in another component of equity - t

Borrowing cost related to biological assets are capitalized - f

Qualifying insurance policy is an insurance policy is an insurance policy issued by an insurer


that is related party of the reporting entity - f

If the qualifying asset is financed by general borrowing cost, the capitalization borrowing cost
is equal to the average expenditure on the asset multiplied by a capitalization rate or actual
borrowing cost is incurred - t

Presentation of the information required under PAS 29 as a supplement to understated


financial statement is not permitted - t

Land that is related to agricultural activity is measured initially at cost - f

Earnings per share (eps) disclosures are required for all entities - f

Externally generated brand, masthead, publishing title, customer list and other item similar in
substance shall not be recognized as intangible asset - f

Value in use is the present value of cash that an entity expects to transfer in paying or
settling a liability - f

The period of time which interest must be capitalized ends when no further interest is being
incurred - f

In the period of deflation, a purchasing power loss is incurred on monetary assets and
purchasing power gain is realized on monetary liabilities - f

Conceptually, interim financial statements can be described as emphasizing reliability over


timeliness - f
Provisions shall be recognized for future operating losses - f

Bond convertible by the holder into a fixed number of ordinary shares of the issuer is an
equity instrument - f

The monetary and nonmonetary items are restated when preparing constant peso financial
statements - f

Biological assets shall be measured at cost less accumulated depreciation and impairment
when the fair value cannot be determined reliably - t

Deferred grant income is classified as partly current asset and partly noncurrent asset - f

Internally generated goodwill should be recognized as an intangible asset - f

A gain or loss on initial recognition of a biological asset at fair value less cost of disposal and
any subsequent changes in fair value less cost of disposable shall be included in profit and
loss - t

If there is a convertible preference share, the computation of diluted earnings per share is
converted into ordinary shares, thus, the net income is reduced by the amount of preference
dividend - f

Development cost may be capitalized as an intangible asset in very restrictive situations - t

Directly attributable expenditures related to investment property include start-up cost - f

Intangible assets with indefinite useful life are not amortized but are tested for impairment at
least annually - t

If the excess of cost over carrying amount of the investee’s net assets is attributable to
inventory, the amount is amortized until the such inventory is sold. - f

EPS shall be computed on the basis of average ordinary and preference shares outstanding
during the year. FALSE

Government grant related to non depreciable asset that require fulfillment of certain
conditions should not be recognized as income. FALSE

Which of the following increases the investment account under the equity method of
accounting? - none

An entity shall not recognize a contingent liability - unless it is probable that an outflow of
resources embodying economic benefits will be required to settle this liability

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