Intermediate Accounting

Which of the following accounts is reported in the Equity section statement of financial position?

- Share capital-ordinary.

At the current year-end, a trustee held cash in the sinking fund account representing annual deposits to the fund and the interest earned on these deposits. How should the sinking fund be reported?

- The entire balance in the sinking fund account should appear as noncurrent asset

Who is responsible, at all times, for the amount of the petty cash fund?

- The petty cash custodian

Which of the following statement is true regarding debits and credits?

- The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for liabilities.

Which of the following statements is not normally an objective of financial reporting?

- To provide information about an entity's liquidation value.

Cash equivalents would not include short-term investments in

- available-for-sale securities

Which of the following items should properly form part of the Cash account?

- checks returned by bank.

Examples of physical assets include the following except;

- equity instruments

Bank statements provide information about all of the following except;

- errors made by the company.

It is the structured representations of the financial position and financial performance of an entity Select one: a. Financial Statements b. Ledger c. Journal d. Cash flow

A

Users of financial reports include all of the following except: Select one: a. All of these are users b. unions. c. government agencies. d. creditors.

A

Which of the following statements in relation to income is true? - a. Gains are normally reported separately from revenue in the Statement of Profit or Loss and Other Comprehensive Income due to the different probabilities attached to that type of income. b. The Framework requires that all items of income are reported on a net basis. c. The Framework defines income as an increase in economic benefits which results in an increase in equity. d. Gains and revenue are different in nature and therefore are recognized as separate elements of the financial statements per The Framework.

A

Which of the following statements regarding cash equivalents is true? Select one: a. The date a security is purchased determines its "original maturity" for cash equivalent classification purposes. b. Management's policy for classifying items as cash equivalents cannot be changed. c. A one-year Treasury note could not qualify as a cash equivalent. d. All investments must be reported as cash equivalents.

A

Which of the following would not be classified as cash? Select one: a. Postdated checks b. Cashiers check c. Travelers checks d. Personal checks

A

The FRSC is the successor of the

Accounting Standards Council

If the cash balance shown in a company's accounting records is more than the correct cash balance and neither the company nor the bank has made any errors, there must be Select one: a. Deposits credited by the bank but not yet recorded by the company b. Outstanding checks c. Bank charges not yet recorded by the company d. Deposits in transit

B

The bank statement shall provide information about which of the following Select one: a. Deposits in transit b. Notes charged by the bank c. Errors made by the company d. Outstanding checks

B

All are non-financial assets except; Select one: a. Property, plant and equipment b. Intangible assets c. Cash d. Inventory

C

Debit always means Select one: a. right side of an account. b. decrease. c. none of these. d. increase.

C

The conceptual Framework deals with the following except: Select one: a. Qualitative characteristics of useful financial information b. Objective of financial reporting c. Concepts of liability maintenance d. Definition, recognition, and measurement of the elements from which financial statements are constructed

C

The trial balance will not balance when a company a. Fails to journalize a transaction. b. Omits posting a correct journal entry. c. Debits two statement of financial position accounts and no income statement accounts. d. Posts a journal entry twice.

C

Cash equivalents are short-term, highly liquid investments that are Select one: a. none of the choices b. so near their maturity that they present insignificant risk of changes in interest rates c. readily convertible to known amounts of cash d. readily convertible to cash and acquired within three months before date of maturity

D

It refers to the savings certificate that entitles the bearer to receive interest. Select one: a. Promissory note b. Savings account c. Certificate of interest d. Certificate of deposit

D

The following statements relate to cash. Which statement is false? a. Classification of a restricted cash balance as current or noncurrent should parallel the classification of the related obligation for which the cash was restricted. b. Cash equivalents are short-term and highly liquid investments that are readily convertible into cash and so near their maturity that they represent insignificant risk of changes in value because of changes in interest rates. c. Legally restricted bank deposit held as compensating balance should be segregated from the cash account and reported as current or noncurrent depending on the term of the related loan. d. A six-month money market placement with remaining maturity of two months on balance sheet date should be classified as cash equivalents.

D

The term "financial instruments" encompasses the following except; Select one: a. Financial Liability b. Financial asset c. Equity instrument d. Financial income

D

What is the quality of information that enables users to better forecast future operations Select one: a. Comparability b. Materiality c. Faithful representation d. Relevance

D

The system of analyzing effects of transactions and recording them in terms of debit and credit is known as

Double entry bookkeeping

The focus of government accounting is the custody and administration of;

Public funds

Is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

SEC

The underlying theme of the conceptual framework is Select one: a. Reliability b. Comparability c. Decision Usefulness d. Understandability

C. Decision Usefulness

On July 1, 2016, TRNFI Furniture established a P150 petty cash fund. A check for P150 was made out to the petty cash custodian. During July, the petty cash custodian paid the following bills from the petty cash fund: Office supplies P 36 Postage 22 Delivery charges 40 Bottled water 28 Total P126 At the end of July the petty cash fund was replenished. The journal entry to establish the petty cash fund includes:

- A debit to petty cash and a credit to cash for P150.

Which is not considered as a cash equivalent?

- A three-year treasury note maturing on May 30 of the current year purchased by the entity on January 15 of the current year

Of the following items, which would be included in cash on hand and classified as a current asset? A. Negotiable checks B. Certificates of deposit C. Bank drafts D. Coins and currency

- A, C & D

If a petty cash fund is established in the amount of P250, and contains P150 in cash and P95 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

- Cash, P100.

Which of the following should be considered cash?

- Certificates of deposit

The summary of significant accounting policies should disclose the

- Criteria for determining which investments are treated as cash equivalents

A proof of cash would be useful for_______.

- Discovering cash receipts that have been recorded but not been deposited

What happens when a petty cash is in use?

- Expenses paid with petty cash are recorded when the fund is replenished.

Valuation of the cash account in the balance sheet.

- Face value

Is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

- Financial Instrument

Financial information exhibits the characteristics of consistency when

- Financial information exhibits the characteristics of consistency when

A material credit balance in the 'cash in bank' account

- Is treated as a current liability

Formed by the FRSC in August 2006 to assist the FRSC in establishing and improving financial reporting standards in the Philippines.

- Philippine Interpretations Committee

Postage stamps and IOU's found in cash drawers should be reported

- supplies and receivables

Which of the following best describes a cash over or a short account?

-Is credited when the petty cash fund proves out over

Which of the following should be considered as cash in the balance sheet?

-Undelivered checks

The FRSC consists of members with a number of

15

All the following are differences between financial and managerial accounting in how accounting information is used except to Select one: a. All the choices b. plan and control company's operations. c. evaluate borrowing capacity to determine the extent of a loan to grant. d. decide whether to invest in the company.

A

Which is INCORRECT concerning the qualitative characteristics of financial statements? Select one: a. When information that are a result of related party transactions are shown in the financial statements these financial statements lose their reliability b. Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming or correcting their past evaluations c. To achieve the quality of understandability, users are assumed to have a reasonable knowledge of business and economic activities and accounting, and a willingness to study the information with reasonable diligence d. The need for comparability dictates that the seasonality nature of the activities of an entity be disclosed in interim financial statements

A

Is a group of accounts which are systematically categorized into asset, liability, equity, revenue and expense accounts. It is used to accumulate all the effects of the transactions during a period in specific accounts.

Ledger

Is the assigning of peso amounts to the accountable economic transactions and events

Measuring

Usually provide a specific dividend that is paid before any dividends are paid to ordinary shareholders

Preferred shares

Is composed of individual practitioners, small accounting firms and large multi-national organizations that render independent and expert financial services to the public

Public accounting

Summarizes the net effect of the transactions in each account in the general ledger for a particular period

Trial Balance

Is a bond with no periodic interest payments, issued at a substantial discount form face value

Zero coupon debt

All of the following are cash equivalents, except; Select one: a. money market instruments. b. investments in BSP treasury bills. c. investments in available for sale equity securities. d. commercial paper.

c