First Preboards (Notes)

Question 1

(T/F) Current and noncurrent presentation of assets and liabilities provides useful information when the entity supplies goods or services within a clearly identifiable operating cycle

Answer 1

TRUE.

Question 2

(T/F) Regardless whether similar or dissimilar, all material items must be presented separately.

Answer 2

True.

Question 3

(T/F) Emphasis of financial accounting is on external reporting.

Answer 3

True

Question 4

(T/F) Income from continuing operations excludes income from discontinued operations.

Answer 4

True.

Question 5

(T/F) The income statement would help in estimating future financial flexibility.

Answer 5

False. The SFP helps here.

Question 6

(T/F) The income statement is prepared using accrual method if it is possible to estimate amount, timing, and uncertainty of future cash flows.

Answer 6

True.

Question 7

(T/F) Highly marketable equity investment cannot be considered cash equivalents.

Answer 7

True. No maturity date.

Question 8

(T/F) The amount of purchases/sales remain relatively unchanged from period to period - basic assumption of gross profit method.

Answer 8

False. What remains relatively unchanged should be gross profit rate, not absolute amount of purchases/sales

Question 9

“Measurement of purchase involving derivatives

Allowed treatment: Net UGL-OCI of DL against Purchases”

Answer 9

Okay!

Question 10

“Unrealized gain to be reported as component of OCI for 2018” - Current year only! Not cumulative balance.

Answer 10

Okay! To make it cumulative balance, “as of” siguro…

Question 11

(T/F) Debt investments are measured at either amortized cost, FVPL, and FVOCI.

Answer 11

True.

Question 12

(T/F) Debt investments under FV option, equity investments at FVPL and equity investments at FVOCI are exemptions from reclassification

Answer 12

True.

Question 13

(T/F) Opportunity cost is not recorded.

Answer 13

True.

Question 14

(T/F) Borrowing costs can be capitalized as cost of an asset when the asset is a qualifying asset and it is probable that the borrowing costs will result in future economic benefit and the costs can be measured reliably.

Answer 14

True.

Question 15

“Analyze the following terms related to the maritime term FAS:

(T/F) The seller must bear all expenses in delivering goods to the dock alongside the vessel. (Lahat ng goods sagot ng seller until the loading dock)

(T/F) The buyer bears all cost of loading and cost of shipment.

(T/F) Title passes to the buyer when the carrier takes possession of the goods.”

Answer 15

All true.