OSCARS Flashcards by Albert Diaz

International Financial Reporting Standards(IFRS) are issued by the

International Accounting Standards Board (IASB)

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Which of the following statements are correct about IASB and IASC?

The IASB was formed to replace the IASC

The accounting standards issued by the IASC were adopted by the IASB

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The committee that develops authoritative interpretations of existing IAS and IFRS and provides guidance on financial reporting issues not specifically addressed IAS and IFRS is the

International Financial Reporting Standards Interpretation committee (IFRS IC)

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The current accounting standard-setting body in the Philippines is the

Financial Reporting Standards Council (FRSC)

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Which of the following is correct about FRSC

The FRSC replaced the Accounting Standard Council (ASC)

The FRSC function is to establish generally accepted accounting principles in the Philippines

The FRSC was established to assist the Board of Accountancy in carrying out its power and function in promulgating standards in the Philippines

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Which of the following is correct about the PIC?

The PIC was established to develop authoritative interpretations of existing PAS and PFRS and provide guidance on financial reporting issued not to specifically addressed in PAS and PFRS

A PIC interpretation becomes part of PFRS once they are approved by the FRSC

IFRIC and SIC are the international counterpart of PIC

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The law regulating the practice of accountancy in the Philippines is the

R.A No. 9298; Philippine Accountancy Act of 2004

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The accredited professional organization of CPAs in the Philippines is the

Professional regulation Commission (PRC)

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The primary service offered by CPAs in the public practice is

Auditing Services

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This field of practice involved teaching of accounting, auditing, management advisory services, finance, business law etc.

Academe

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A certificate of accreditation shall be issued to CPAs in public practice only when the CPA has acquired a minimum of how many years of meaningful experience in any of the areas of Public practice

Three years

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A CPA must accumulate at least how many PCS units in order to be accredited to practice the Accountancy Profession

120 units

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A CPA shall be permanently exempted from CPD requirements on the renewal of the COA license upon reaching the age of

65 Years old

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On march 25, 2022. Dirk company ordered and paid the goods in advance of P10,000. The said orders will be delivered on the 5th day following the month. During the quarter ended March 31,2022 which of the following is true

Current asset section will reflect P10,000 advances to suppliers

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On November 1,2022 Doncic corporation loaned from the bank amounting to P60,000 evidenced by a note with 12% interest per annum, how much would be the interest expense for 2022?

60,000 x 12% x 2months(November and December) / 12months = P1,200

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On May 1, 2021. Dallas company received cash amounting to P50,000 from a customer to services that is yet to be rendered. The said transaction was recorded by crediting to service income. The services were rendered the following month, if until the end of the year, no adjusting entry made. Which is true?

Income is correctly stated

The method used in recording the cash received in advance was income method. Therefor when the services were already rendered there is no need to recognize an income account because it is already recorded and recognize.

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On October 1, 2021. Chandler company settled an amount of P24,000 for the renewal of its insurance policy for the two years. How much would be the prepaid insurance balance on December 21, 2021?

24,000 x 21months/ 24months = P21,000

Adjusting entry
Insurance expense 3,000
Prepaid insurance 3,000

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Arrange the following steps in the accounting process

Identifying and analyzing
Journalizing
Posting journal entries to ledger
Preparation of unadjusted trial balance
Preparation of adjusting entries
Preparation of worksheet
Preparation of financial statements
Preparation of closing entries
Post closing trial balance
Reversing entries

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Which of the following business transactions is/ are recordable
- an inquiry from a customer
- a purchase order sent to supplier
- A sales order sent to customer
- An approved purchase order from a customer

A sales order sent to customer
An approved purchase order from a customer

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Which of the following statements is false concerning the rules of debits and credits

The term “debit” means to increase and the term “credit” means to decrease

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The debit and credit analysis of a transaction normally takes place at what point in the accounting process?

Prior to recording the transaction in a journal

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Journalizing is the process of recording transactions from

Source document to journal

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Which of the following statement is correct about chart of accounts

A chart of accounts is a list of all account titles in the general ledger

All account titles used by an entity are found in the chart of accounts

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Journal entry that contains more than two accounts is called

Compound journal entry

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Which of the following is true about ledger

Book of final entry

Posting is the process of transferring information from

Journal to the general ledger

The following are examples of real accounts except: - retained earnings - prepaid expense - accrued salaries payable - insurance expense

Insurance expense

Which of the following is true regarding real and nominal accounts

Nominal accounts are called temporary accounts Real accounts are called permanent accounts

This refers to accounts that are added to the related account

Adjunct accounts

Which of the following is not a purpose of an unadjusted trial balance

It proves that debits and credits were properly entered in the ledger accounts

Adjusting entries intend to

Update accounts

Which of the following least resembles a usual adjusting entry

Debit an asset and credit liability

Which of the following properly describes an accrual

Expense is incurred before cash is paid Income is earned before cash is received

An income has been earned but not yet recorded because it is not received yet. The adjust entry involves

A receivable and an income

Which of the following properly describes a deferral

Cash is received before revenue is earned Cash is paid before expense is incurred

If an advance payment was initially recorded as an expense, then the adjusting entry will involve

Asset account and a credit to expense in the amount of the unexpired cost

If an advance collection was initially recorded as a liability, then the adjusting entry will involve

A credit to an income account and debit to a liability account in the amount of the earned portion

Megan company received an advance payment from a customer amounting to P50,000 on December 29, 2022 for goods that will be delivered on January 2, 2023. The entity credited a liability account in its book to record the said transaction. Which of the following id true if no adjustment is made at the end of 2022?

Balanced of accounts are correctly stated

The ending balance in the account “deferred revenues” should report which of the following

The fees received in advance which are yet to be earned

The adjustment for depreciation has the same effect as the adjustment for

A prepaid expense

In the preparation of the worksheet, if the total credits are greater than total debits under the “income statement” column

There is net income

In the preparation of the worksheet, if the total credits are greater than total debit under the “balance sheet” column

There is net loss

If the business operations of a corporate entity resulted to a profit, the income summary account will be closed by

Debiting income summary and crediting retained earnings

Which of the following statements is correct regarding the post-closing trial balance

All the foregoing statements are correct regarding the post-closing trial balance

Which of the following statements are true about reversing entries

Income under accrual basis can be reversed Prepaid expense recorded under expense method can be reversed

Adjusting entries that should be reversed include those for prepaid or unearned items that

Were originally entered in a revenue or expense account

which is not correct about the conceptual framework for financial reporting

The conceptual framework constitutes the highest level of authoritative status

Which of the following is a purpose of the conceptual framework for financial reporting

All of the forgoing

Which is correct about the conceptual framework for financial reporting

The applicability of the conceptual framework on a particular transaction or event shall be considered only when there is no accounting standard interpretation that specifically deals with that particular transaction or event

What is the underlying theme of the conceptual framework

Decision usefulness

The primary focus of financial reporting has been on meeting the needs of which of the following users

Existing investors Potential investors Lenders and creditors

Which of the following is not a limitation of financial reporting

Financial reports can only provide all the information needed by its primary users and not of other users

These are qualitative characteristics relate to the content or substance of financial information

Fundamental qualitative characteristics

A financial information is considered relevant when it

Is capable of making a difference in a decision

It is the quality of information that means the number and description match what really existed or happened

Faithful representation

For an information to be faithfully represented, it must be

Complete Neutral

This concept states that transactions and events must be accounting for in accordance with their economic substance and rather than merely their legal form

Substance over form

These qualitative characteristics are intended to increase the usefulness of financial information

Enhancing qualitative characteristics

Which of the following characteristics is demonstrated when different accountants independently agree on the amount and method of reporting a transaction or event

Verifiability

Information about different companies and about different periods of the same company can be prepared and presented in a similar manner. Comparability and consistency are related to which of these objectives

Companies Periods

Which of the following statement describes the term consistency in the context of useful financial information

Information is measured and reported in a similar manner across points in time

The conceptual framework mentions one constraint on useful financial reporting. Which is it

Cost

What is the objective of financial statement

To provide information about economic resources of an entity, claims against the entity and changes in the economic resources and claims

Financial statements provide information about the transactions and events viewer from the perspective of the

Reporting entity

Financial statements are prepared under the assumption that the reporting entity will continue in operation for the foreseeable future. Which of the following best describe this

Going concern assumption

A reporting entity

Can be a single entity Can be a portion of a single entity Can compromise more than one entity

If the reporting entity comprised of the parent company only, the financial statements are referred to ad

Unconsolidated financial statements

Which of the following are considered the elements of financial position

Asset Liability Equity

Which of the following are considered the elements of financial performance

Income Expense

It refers to the present economic resource controlled by the entity as a result of past event

Assets

Which of the following is not within the definition of an asset according to the conceptual framework

Future economic benefit is expected to flow to the entity

It refers to the present obligation of the entity to transfer an economic resources as a result of past event

Liability

Which of the following criteria need no to be satisfied for a liability to exist

The settlement is expected to result in an outflow of economic benefit

It refers to the residual interest in the assets of an entity after deducting all of the liabilities

Equity

These arises in the ordinary course of activity of the entity

Revenue

What is the primary distinction between revenue and gain

The nature of the activity that gives rise to the transaction

Gain is

An increase in asset from incidental transactions resulting in increase in equity A decrease in liability from incidental transactions resulting in increase in equity

An outflow of asset based on an activity that represents the major operations is called

Expense

It is defined as the process of capturing for inclusion in the financial statements an item that meets the definition of the elements of financial statements

Recognition

Recognition of an element of financial statement is appropriate when the information results in

Both relevance and faithful recognition

De recognitions normally occurs when

An item no longer meets the definition of an asset or a liability The entity loses control of the asset The entity no longer has a present obligation for the liability

The measurement bases include which of the following

Historical cost Current value

Which of the following does not affect the historical cost of an asset over time

Inflation

Fair value is the

Price that would be received to sell the asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date

Fulfillment value is the

Present value of the cash or other economic resources that an entity expects to be obliged to transfer ad it fulfills a liability

The current cost of a liability is equal to the

Amount that would be received for an equivalent liability at the measurement of date minus the transaction cost that would be incurred at that date

The IASB requires that use of which of the following measurement bases preparing financial statements

Non of the foregoing

It is the sorting of assets, liabilities, equity income and expenses on the basis of similar characteristics

Classification

The new term to describe the statement containing the profit or loss items together with the other comprehensive income item is

Statement if financial performance

This concept of capital is adopted by most entities in preparing their financial statements

Financial capital

Under this concept of capital maintenance a profit is earned only if the amount of net assets at the end of the period exceed the amount of net assets at the beginning of the period, after excluding any affects of transactions which the owners during the period

Financial capital maintenance

the financial capital maintenance concepts requires the adoption of which of the following measurement basis

No particular basis

OSCARS Flashcards

(92 cards)