When resolving accounting problems not specifically addressed by current standards, an entity should be guided by the hierarchy of reporting standards. The correct sequence of the hierarchy of reporting standards in the Philippines is I. PASs, PFRSs, and Interpretations II. Conceptual Framework III. Judgement

Imputing interest for certain assets and liabilities is primarily based on the concept of

The operating expenses section of a statement of comprehensive income does not include

There is no operating leverage if there is no

Which is or are the means by which the issue price of no par value common value shares is determined?

On an entity’s December 31, 20x1 statement of financial position, which of the following items should be included in the amount reported as cash? I. A check payable to the enterprise, dated January 2, 20x2, in payment of a sale made in December 20x1 II. A check drawn on the enterprise’s account, payable to a vendor, dated and recorded in the company’s books on December 31, 20x1 but not mailed until January 10, 2002.

An entity has a quick ratio of 1:25:1. Which of the following transactions will most likely deteriorate the entity’s quick ratio?

Which of the following is a generally accepted method of determining the amount of the adjustment to bad debt expense?

Loans and receivables are initially recognized at

Which of the following describes the behavior of the variable cost per unit?

Which of the following best describes the relationship between fixed costs per unit and variable costs per unit, as total volume increases?

Period costs

Financial statements shall include disclosures of material transactions between related parties except

Which of the following is not a line item on the face of the income statement using the function of expense method?

The ledger of Dauntless Academy as of the end of reporting period contains the following: Cash P50,000 Trade Accounts Receivable 20,000 Held for Trading Securities 10,000 Financial Assets designated at FVPL 38,000 Prepaid Assets 46,000 Investment in Associate 52,000 Sinking Fund 41,000 Goodwill 16,000 How much is the total current assets?

The following financial data have been taken from the records of Dauntless Company: Accounts receivable P200,000 Accounts payable 80,000 Bonds payable, due in 10 years 500,000 Cash 100,000 Interest payable, due in three months 25,000 Inventory 440,000 Land 800,000 Notes payable, due in six months 250,000 What will happen to the ratios below if Dauntless Company uses cash to pay 50% of its accounts payable?

On January 1, 20x1, Dauntless Co. established a petty cash fund of P400. On December 31, 20x1, the petty cash fund was examined and found to have receipts and documents for miscellaneous expenses amounting to P364. In addition, there was cash amounting to P44. What entry would be required to record replenishment of the petty cash fund on December 31, 20x1?

An entity had retained earnings of P3,300,000 at the beginning of 2023. Throughout 2023, the entity had 20,000 ordinary shares of P100 par value that are issued and outstanding. During 2023, the entity reported net income of P5,500,000, purchased treasury shares for P600,000, declared cash dividends of P1,800,000, reissued all treasury shares at a gain of P150,000, and declared and issued a 10% ordinary share bonus issue when the market value was P150 per share. What amount should be reported as retained earnings on December 31, 2023?

Dauntless Academy reported accounts payable on December 31, 2023 at P900,000 before any necessary adjustment relating to the following: Goods were in transit from a vendor on December 31, 2023. The invoice cost was P50,000 and the goods were shipped FOB shipping point on December 29, 2023. The goods were received on January 4, 2024. Goods shipped FOB shipping point on December 20, 2023 from a vendor were lost in transit. The invoice voice cost was P25,000. On January 5, 2024, the entity filed a P25,000 claim against a common carrier. Goods shipped FOB destination on December 31, 2023 from a vendor were received on January 6, 2024. The invoice cost was P15,000.

The contribution margin ratio always increase when

On January 1, year 1, Sip Co. signed a five-year contract enabling it to use a patented manufacturing process beginning in year 1. A royalty is payable for each product produced, subject to a minimum annual fee. Any royalties in excess of the minimum will be paid annually. On the contract date, Sip prepaid a sum equal to two years’ minimum annual fees. In year 1, only minimum fees were incurred. The royalty prepayment should be reported in Sip’s December 31, year 1 financial statements as

Which of the following is/are correct statement? I. A financial asset and a financial liability shall be offset and the net amount presented in the balance sheet when, and only when, an entity currently has a legally enforceable right to set off the recognized amounts II. The normal operating cycle of a business is disregarded when classifying nontrade receivables as current or noncurrent.

Which of the following will result in raising the break-even point

Which of the following statement is/are correct? I. Capital budgeting is the process of evaluating and selecting short-term investments consistent with the firm’s goal of owner wealth maximization. II. The purchase of additional physical facilities, such as additional property or a new factory, is an example of a capital expenditure.

A partnership has the following accounting amounts: Sales P900,000 Cost of goods sold 500,000 Operating expenses 200,000 Salary allocations to partners 100,000 Interest paid to banks 48,000 Partners’ drawings 55,000

Which of the following statements is/are correct? I. Variable costs per unit are affected by changes in activity. II. A cost is either direct or indirect. The classification will not change if the cost object changes.

It refers to a type of partnership wherein all partners are liable to the creditors pro-rata up to the extent of personal or separate assets after the partnership’s assets are exhausted.

When a new partner is admitted to an existing partnership through the purchase of a portion of existing interest of an incumbent partner, which statement is correct?

Which of the following is/are correct? I. There is no delay in an obligation not to do something, II. Solutio indebiti and negotiorum gestio are implied contracts.