1. Share issuance costs shall be charged to Share Premium from the share issuance.

1. At the end of reporting period, the company recognizes expenses that were incurred during the period but were not paid.  This is done so that expenses and liabilities are not overstated and profits are not understated.

1. Share dividends payable is not a liability but rather presented as addition to share capital in the shareholders' equity section of the statement of financial position.

1. Deferred revenue is income already received but not yet earned

1. Under the journal entry method, the issuance of share certificate is recorded by a credit to the share capital account.

1. Provisions or Estimated Liabilities differ from Other Liabilities because of the uncertainty in the timing of their settlement or the amount needed to settle them.

1. Dividends may still be declared by the Board of Directors even if the corporation incurred a net loss for the current year provided there is sufficient balance of retained earnings. 

1. When the bonds are sold at a premium, the effective rate is greater than the nominal rate.

1. The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off its long-term debt.

1. Trade payables are classified as current liabilities when they are expected to be settled within the normal operating cycle or one year, whichever is shorter.

1. Cash in bank includes restricted funds deposited in a bank that can be withdrawn upon demand of the entity .

1. Contingent liabilities are obligations which exist at the end of the reporting period although their amount is not definite.

1. Treasury shares are a company’s own shares that have been issued and reacquired.

1. Preference share does not usually carry the right to vote.

1. Premiums Payable is an example of a determinable current liability. 

1. A company whose current liabilities exceed its current assets may have a solvency problem.

1. If an entity cannot distinguish the research phase of an internal project to create an intangible asset from the development phase, the entity treats the expenditure for that project as if it were incurred in the research phase.

1. Goodwill is not recognized in accounting unless it is acquired from another business enterprise

1. Depletion expense is reported in the income statement as an operating expense.

1. When purchasing delivery equipment, sales taxes and motor vehicle licenses should be charged to Delivery Equipment.

1. Recording depreciation each period is an application of the matching principle.

1. Natural resources are long-lived productive assets that are extracted in operations and are replaceable only by an act of nature.

1. Salvage value is not subtracted from plant asset cost in determining depreciation expense under the declining-balance method of depreciation

1. The cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable taxes before deducting trade discounts and rebates.

1. Additions and improvements to a plant asset that increase the asset's operating efficiency, productive capacity, or expected useful life are generally expensed in the period incurred.

1. Recording depreciation on plant assets affects the balance sheet and the income statement.

1. Under the double-declining-balance method, the depreciation rate used each year remains constant.

1. A loss on the exchange of plant assets occurs when the fair market value of the old asset is less than its book value.

1. The cost of a patent should be amortized over its legal life or useful life, whichever is longer.

1. When purchasing land, the costs for clearing, draining, filling, and grading should be charged to a Land Improvements account.

1. The balances of the major classes of plant assets and accumulated depreciation by major classes should be disclosed in the notes to financial statements.

1. Both merchandising and manufacturing companies normally have multiple inventory accounts.

1. Specific identification is used for inventories that are not ordinarily interchangeable and those that are segregated for individually unique items.

1. Cash discounts are deducted from the list price to arrive at the invoice price.

1. An inventory write-down exists when the cost is greater than its net realizable value.

1. In all cases when FIFO is used, the cost of goods sold would be the same whether a perpetual or periodic system is used.

1. Weighted average cost and moving average cost always produce the same peso amounts for ending inventory

1. Radiant, Inc. sells collectible jewelry on consignment from various manufacturers and should include this consigned inventory on its statement of financial position.

1. Goods in transit, shipped FOB shipping point, are included in the seller’s statement of financial position at the time of delivery to the common carrier.

1. Investment in debt securities at amortized cost is measured by computing its present value using the effective interest method

In Investment in Equity Securities measured at fair value through profit or loss, if the fair value at year end is greater than carrying amount, there is unrealized gain to be recognized in the Income Statement.

1. The investment in associate shall be initially recognized at cost which is fair value plus transaction costs and is subsequently measured at fair value method.

1. The treatment of transaction costs incurred in the acquisition of investment in debt securities measured at fair value through other comprehensive income shall be expensed by the entity upon purchase.

1. Financial assets held for trading and are popularly known as trading securities  are measured at fair value through profit or loss as required by the standard.

1. The Philippine Financial Reporting Standard requires that companies classify financial assets into two measurement categories – amortized cost and fair value

1. Investments are debt or equity instruments of another entity mainly held for active income.

1. Postdated checks issued by an entity do not qualify cash because postdated checks are not yet presently available for immediate use.

1. In cases where there is a conflict between an accounting standard and the Conceptual Framework, the requirement of the Conceptual Framework will prevail over the requirements of the accounting standard.

1. Notes to financial statements are considered an integral part of general-purpose reporting.

1. The Conceptual Framework forms the foundation of accounting.

1. For financial information to be useful, it must be reliable and faithfully represent what it purports to represent.

1. Customers' credit balances resulting from overpayments, returns and allowances  and advance collections from customers  are classified as current assets in the statement of financial position.

1. When a company already issued and recorded a check to the payee, but the latter has not presented this check to the bank for deposit or encashment for a relatively long period of time, it is known as a stale check.

1. Trade receivables are generally classified as current because of the concept of normal operating cycle.

1. The note is issued at a premium when the nominal rate is less than its effective rate.

1. The present value is the sum of all future cash flows discounted using the nominal rate at the date of issuance of the note.

1. Financial statements are prepared on the assumption that the reporting entity will continue in operation for the foreseeable future of time.

1. Bank overdrafts occur only in the checking accounts.

1. The qualitative characteristic of "timeliness" ensures that financial information is made available before it loses its ability to influence decisions.

1. An asset is a present economic resource owned by the entity as a result of past events.

Which of the following is true about bank overdraft?

In which of the following accounts are post-dated checks received classified?

Which of the following is the primary reason why a company sells it’s receivables to another entity

Accounts receivable shall be reported at

Under GAAP, which bases of accounting is most commonly used in the preparation of financially statements?

What is the basic requirements for cash and cash equivalent?

All of the following are classified as cash equivalents, except

What is the treatment for the interest paid by the bank to the depositor's account?

What is the objective of financial statements

Which of the following statements best describes "comparability" in the context of useful financial information?

1. Which form of receivable financing is equivalent to an absolute sale of accounts receivable?  

1. Which of the following items should not be included in “cash”?

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

1. Which of the following correctly describes bank reconciliation?

1. Which of the following methods of accounting for doubtful accounts is permitted under GAAP?

1. Net realizable value is

Unrealized holding gains or losses on financial assets measured at fair value through profit or loss are reported in

Which of the following is not a financial asset?

1. In a period when cause are rising, an inventory equities are stable, the inventory method that would result in the highest ending inventory is:

Which of the following is a characteristic of a perpetual inventory system?

1. Investments in associates are normally presented under

1. Inventories are initially measured at 

Which of the following is not included in the initial measurement of inventories?

1. Under the net method, purchase discount lost is

1. It is any contract that evidences residual interest in the assets of an entity after deducting all of the liabilities.

1. Which of the following is a classification category for financial assets under IFRS 9?

1. Changes in the fair value of an equity instrument classified as Fair Value Through Profit or Loss are recognized

Which inventory costing method is not permitted under IFRS?

1. If goods in transit are shipped FOB destination

1. Which of the following costs can be capitalized as part of inventory under IFRS?

1. Research and development costs

1. Intangible assets

1. The cost of successfully defending a patent in an infringement suit should be

1. The book value of a plant asset is the difference between the

1. In computing depreciation, salvage value is

1. Expenditures that maintain the operating efficiency and expected productive life of a fixed asset are

Identify the item below where the terms are not related.

1. Depreciation is the process of allocating the cost of a plant asset over its service life in

1. The cost of land does not include

1. The most common method of recording depletion for accounting purposes is the

Goodwill can be recorded

Productive assets that are physically consumed in operations are:

1. A gain or loss on disposal of a plant asset is determined by comparing the

1. The calculation of depreciation using the double-declining balance method

1. The book value of an asset is equal to the

1. Which of the following terms is associated with recognizing a provision?

1. Which of the following is a characteristic of a current liability but not a non-current liability?

1. Which of the following is an appropriate presentation of treasury shares?

1. What is the relationship between present value and the concept of a liability?

1. The pre-emptive right of an ordinary shareholder is the right to

Which of the following situations may give rise to unearned revenue?

Which of the following represents the total number of shares that a corporation may issue under the terms of its charter?

1. In accounting for shareholders' equity, the accountant is primarily concerned with which of the following?

1. Bonds issued with scheduled maturities at various dates are called

1. After initial recognition, bonds payable shall be measured at

1. The accounting for warranty cost is based on the matching principle, which requires that the estimated cost of honoring warranty contracts should be recognized as an expense

1. The pre-emptive right enables a shareholder to

1. The proceeds from the issue of the bonds payable

1. The cumulative feature of preference shares

Which of the following methods is commonly used to estimate the useful life of an asset?

1. What is the primary purpose of a cash flow statement?

1. Which of the following is a key characteristic of a liability?

What is the primary purpose of the statement of cash flows?

1. Which of the following best describes the matching principle in accounting?

Which of the following is a characteristic of financial assets measured at fair value through other comprehensive income?

1. Deferred tax assets arise when taxable income is greater than accounting income due to temporary differences.

1. Inventory is always valued at the lower of cost or market value.

1. Operating leases are recorded as assets and liabilities on the balance sheet under the new accounting standards.

1. When a company issues bonds at a discount, the effective interest rate is lower than the nominal interest rate.