Preparers of FS used the Conceptual Framework to develop accounting policies in the absence of specific standard or interpretation.

The Philippine IASB has formulated its own accounting standards notwithstanding the issued IFRS.

An essential characteristic of a liability is that the entity has a present obligation which may be legal or constructive.

A shareholder is an internal user of financial information.

Financial information is capable of making a difference in decisions if it has predictive value but not confirmatory value.

The accounting standards published by the International Accounting Standards Committee have been designated as International Accounting Standards.

In case where there is conflict, the requirements of conceptual framework prevail those of the PFRS

Nothing in the Conceptual Framework overrides any specific Philippine Financial Reporting Standard.

The IASB employs a "due process" system which requires that all CPAs must receive a copy of IFRS.

To provide information about an entity's liquidation value is not an objective of financial; reporting

The accounting standards and pronouncements released by IASC have been nullified and replaced by the IAS.

Approve and appoint members of the IASB

Issues IFRS

Advise trustees and the board

Interpret and provide guidelines for IFRS

An essential characteristic of a liability is that the entity has a present obligation which may be legal or constructive.

The fundamental qualitative characteristics are reliability and faithful representation.

The concept of accounting entity is applicable only to business organizations.

The Conceptual Framework is used to set standards enhance consistency across standards, an provide a benchmark for judgments.

The conceptual framework is an IFRS.

Income encompasses both revenue and gain.

The future economic benefit embodied in an asset may flow to the entity in a number of ways.

The objectives of financial reporting are based on the reporting on management stewardship.

The following are specific objectives of the conceptual framework except,

Conceptual Framework is a body of concepts, terms and assumptions that set out the concepts that underlie the preparation and presentation of financial statements for external users

Which of the following is not the purpose of Conceptual Framework for Financial Reporting?

Economic decisions include the following except,

An entity that is required or chooses to prepare FS

An assumption that the accounting entity is viewed as continuing in operation indefinitely

The indefinite life of an enterprise is subdivided into time periods

A 12-month reporting period that ends on December 31.

Any 12 month year but applying the peak and slack season

Designed to provide information about the parent’s assets, liabilities, equity, income and expenses, and not about those of its subsidiaries

Provide information about the assets, liabilities, equity, income and expenses of both the parent and its subsidiaries as a single reporting entity

Which of the following is not an aspect of the definition of asset?

A present economic resource controlled by the entity as a result of past events

availability of cash in the near future to cover maturing obligations

availabilty of cash over long term to meet financial commitments when they fall due

Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims

The residual interest in the assets of the entity after deducting all its liabilities

A present obligation of the entity to transfer an economic resource as a result of past events

Decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims

Which of the following is not a criterion for a liability to exist?

All items that meet the definition of assets are recognized regardless of its relevance and usefulness..

Recognition is the process of capturing for inclusion in the statement of financial position or the statement(s) of financial performance an item that meets the definition of one of the elements of financial statements—an asset, a liability, equity, income or expenses

Only items that meet the definition of an asset, a liability or equity are recognised in the statement of financial position

is the sorting of assets, liabilities, equity, income or expenses on the basis of shared characteristics for presentation and disclosure purposes

occurs when an entity recognises and measures both an asset and liability as separate units of account, but groups them into a single net amount in the statement of financial position.

is the adding together of assets, liabilities, equity, income or expenses that have shared characteristics and are included in the same classification.

Classifying similar assets, liabilities, equity, income or expenses together can obscure relevant information, reduce understandability and comparability and may not provide a faithful representation of what it purports to represent.

Offsetting classifies dissimilar items together and therefore is generally not appropriate.

The selection of the appropriate concept of capital by an entity should be based on the needs of the users of its financial statements.

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

The Conceptual Framework is a set of principles-based international standards stating how particular types of transactions should be reported in the financial statements.

The term economic phenomena in the conceptual framework refers to the entity's economic resources, claims against the reporting entity and other events and conditions that change the resources and claims.

Income encompasses both revenue and gain.