7/25/2019 TOA 2012 Mock Exam

1/8

l) a.

Relevancc and

prudence

b. Reliability

and

conservatism

C

a.

Cost

hedge or

lhir

value hedge

b. Cost

hedge

or

cash

florv

hedge

,,\ 4

Arrive

at thc

correct

cash

balancc

h. Unearth

an-v

undctccted

caslt

fraud

-1.

Current

tax expetrse

plus

deferred

tax expense

is

ll

a. A meaningless

sum

,'61

(l

C

a.

[nductivc

rcasoning

b. Experience

A

.-r.

lnventory'

b. Property,

plant

and eqtriPment

3.

What

is

rhe

correct sequence

in dealing

with the national

budget

for

various

government

agencies'?

t] a.

Allocation, appropriation,

liquidation, obligation

b. Appropriation,

allocation,

obligation,

liquidation

c. Obligation,

appropriation.

liquidation.

allocation

d. Appropriation,

obligation,

ailocation,

liquidation

4.

A

bank

reconciliation

is

prepared

monthly

in order

fbr the enterprise

to

10.'I'heclassificationofaleaseaseitherctperatingorlinancelease

isbasedon

C

a.

The

length of the

lcase

b. l'he

economic

lif'e

of

the asset

.c.

The transier

of the

risks and

rcwards of ownership

d.

The minimum

lease

paynrents

being

at

least

50%

of the

tair value

I

l.

When

it is

impracticable

to deternrine

the efJbct

of an

eror

for all

prior periods,

the entity

C a.

Restates

comparative

inlirrmation

prospectively

ltom the earliest date

practicable

b.

Restates

col-nparative

infbrmation

prospectively up to

the latest date

practicable

pa

Restates

comparative

infbrrnation

retrospcctively

fiom

the earliest date

practicable

d.

Restates comparative

intbrmation

retrospectively

up

to the latest date

practicable

12. An SME,

whose onl,"- changes

to

its equity in

the

periods tbr

which flnancial statements

are

presented

arise

from

profit

or

lqs;.

payment

of dividends.

corrections

of

prior

period error and changes

in acc

7/25/2019 TOA 2012 Mock Exam

2/8

TA Mock

Exam

-rhlEORY

of

ACCOUNTS

Mock CpA Board

Exarnination

(page

2)

15.

Once

a

government

agency

receives

Noticc

of Cash

Allocation

(NCA).

it

shall

clebit

"Cash-National

Treasury.

Modiiled

Disbursement

System"

anrJ

crcdit

16.

The level

of rounding

used

in

the

financial

staterne,tts

refers

tct

A

,

-:*:.

I'he truncation

of

the amounts prcsented

b.

The

abbreviation of

words

r-rsed

c.

-l-he

shortening

of

the notes

by

removing comparative

numbers

d. The presentation

ofa

concise

financial

report rather

than

a

full

iinancial

report

I 7'

Which

of the

following

organizations

is responsible

for setting

International

Financial

Reporting

Standards?

i,

a.

Financial

Accouriting

Standards

Board

c. International

Acoountirrg

Standards

Committee

.d.

International

Accounting

Standards

Board

tr,. Financial

Accounting

Comrnittee

p,argo

Corporation prepares

its

financial

staternents

in

accordance

with

PFRS.

Which

of

the following

items

is

''required

disclosure

on the income

statement?

p.

R.evenues,

cost

ofgoods sold, and

advertising

expense

b.

Finance

costs,

tax

expense,

and

income

c.

Operating expense,

non-operating

expenses,

ancl extraordinary

itenry

d. Gross profit,

operaling

profits,

and nct

profit

19.

An

entity

that

is

not

publicly

accountable rnust

make

an

explicit

and unreserved

statement

of

compliance

with

the

PIjltS lbr

SMEs:

A a.

lf

the

entity

ccmplies

with-all

the requirements

of

PFI{S

for

SMEs.

b. II'the

entity complies with

the vast

majority of

the

requirements

of

PFRS

tbr

SMEs.

c.

If

the

entity

complies

with

the national

G,AAP based

on PF

RS for SMEs

with

sorne specific differences.

d.

lf

the

entity complies \.vith

full PFR.Ss.

20.

lf an

entity does not

prepare

interirn financial

reports,

then

B

a. 1'he

year-end

financial statements

(FS)

are

deemed nol to

comply with

PFRS

b:'

The

year-end

FS

compliance

with

PFRS is

nct affected

c. 1-he

year-end

FS

will

not

be

acceptable

under local legislation

_

d.

Interim

financial reports

should be included

in

the

year-end

F'S

i

/r.

'nt

what

amount is

a financial

asset or

financial liability

meisured

on

initial

recognition?

A

"

-

a.

Fair value"

For

items that

are

not measured

at

fair

value through

profit

or

loss,

transaction costs

are

also

included

in the

initial

measurernent

b.

The consideration

paid

(received)

for the

llnancial asse't

(financial

liability)

9.

Acquisition

costs,

which

is the

consideration

paid

plus any

directly

atffibutable

costs

d. Zero

22.

Which

of the

following

methods

is

used

in

PFRS

to

account for

define

7/25/2019 TOA 2012 Mock Exam

3/8

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4/8

Refifr

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4i@.

D

-

a.

.

Future

operating losses

b.

Obligations under

insurance

contracts

ll a.

..

Cost-benefit

b. Substance

over form

A

_z:"

Cantra current

asset account

b.

Contra noncurrent

asset account

52.

Uider

percentage

of completion method,

the

Progre.ss

Billings account

is a

',

.

53.

ln

the case of

grants

related

to

an

assel. which

of these

treatments is

prescribed

by

PAS

20'l

B

a. Record

the

grant

at a

nominal

value in

the first

year

and write it

off

in the

subsequent year

"b.

Either

set up

the grant

as

deferred income or

deducf

it

in

arriving

at the carrying

amount

of the

asset

c.

Record

the

grant

at

fair value in

the first year

and take it

to

inconrc

in

the subsequent

year

d.

l'ake

it to the income

statement

and disclose it

as an

extraorrlinary

gain

54.

A small and

medium-sized

entity must measure

its

property,

plant

and equipmenr

after initial

recognition

at

B

a. Cost

b. Cost

less

any

accumulated

depreciation less

any accumulated impairment

losses

c.

Cost

less

any accumulated

depreciarion less

any accumulated

impairnrent

losses

plus

the cost

of

day-

to-day

servicing

d.

Cost

plus

the cost

of day-to-day

servicing

55.

Which of

the

following

are acceptable met.hods

for reporting

comprehensive

incorne

uniler PFRS?

I)

One

comprehensive

income

stai-ement.

ll)

Two statements:

an

income

staterment

and

a

comprehensive

income

statement.

III) In

the statement

of owners' equity.

B a.

I

only. c.

I, II.

and

lll

b. I and ll

only

d. I

and

ttt

onty

56.

Clenda

Corporation

prepares

its financial

statements

in

accr:rdance

with

PFRS.

Glenda must

report

the

statement of

cash

flows:

p,r-,..

r.'r,i

:

.

,,

r,1

,

,

B

a. ln

operating activities.

b. Either

in

operatin

activities

or

financing

o"iiuiri"r.

-

c.

In

financing

activities.

d.

In investing

activities

or

financing

activities.

TA

Mock Exam

THEORY

cf

ACCOUNTS

Mock

CPA

Board Examination (page

4)

.i2.

Which

is not

an

objective

of

the

New

Covernment

Accounting

System?

(l

a.

Simplify

governrnent

accounting

b.

Confbm

to International

Financial

Reporting

Standards

"p..

Cornply

with

the

requirements

of

International

Monetary

Board

f

-r

tl.

(ienerate

periodic

and relevant financial

repofts for

better monitoring

or

performance

l'i.i.

-,.Whcre

a business

transaction

requires

a direct

adjusfment

to an equity

u.count,

the tax effect is

adjusted

against:

b"

tax

expense d.

cash

.,14.

Which

of the

following

statements best

describes

tlre

rernr guing

concern?

\.;

e.

-lhe

expenses

of

an

entity exceed its income

b. When current liabilities

of

an entity exceed

current

assets

c.

'Ihe

ability

of the entitv

to continue in

operatiorr

lor the foreseeable

f'uture

d. The

potential

to contribule to

the flow

of

cash

and

cash equivalents

to the

entity

.15.

An

entity that

presents

its first PFRS financial

statements

is known

as

I

a.

Originating

entity

c. First-time

adopter

b. Provisional presenter

d.

Initial

financial

reporter

46. Which

one

ot'the following is not

a source

o{'generally

accepted accounting

principles

in the

Philippines?

C

.a.

Existing

practices

in the

Philippines

b.

Available

literature

on the topic

or

suLrject

under

study

c. Pronouncements

by

the

Association

of CPAs

in

Public Practice

d.

Statements, recommendations, studies,

or

standards issued

by

standard-setting

bodies such

as the

International Accounting

Standards

Board

and the

F'inancial

,Accounting

Standards Board

47.

When

the

revaluation

model

is

used

lor

reporting

PPE,

the

gain

or

loss should

be included

in:

C

a. lncome for

the

period,

b. Gain liom revaluation on

the

income

statement.

c.

A

revaluation

surplus account in other comprehensive

income,

d.

An extra

7/25/2019 TOA 2012 Mock Exam

5/8

D

a. I only

b.

Il

onlY

TA Mock

Exam

THEORY

of

ACCOUNTS

Mock

CPA

Board

Examination

(Page

5)

36.

Which

of

the fbllowing

is

the

tirst

step

within

hierarchy of

guidance

to

which

management

ref'ers,

and

whose

applicability

at consiclers.

when selecting

accounting

policies?

B

a.

Consider

the

most recent

pronouncentents of

other standard-setting

bodies

to the extent

they

do

not conflict

.

lvith PFRS or

the Conceplual

Framework.

V: Apply

a standard

fronr

PFRS if

it specifically

retates to the

transaction,

event,

or condition.

c.

Consir1er

the

applicability

of the

definitions,

recognition

criteria,

and

rneasurement

concepts

in

the

C

o nceptual

I;r am

ewor k.

d.

Apply

the requirements

in

PFRS dealing

with similar

and related

issues.

17.

What are

the rules

on

the use

of

govemment funds?

D

a.

No obligations

shall

exceed

allotment

c.

,

No

allotment

shall

exceed

appropriation

b.

No

liquidation

shall excced

obligation

"il

All

of the choices

18. Where

there

is

a lease of

land and buildings

ancl the

title

to the

land is not

transt'erred,

the

lease is

trealed

as

if

(-'

a.

Both

land and

buildings

are

finance leases

b.

Both

land and

buildings

are

operating

leases

.c.

l-and

is operating

leascl

building

is

tinance

lease

d.

[,and

is finance

lease;

building

is

operating

lease

.i9.

The

results of

discontinued

operations

should be

presented a single

amount

in the

D

a.

statement

of changes

in

equitY

b.

income

statementln

juxtaposition

with

incorne

from continuing

operations

.

c.

.

income statement,

before

tax,

separately

liom income

from continuing

operations

.d.

incclme statement,

after tax,

separate[y

from

income

from

continuing

operations

,40.

An accountant

uses

creative skills

and

judgment

when he or she

D

n.

Attest to the

fairness of

presentation of

t-inancial condition

and

performance

of an

entity

b.

lnterprets

the

information

presented

in the financiat

statements through

ratios

and trend

analysis

c.

Applies

the

rules of

debit

and credit

d.

Pertbrrns

the

functions

described

(a)

and

(b)

above

but

not function

(c)

41.

Which

of the

tbllowing

is true

regarding

reporting

deferred

taxes

in the

financial

statements?

B

a.

De{erred

tax

aisets

and

liabilities

are

classitied

as

current

and

noncurrent

based

on their

expiration

date.

b.'

Dcferred

tax assets

and

liabilities

nray be

classified

only

as noncurrent.

c.

Det'erred

tax assets

are

netted

with deferred

tax

liabilities

to arrive

at one

amount

presentetl on the

balance

slteet.

d.

Deferre6

taxes

of

one

jurisdiction

are

oft'set

against

another

jurisdiction

in

the nctting

process.

42. Which

of

the

tblorving

is a

criterion

that

must be

met

in order

for an item

to bc

recognized

as

an

intangible

asset

other

than

goodwill?

D

a.

'l'he

item's

lair

value

can

be measured

reliabll'.

b.

The

item

is

part

of

the entity's

activities

aimed

at

gaining new scientific

or

technical

knowledge.

c.

The

item

is

expecrcd

to

be

used in the

production or

supply

of

goods or services.

d.-

The

itern

is identifiable

and

lacks

physical

substance.

4j.

According

to

PAS

24,

which one

of the

fottowing

is

not

a

related

parq,

of

AIIC

Company?

B

a.

.

A shareholder

of

ABC

Company

owning

30%

of

the ordinary

share

capital

b:

An entity

providing banking

facilities

to

Atlc Company

c.

Key

management

personnel

of

ABC Company

d.

An associate

of

ABC

ComPanY

44.

't'he

excess

of the

fair

value

of

leased

property at

the

inception

oithe

lease

over

its cost or

carrying amount

should

be

classified

by the lessor

as

C

a.

Unearned

income

liom

a sales-type

lease

b.

Uneamed incorne

fiom

a

direct-tlnancing

lease

c.

Manufacturer's

or

dealer's

profit

from a sales-type

lease

d.

Manufacturer's

or

dealer's

profit

fiom

a

direct-financing

lease

45.

The

tbllowing

statements

are based

on

the Conceptual

Framework

of

Accounting:

Stqtemenl

1:

The Conceptual

Framework

is a

repo(ing

stand4ld'

''

Statement

1L'

In cases

of

conflict,

the

requirements

of

the Coriceptual

Framework

prevail over those

of

the PFRS.

Statement

ill: The

Conceptual

lrramework

states

that trahsaction

must be accounted

for according

to

their

legal form.

B

a.

All

of the

statements

are true

c. Statement

I is true;

statements

ll and

lll are

false

b.

All

of

the statements

are

false

d.

Statements

I

and

III

are

truel statement

ll

is

false

46.

]'he

following

statements

are

based orr

the PFRS

8

(Opcrating

Segments):

An

entity

shall

report

separately

infonnation

about

an operating

segment

that

meets any

7/25/2019 TOA 2012 Mock Exam

6/8

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TA

Mock

Exam

IHEORY

of

A.CCOIJNTS

Mock

CpA

Board

Examination

(page

6)

'i

.i.

The

fr'rllowin,e

statements

are

based

bn the PAS

I

(Presentation

of

Financial

Statements)

i

Stitan

?nt

1.'

The

number

of

shares authorized

ftrr

issue

shall

be shorvn

in the

statement

of

financial position

or

the

statement

of changes

in

equity

or

in

the notes

to the financiai

statements.

Statement

11,'

An

entity

presenting

a

separate

income

statement

and a statement

of comprehensive

income

shall

present

a

statement

of changes

in equity.

Statemeitt

lll:

An income

statentent is prepared

under

the

"natural

presentation"

when

it

presents

expenses

based

on

iogislics. marketing

and

production.

Vr'hich

olthe

lbregoing

statements

are true'.)

(-r

a" I onlv

b. il onlv

4ll.

-l.he

following

staternents

are based

on the PAS

29

(Financial

Repoiting

in

I{yperinflationary

Economies);

Stslement /:

,The

financial

statements

of

an entity

whose functional

currency

is

the currency

of

a hyperinflationary

economy

shall be stated

in terms

of measuring

unit

current

at the end

of

the

reportjng

period

(balance

sheet date).

Siatement

ll.'

'l'hc

gain

or

loss

on

the

net

monetary position

shall be included

in

profit

or

loss and

separately

disclosed.

'*atement

11l:

When

an economy

ceases to

bc hyperinflationary,

an entity

shall

trcat the amounts

expressed in the

measuring

unit

current

at the end of

the reporting period

as the basis

lor carrying

amounts in the

subsequent financial

stater]1ents.

A

il:

All

of the

statements are true

b. 0nly

statement

I is

true

49.

An

example of

a

nominal contra account

is

Il

a. Freight-ln

'

b. Accumulated

depreclation

50.

When

an entity

chooses

the

revaluation rnodel

as its accounting

policy for

measuring

property, plant,

and equipment,

which

olthe

following

statemenrs is con'ect'.)

A

a. When

an asset

is revalued,

the

entire class

of

property,

piant,

and equipment

to

which

that asset

belongs must be

revalued.

b. When

an asset is revalued, individual

assets

within

a class

of

property.

plant,

and equipment to

which

that

asset

belongs

can be revalued.

c.

Revaluation

of

property, plant,

and equipment

must be rnade

at least every

three

years.

d.

Increases

in

an

asset's carrying value

as a result

nl' the first

revaluation

must be

recognized as

a

component of

p'ofit

or loss.

51.

Which

of

the following is

usually

N0'l'discloscrt

in

the selected

explanatory notes

tbr

an interinr

finalcial

reporr?

C a.

Accounting policies

and methods

b.

Events

after the

interim

period

a.

Revenue

b. Income

54. Which

of

the

tbllowing

is

not

entities

of

SMEs?

D

a.

Cost model

b.

Equity

method

A

a. Three

statements

of

financial position

b. Two

statements

ol'financial position.

c.

I

and

Itr

d.

l.

Il

and

III

c.

Only statement

ll

is true

d"

C)nly statement

lll is

false

c. Premium

on bond

liability

d.

Sales

returns

and

allowances

c.

Nature

olentity's

operations

d.

Seasonality

or cyclicality

of interim

operalions

c. Prol'its

used

in

accounring ,rr ,'rrr,rfi)lrl,

in

a,rsociates

an

7/25/2019 TOA 2012 Mock Exam

7/8

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a. Points

b. Awards

B

'a.

Gross investment

in

the lease

.

-

-.

.-

Net

investment in

the lease

..8

l.

.'Which

prepares

the

national govemment

buclget?

A

'-

''

a. Executive

department

-bl.

Legislative

deparfment

D

:

?{.'

I and ll

only

b.

lll

and

iV

only

'78.

A'-

79.

Which

of the fbllowing

statements

aLrou{

financial

statements is inconect?

D

a.

They

provide

information

about the financjal position. performance,

and

cash

flows

of

un

enrerprise

that

is

useful to

a

wide

range

of

users

in

making economic

decisions

'

b. They are the

primary

responsibility

of the rnanagement

of the

enterprise

'

c.

They

show the results

of

,he

stewardship

of

the management

for

the

resources

entrusted

to it

by the

capital

providgrs

_d.'

They are prepared

at

least

annually

and are

directed

to

both the

common and

specilic inlbrmation

'

needs

o1'a wide range

ol'stal.ement

usL'rs,

80.

Lessor shall recognize

asset held

under

a flnance lease

as a receivable

at

an anroun{

cqual to

c.

Llredits

d.

Royalty

c.

Cross rentals

d.

Residual

value, guaranteed

or not

c. Judicial

departmcnr

d. All

three

branches

of

gr;vernnrent

c.

l,

Il

and

lll

only

d"

I.

ll.

Ill

and IV

TA

Mock

Exam

THEORY

of

ACCOUNTS Mock

CPA

Board.Examination

(Page

7)

i'72.ltJncler

If Rlcl

19,

how should

an

entity

meLsure

equity

insffuments

issued to

extinguish al or

part

of a financial

r*

,

liability

(in

the

7/25/2019 TOA 2012 Mock Exam

8/8

RcSA

-T&

fuua,u,

|rf"d

4

A"rp,^**,*,r

b. A

primary

financial

insffument

b" Philippire

Congress

d. Bangko

Sentral

ng

pilipinas

90.

A

bond or similar

instrument

convertible

by

the holder

into

a fixed

number

of

ordinary

shares

of the

entity is

(-

a.

en

cqtiity

instrument

z

Acompound

financialinitrument

,

9l

I

Which

information

should be

disclosed

in relatjon

to dsrivative

contracts?

C

a.

. "

Fair

value

only

'b.

Notional

ainount onlv

d.

A

derivative

financial

instrument

c.

Bqth fair

value

and notional

amount

d. Neither

fair

value nor

notional

amount

TA

Mock

Exam

THEORY

of

ACCOUNTS

Mock

CPA

Board

Examination

(page

B)

',86.

Which

of the

following

is

not a

function of the

Commission

on Audit?

i-

"'

-'--

'

?.

It is the

gtlvernment

body

that

prescribes

the

use

of New

(iovernment'Accounting

System

(NCAS)

b" It keeps

the

general

accoullts

of the

governments.

c.

It

is charged

with responsibility

and

approval

of accounting

system for government

agencies

{DBM}

.,

I

.

d.

It

prepares

that annual

FS of

the national

and

local

govemmerlts,

agencies

including

COCCT.

'''

87.

Accounting

that recognizes

changes

in

tlrc

purchasing

power

of money

is known

as

A

a. Price-level

accounting

c.

Current value

accounting

b. Historical

accounting d.

Traditional

accounting

88.

What

is the

reasonable

upper

limit

for the

nurnber

of

operating segments

that

an entity

must

disclose?

f)

a.

Two

c.

Si.x

-

b.

Five

.*:

Ten

4.

I til'

89.

I'hePresidentcannotcontractorguaranteeforeignloansonbehalfoftheRepublicwithoutthepriorconcurrenceof

A

a. Monetary

board

c.

Supreme

Court

92.

tsudget

execurion

refers

to

B 'a'

It

is

the enactment

of the general

appropriation

bill into law

by

Congress.

{budget

authorization}

y

lt is

the

intplementation

of the government

budget

by different

departments

and release

of allotments

c.

It

involves

the comparison

of

performance

with

predeternined

government

plans

and

evaluation

of

-

expenditures

and

performance.

{budget

accountability}

d" It is

the authorization

from

DBM

to

an agency

to

incur

obligation

up

to.a

specified

amount

that

must

be

within the legislative

appropriation.

{allotment}

93.

How is

goodwill

arising

on

the

acquisition

of an

associate

dealt with

in

the financial

statements?

D

a.

It

is amortized

b.

Ir is

tested for

impairment periodically

c. It

is written

offagainst

profit

or loss

d.

Coodwill

is not recognized

separatcly

within

the

carrying

amount

of the investment

94-

Under IFRIC

I7,

an entity

shall measure

a

liability

to distribute

noncash

asset

as dividend

to

irs

owners

1i.e.,

property

dividend

as a noncash

distribution

to shareholders)

at

B a'

Carrying

amount

of the

asset to

be distributed

c.

Higher

amount

between

(a)

and

(b)

,-^\

-

_

b.

Iair

value

of the

asset to

be distributed

d.

Lower

amount

between (a)

and

(b)

[95.\

It

is

a scheme

dgveloped

to encourage

participating

companies

reduce

emission

of

greenhouse

gases

to specified

\

-

levels.

C

a.

Carbon

Emission

Scheme

o.

Cap and'frade

Scheme

b. Environmental

Accounting

d, Creenhouse

Effect

Accounting

96.

Which

of the following

statements

best

describes

the

National

Budget

System?

D

a. It

consists

of the

methods

and

practices

of the

government

for

planning.

programrning

alrd

budgeting

b.

It

includes

the

adoption

of

sound

economic

and

fiscal policies

c.

lts

primary

concern is'the

availability

and use

of money

to provide

the

necessary

services

expected

of

the

government

.d-

All

ofthe

foregoing

statements

describe

the National

Budget

System

97.'

Under

PFRS

I

I,

what

is

thi

method

of

accounting

for

investment

in

joint

venture?

B a.

Cost

method

_s:

Fair

value

method

-

b.

Equity

method

d. Consolidation

method

"

98-

Ordinary

shares

issued

as

part

of

business

combination

are included

in the

EpS

computation

ftom

A

.

a. The date

of

acquisition

c. The

midpoint

of the

aciounting

year

b.

The end

ofthe

accounting period

d.

The

beginning

ofthe

accountine

period

99.

under PFRS

9, an

entity

shall

measure

a note

after

initial recognition

at

C -

a'

Amortized

cost

c.

Elther

amortized

cost

or fair

vahle

thru

p/L

b.

Fair

value

thru

P/L

d.

Either

amortized

cosr

o, iuir

rutr"

thru

OCI

l0O.NGAS

is

applicable

to

all of

the following,

except

B

a.

GOCCs

c.

Cities

and

municipalities

$.

Barangays

d.

Departments

and

government

agencies

(flE

N

D

x-r

ERRAI|UM/CLARIFICAT|ON

-

retained

eamings

to

contributed

capital

(i.e..

total

equity

does not

change);

hence,

answer

should

be

e(not

.B').