FARAP Day 1 Quiz 3

The qualifications of the members of the Board of Accountancy include all of the following, except

• Must be a natural-born citizen and a resident of the Philippines.

• Must be duly registered CPA with at least ten years of work experience in any scope of practice of accountancy.

• Must be of good moral character and must not have been convicted of crime involving moral turpitude. 

• Must have any pecuniary interest, directly or indirectly, in any school conferring an academic degree necessary for admission to the practice of accountancy.

What is the underlying assumption mentioned in the Conceptual Framework for Financial Reporting?

• Going concern 

• Accounting entity 

• Time period

• Monetary unit

Which of the following is not an accepted basis for recognition of revenue?

• 1. Passage of time

• 1. Performance of service

• 1. Completion of percentage of a project

• 1. Upon signing of contract

What is the underlying concept governing the generally accepted accounting principles pertaining to recording gain contingencies?

• Conservatism

• Relevance

• Consistency

• Reliability

Which of the following is included in a complete set of financial statements?

• A statement by the board of directors of compliance with local legislation.

• A statement of changes in equity.

• Statement of financial position for the last five years.

• Value added statements.

An industry segment is considered reportable when any of the following conditions is met, except

• Segment revenue is 10% or more of the combined revenue of all segments.

• Segment assets are 10% or more of the combined asset of all segments.

• Segment liabilities are 10% or more of the combined liabilities of all segments.

• Absolute amount of a segment profit or loss is 10% or more of the combine profit of all segments that did not incur a loss.

In the Conceptual Framework for Financial Reporting, what provides the “why” of accounting?

• Measurement and recognition concept

• Qualitative characteristic of accounting information

• Element of financial statement

• Objective of financial reporting

Posting is the process of transferring information from 

• Journal to the general ledger

• General ledger to the journal 

• Source document to the journal 

• Journal to the source document

Which of the following is characteristic of a change in accounting estimate?

• 1. It usually need not be disclosed.

• 1. It does not affect the financial statements of prior period. 

• 1. It should be reported through the restatement of the financial statements.

• 1. It makes necessary the reporting of proforma amounts for prior periods.

Entities should disclose all of the following in interim financial report, except

• Basic and diluted earnings per share

• Change in accounting policy 

• Events after the end of reporting period 

• Seasonal revenue, cost or expenses