1.

The newly formed is not allowed to use any books of the sole proprietorship in forming such
partnership = T

2. Financial information is capable of making a difference in decisions should have both predictive and
confirmatory value = F

3. The Conceptual Framework is not an IFRS and hence does not define standards for any particular
measurement or disclosure issue = T

4. The absence of a related expenditure precludes an item from meeting the definition of an asset = F

5. An entity controls an economic resource if it has the present ability to direct the use of the economic
resource and obtain the economic benefits that may flow from it = T

6. An economic resource is a right that has the potential to produce economic benefits = T

7. A liability is a future obligation of the entity to transfer an economic resource as a result of past
events = F

8. One of the purpose of the Conceptual Framework is to assist the preparers of financial statements in
interpreting the information contained in financial statements prepared in complpiance with IFRS = T

9. Not all of an entity's rights are assets of that entity = T

10. An obligation can meet the definition of a liability even if the probability of a transfer of an economic
resource is low = T

11. An obligation is a duty or responsibility that an entity has a practical ability to avoid = F

12. In case of conflict between the substance and form of a transaction or economic phenomenon, the
entity shall follow the form of the transaction in order to achieve faithful representation = F

13. true ??

14. Obligations that arise from an entity's customary practices, if the entity has no practical ability to act
in a manner inconsistent with those practices is referred to as a constructive obligation = T

15. true ??

16. Which statement best describes the term going concern? = the ability of the entity to continue in
operation for the forseeable future

17. Forward looking information can be included in the financial statements = T

18. Which underlying assumption assumption serves as the basis for preparing financial statements at
regular arbitrary or artifical points in time? = time period

19. Which basic accounting assumption is threatened by the existence of severe inflation in an
economy? = periodicity assumption

20. General purpose financial statements is a broader term than general purpose financial reports = F
21. Which of the following statements is incorrect? = consolidated financial statements are designed to
provide separate information about the assets, liabilities, equity, income and expenses of any particular
subsidiary

22. Financial statements provide information about transactions and other events viewed from the
perspective of the entity's existing or potential investors, lenders or other creditors = F

23. The elements directly related to the measurement of financial performance are = income and
expenses

24. The elements directly related to the measurement of financial position are = assets, liabilities and
equity

25. Which of the following statements is incorrect? = an entity that has control over another entity is
referred to as a parent

26. The financial statements of the business entity are separate and distinct from the financial
statements of the owners = economic entity assumption

27. What is the only underlying assumption mentioned in the Conceptual Framework? = going concern

28. Offsetting can be allowed when it reflects the substance of the transaction or other event = T

29. Reclassification adjustments do not arise from revaluation surplus = T

30. An entity shall not present any items of income or expense as extraordinary items anywhere in the
financial statements = T

31. It is the functional presentation that is used when expenses are classified as cost of sales,
distribution cost, administrative cost and other expense = T

32. An item that is not sufficiently material to warrant a separate presentation in the financial
statements may warrant separate presentation in the notes = T

33. PFRSs apply only to financial statements and not necessarily to other information presented in an
annual report, a regulatory filling, or another document = T

34. least prominence true ??

35. It is the natural presentation that is used when expenses are presented as depreciation, purchases of
materials, transport costs, employee benefits and advertising costs = T

36. An entity shall disclose comparative information in respect of the previous period for all amounts
reported in the current period's financial statements = T

37. As a general rule, offsetting an asset with a liability, and income with an expense is not allowed by
PAS 1 = T

38. When an entity decides to prepare interim financial statements, it must comply with the structure
and content requirements of PAS 1 = T
39. When the entity's normal operating cycle is not clearly identifiable, it is assumed to be twelve
months = T

40. An entity shall prepare all its financial statements using the accrual basis of accounting = T

41. Since PAS 1 is designed for profit-oriented entities, it cannot be applied to non-profit-oriented
organizations or entities = F

42. An entity shall at all times not offset assets and liabilities or income and expenses = T

43. PAS 1 prohibits the practice of preparing financial statements for periods other than a one-year
period = F

44. Employment of inappropriate accounting policies can be rectified by sufficient disclosure and
explanation of such policies = T

45. An entity is precluded from presenting additional line items, headings and subtotals in the statement
of comprehensive income and the separate income statement (if presented) = F

46. Entities are precluded from using terminologies that are different from the terminologies used in
PAS 1 = F

47. An entity shall not be considered as a going concern if the SEC suspends the trading of the entity's
stocks = F

48. PAS 1 does not requite the presentation of all assets and liabilities in the order of liquidity = F

49. An entity classifying expenses by function shall disclose additional information on the nature of
expenses = T

50. PAS 1 provides for an elaborate definition of non-current assets and liabilities = T

51. Retrospective adjustments and retrospective restatements are changes in equity = F

52. When an entity presents current and non-current assets, and current and non-current liabilities, as
separate classifications in its statement of financial position, it shall classify deferred tax assets
(liabilities) as non-current assets (liabilities) = F

53. It is the presentation and classification of financial statement items on a uniform basis from one
accounting period to the next = Consistency of Presentation

54. As generally used, the term net assets represent = Total Assets less Total Liabilities

55. The following are Other Comprehensive Income that will be reclassified subsequently to profit or
loss, except = Unrealized gain or loss on debt investment measured at fair-value through other
comprehensive income

56. Which of the following is not a component of other comprehensive income? = impairment losses

57. Which statement is true concerning the financial statements? - All of these statements are true
concerning financial statements
58. A complete set of financial statements includes the following components, except: = Reports and
statements such as environmental reports and value added statements

59. Which of the following statements is not true? = PAS 1 applies to entities that present consolidaated
financial statements in accordance with PFRS 10. Consolidated Financial Statements

60. International Financial Reporting Standards (IFRS), as referred to in the Standards, petain to: 1. IFRS
1 to IFRS 17 2. IAS 1 to IAS 41 3. IFRIC and SIC Interpretations = 1 and 3 only

61. All of the items below, except one, give rise to reclassification adjustment. Which is the exception? =
Changes in revaluation surplus

62. Which of the following statements is false? = When an entity has a history of profitable operations
and ready access to financial resources, the entity may reach a conclusion that the going concern basis
of accounting is appropriate without detailed analysis

63. What is the purpopse of reporting comprehensive income? = To report a measure of overall
enterprise performance

64. Which of the following statements is true? = An entity must provide all specific disclosures required
by an PFRS

65. Which of the statements is false? = The Statements of Retained Earnings is a required basic
statement in financial reporting

66. Which of the following statements is false? = Offseting is generally disallowed since it detracts from
the ability of users both to understand the transactions, other events and conditions that have occured
and to assess the entity's future cash flows

67. Which of the following is classified as current liabilities? = A currently maturing long-term debt

68. Which of the following should be classified as noncurrent? = liabilities, such as trade payables, and
some accruals for employee and other operating costs, that ar epart of the working capital used in the
entity's normal operating cycle that are due to be settled more than twelve months after the reporting
period

69. ??

70. Which of the following statements is false? = An entity shall present, either in the statement of
changes in equity or in the notes, the amount of dividends recognized as distributions to owners during
the period, and the related amount per share

71. Financial statements musst be prepare at least = Annually

72. The following are components of expenses, except = Prepaid Expenses

73. An entity shall classify a liability as non-current when = the entity has an unconditional right to defer
settlement of the liability for at least twelve months after the reporting period

74. Which of the following statements is required to be disclosed in the financial statements? 1. An
entity whose financial statements comply with PFRSs shall make an explicit and unreserved statement of
such compliance in the notes. 2. Uncertainties on the entity's ability to continue as a going concern
when management is aware, in making its assessment, of material uncertainties related to events or
conditions that may cast significant doubt upon the entity's ability to continue as a going concer. 3. An
entity's ability to continue as a going concern. = 1 and 3 only

75. Which of the following offsetting is not allowed? = Presenting on net basis gains and losses arising on
financial instruments held for trading

76. How many of the following statements is/are true? 1. An entity may use titles for the statements
other than those used in PAS 1 2. An entity shall present the components of profit or loss in a separate
statement of comprehensive income. 3. Reports and statements presented outside the financial
statements, such as environmental reports and value added statements are outside the scope of IFRSs. =
2

77. Which entity is a going concern? = None of these can be considered a going concern entity

78. ??

79. An entity shall classify an asset as non-current when: = it expects to realize the asset beyond twelve
months are the reporting period

80. How should cash that is restricted for settlement of a liability that is due 18 months from the
reporting period be presented? = noncurrent assets