Midterm

University of Saint Louis Tuguegarao
SCHOOL of BUSINESS ADMINISTRATION and ACCOUNTANCY

Mabini Street, Tuguegarao City, Cagayan, Philippines 3500
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INTEGRATED ACCOUNTING PART 1 ( Midterm Examination)

Set A
Instruction: Shade the letter of the correct answer. Strictly no erasures.

1. A critical characteristic of a derivative is that the instrument
a. derives its value from a related asset or liability.
b. derives its value from changes in value of a related asset or liability.
c. requires that the related asset or liability be sold or bought at settlement.
d. requires the holder of the derivative instrument to make a significant investment.
2. The notional amount of a derivative instrument is

a. related to the number of units specified in the derivative and the price that relates to the
asset or liability underlying the derivative.
b. the change in the price or rate that relates to the asset or liability underlying the derivative.
c. the price or rate that relates to the asset or liability underlying the derivative.
d. the number of units that is specified in the derivative instrument.
3. The total value of a derivative is determined by the

a. number of units specified in the derivative and the price that relates to the asset or liability
underlying the derivative.
b. change in the price or rate that relates to the asset or liability underlying the derivative.
c. price or rate that relates to the asset or liability underlying the derivative.
d. number of units that is specified in the derivative instrument.
4. A forward contract
a. is NOT traded on an organized exchange and is customized to meet the needs of the
parties.
b. is NOT traded on an organized exchange and is subject to formal regulation which results
in standardized contracts.
c. is traded on an organized exchange and is subject to formal regulation which results in
standardized contracts.
d. is traded on an organized exchange and is customized to meet the needs of the parties.
5. A futures contract
parties.
b. is NOT traded on an organized exchange and is subject to formal regulations which results
in standardized contrasts.
c. is traded on an organized exchange and is subject to formal regulations which results in
standardized contrasts.
6. An option
parties.
in standardized contracts
c. is traded on an organized exchange or may be negotiated on a case-by-case basis between
counterparties.
7. A swap
parties.
in standardized contrasts
8. On September 1st of the current year, Mooney Company writes a contract agreeing to sell to Berry
Company 200,000 foreign currency (FC) units at a specific price of $2.14 per FC with delivery in 30 days. The
spot rate at the end of 30 days is $2.17. The appropriate discount rate for both Mooney Company and Berry
Company is 9%.
On the settlement of the contract, Mooney would record a

a. gain of $6,000.
b. gain of $5,955.
c. loss of $6,000.
d. loss of $5,955.
9. Jenson Company buys 20 contracts on the Chicago Board of Trade to receive October delivery
of soybeans to a certified warehouse. Each contract is in units of 3,000 bushels at a futures price of
$2.75 per bushel. The owner of the contract requires a margin account with an initial margin of $8,000,
with a maintenance margin of $6,000. What entry will Jenson Company make to establish the margin
account?
a. A memo entry to record acquisition of the contract which has no value at inception.
b. Futures contract - margin account 6,000
Cash 6,000
c. Futures contract - margin account 8,000
Cash 8,000
d. Futures contract - margin account 165,000
Cash 165,000
10.
10
. Clark Company holds several options:
Spot Price Strike Price
Call option on Ionics $29.80 $27.90
Call option on Kimberly 60.41 64.84
Put option on Motorola 14.25 16.40
Put option on Nortek 32.10 32.10
The intrinsic value of Clark Company's options is
a. $0.38.
b. $4.05.
c. $4.43.
d. $8.48.
11. On April 4, Alam Company purchased a call option on 10,000 bushels of corn with delivery on
June 30. The strike price is $2.15 per bushel. The value of the option and the market value of the corn
are as follows.
Value of the option Value of the corn
April 4 $1,830 $20,400
April 30 2,010 22,500
May 31 2,530 23,800
June 30 2,700 24,200
a. On April 4, the intrinsic value of the option is $1,100.

b. On April 30, the time value of the option is $1,010.
c. On May 31, the intrinsic value of the option is $230.
d. On June 30, the time value of the option is $2,700.
12.On May 1 of the current year, Orr Company purchases a call option on 15,000 bushels of corn with
delivery in July for a premium of $1,200 and a strike price of $3.05 per bushel. The values of the
option at the end of May and June are $1,125 and $1,007, respectively. The option is sold on July 7th
for $1,133. Orr Company prepares monthly financial statements.
a. On May 1, Orr Company records a memo entry to record acquisition of the contract which
has no value.
b. For May, Orr Company records a gain on the contract of $75.
c. For June, Orr Company records a loss of $193.
d. At the sale of the option contract on July 7, Orr Company records a gain of $126.
13.At the beginning of 20X5, a derivative loss associated with a forecasted purchase of equipment will
plus the expected cost of the equipment is $211,000. The fair value of the equipment is $199,000. The
equipment has a useful life of 5 years.
a. $12,000 should be included in Other Comprehensive Income in 20X5.

b. $2,400 should be included in Other Comprehensive Income each year from 20X5 to 20X9.
c. $12,000 should be included in Income in 20X5.
d. $2,400 should be included in Income each year from 20X5 to 20X9.
14.Under special accounting treatment for cash flow hedge of a forecasted transaction, the relationship
between the change in value of a derivative instrument and the change in value of the forecasted
transaction affects the amount of gain(loss) that should be in Other Comprehensive Income (OCI). If
the amount of gain on derivatives that is classified as OCI is $17,500 and the cumulative loss on the
remaining forecasted transaction is ($13,200), the amount of OCI to be reclassified as a component of
current earnings is
a. $4,300.
b. $13,200.
c. $17,500.
d. not applicable.
15.The best definition for direct quotes would be "direct quotes measure
a. how much foreign currency must be exchanged to receive 1 domestic currency."

b. current or spot rates."
c. how much domestic currency must be exchanged to receive 1 foreign currency."
d. exchange rates at a future point in time."
16. A U.S. company purchases medical lab equipment from a Japanese company. The Japanese
company requires payment in Japanese yen. In this transaction, the yen would be referred to as the
a. domestic currency for the U.S. company.
b. denominated currency.
c. purchasing currency.
d. selling currency.
17. A U.S. company that has purchased inventory from a German vendor would be exposed to a net
exchange gain on the unpaid balance if the
a. amount to be paid was denominated in dollars.
b. dollar weakened relative to the Euro and the Euro was the denominated currency.
c. dollar strengthened relative to the Euro and the Euro was the denominated currency.
d. U.S. company purchased a forward contract to buy Euros.
18. A U.S. company that has sold its product to a German firm would be exposed to a net exchange
gain on the unpaid receivable if the
19. A bank dealing in foreign currency tells you that the foreign currency will buy you P.80 Ph Peso
. The bank has given you
a. a direct quote.
b. an indirect quote.
c. the official (fixed) rate.
d. a forward rate.
20. When an economic transaction is denominated in a currency other than the entity's domestic
currency, the entity must establish a
a. domestic rate.
b. hedge rate.
c. rate of currency change.
d. rate of exchange.
21. A forward exchange contract is being transacted at a premium if the current forward rate is
a. less than the expected spot rate.
b. greater than the expected spot rate.
c. less than the current spot rate.
d. greater than the current spot rate.
22. Which of the following factors influences the spread between forward and spot rates?
a. which currency is denominated as the domestic currency
b. the length of the forward exchange contract
c. the current cross rate between the two currencies
d. all are factors that may influence the spread
23. Foreign currency transactions not involving a hedge should be accounted for using
a. the one-transaction method.
b. the two-transaction method.
c. a hybrid of the one- and two-transaction methods.
d. either the one- or the two-transaction method (allowed by the FASB).
24. A transaction involving foreign currency will most likely result in gains and losses to the
reporting entity if the
a. forward exchange contract is selling at a premium.
b. transaction is denominated and measured in the reporting entity's currency.
c. transaction takes place in a country with a tiered monetary system.
d. transaction is denominated in a foreign currency and measured in the reporting entity's
currency.
25. Given the following information for a 90 day contract:
US Dollars FC
Value Today 3,750 5,000
Interest Rate 4% 7%
3 months interest 37.50 87.50
Value in 3 months ?? ??
The spot rate today is 1 FC = .75
What will be the forward rate?

a. 1FC = .75 US Dollars
b. 1FC = .57 US Dollars
c. 1FC = .745 US Dollars
d. 1FC = .70 US Dollars
26.A U.S. firm has purchased, for 50,000 FCs, an electric generator from a foreign firm. The exchange
rates were 1 FC = $0.80 on the delivery date and 1 FC = $0.76 when the payable was paid. What is the
final recorded value if the two-transaction method is used?
a. $40,000
b. $38,000
c. $42,000
d. $50,000
27.A U.S. manufacturer has sold computer services to a foreign firm and received 200,000 foreign
currency units (FCs). The exchange rates were 1 FC = $.75 on the date of the sale and 1 FC = $.80
when the receivable was settled. On the transaction date, the settlement exchange rate is estimated to be
1 FC = $.72. By the settlement date, what is the total exchange gain or loss recorded for the transaction
if the two-transaction method is used?
a. $10,000 exchange gain
b. $6,000 exchange loss
c. $10,000 exchange loss
d. no gain or loss
28.A U.S. manufacturer has sold goods to a foreign firm for a sale price of 80,000 FC on 12/15/X1. The invoice
is due 1/15/X2. The U.S. Firm fiscal year is 12/31/X1. Given the following exchange rates, what gain or loss
would the U.S. firm record on 12/31?
12/15 1FC = $0.60 US Dollars

12/31 1FC = $0.65 US Dollars
1/15 1FC = $0.63 US Dollars
a. loss of $4,000
b. loss of $1,600
c. gain of $2,400
d. gain of $4,000
29. Which of the following does not represent an exchange risk on an exposed position to a company
transacting business with a foreign vendor?
a. transaction is denominated in foreign currency, settled at a future date

b. firm commitment to purchase inventory to be paid for in foreign currency
c. Forecasted foreign currency transaction with a high probability of occurrence
d. firm commitment to purchase inventory denominated in Philippine Pesos
330.On August 1, 20X1, an American firm purchased a machine costing 200,000,000 yen from a
Japanese firm to be paid for on October 1, 20X1. Also on August 1, 20X1, the American firm entered
into a contract to purchase 200,000,000 yen to be delivered on October 1, 20X1, at a forward rate of 1
Yen = P0.00783. The exchange rates were as follows:
Spot
August 1, 20X1 1 Yen = P0.00781
August 31, 20X1 1 Yen = P0.00777
October 1, 20X1 1 Yen = P0.00779
Which of the following statements is incorrect concerning the accounting treatment of these
transactions?
a. The machine's final recorded value was P1,558,000.
b. The beginning balance in the accounts payable was P1,562,000.
c. An exchange gain on the accounts payable of P4,000 was recognized on October 1, 20X1.
d. The value of the accounts payable just before payment, on October 1, 20X1, was
P1,558,000.
31. Scenario 10-1

On 6/1/X2, an American firm purchased a inventory costing 100,000 Canadian Dollars from a
Canadian firm to be paid for on 8/1/X2. Also on 6/1/X2, the American firm entered into a forward
contract to purchase 100,000 Canadian dollars for delivery on 8/1/X2. The exchange rates were as
follows:
Spot Forward
6/1/X2 1 CD = $0.73 1 CD = $0.74
6/30/X2 1 CD = $0.70 1 CD = $0.75
8/1/X2 1 CD = $0.68 1 CD = $0.68
The American firms fiscal year end is 6/30/X2. The changes in the value of the forward contract should be
discounted at 8%.
Refer to Scenario 10-1. What is the value of the Forward Contract Receivable-FC on 6/1/X2?
a. $73,000
b. $74,000
c. $68,000
d. $70,000
32. Refer to Scenario 10-1. What is the value of the Forward Contract Receivable-FC on 6/30/X2?
a. $75,000
b. $75,693
c. $74,693
d. $74,993
33.The purpose of a hedge on an identifiable commitment where the Phil company is selling goods is
to:
a. fix the basis of sales revenue to the date of the commitment

b. eliminate all exchange gains/losses from the date of commitment to the date of settlement
c. fix the basis of cost of goods sold to the date of commitment
d. eliminate any exchange gains/losses from the transaction date to the settlement date
34.A swap
parties.
Scenario 10-2
On 4/1/X3, a U.S. Company commits to sell a piece of equipment to a French customer. At that time,
the U.S. company enters into a forward contract to sell foreign currency on 8/1/X3 (120 days). Delivery
will take place 7/1/X3 with payment due on 8/1/X3. The fiscal year end for the company is 6/30/X3.
The sales price of the equipment is 200,000 Euros. Various exchange rates are as follows:
Spot Forward
4/1/X3 1FC = $0.60 1FC = $0.58
6/30/X3 and 7/1/X3 1FC = $0.58 1FC = $0.56
8/1/X3 1FC = $0.55 1FC = $0.55
Discount rate is 12%.
35. Refer to Scenario 10-2. What is the amount in the Firm Commitment account on 6/30/X3?
a. 4,000 debit
b. 8,000 debit
c. 4,000 credit
d. 10,000 credit
36. Refer to Scenario 10-2. What is the value of Forward Contract Payable-FC on 6/30?
a. 112,000
b. 112,040
c. 116,000
d. none of the above
37. The time value of an option is the difference between the
a. premium paid and its current rate.

b. premium paid and its intrinsic value.
c. exercise price and its current rate.
d. call option price and the put option price.
38.The two distinguishing characteristics of a financial instrument are
a. one or more options and one or more exchange rates.
b. one or more underlyings and one or more notional amounts.
c. cash flows and economic exchange.
d. a per share price and a quantity.
39. Hugh, Inc. purchased merchandise for 300,000 FC from a British vendor on November 30,
20X3. Payment in British pounds is due January 31, 20X4. Exchange rates to purchase 1 FC is as
follows:
Nov. 30, 20X3 Dec. 31, 20X3

Spot $1.65 $1.62
30 day $1.64 $1.59
60 day $1.63 $1.56
In the December 31, 20X3 income statement, what amount should Hugh report as foreign exchange
gain from this transaction?
a. $12,000
b. $9,000
c. $6,000
d. $0
40.Wild, Inc. sold merchandise for 500,000 FC to a foreign vendor on November 30, 20X5. Payment in
foreign currency is due January 31, 20X6. Exchange rates to purchase 1 foreign currency unit are as
follows:
Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Spot $1.49 $1.45 $1.44
30 day $1.48 $1.43 $1.43
60 day $1.46 $1.41 $1.42
In the year in which the sale was made, 20X5, what amount should Wild report as foreign exchange
gain/loss from this transaction?
a. $25,000
b. $20,000
c. $5,000
d. $0
41. Both forward contracts and futures contracts provide for the receipt or payment of a specific amount of an
asset at a specific price with delivery at a specified future point in time. Which combination of characteristics is
true for a futures contract?
Subject to Subject to
margin call discounting
a. No No
b. No Yes
c. Yes No
d. Yes Yes
42.. Pile, Inc. purchased merchandise for 500,000 FC from a foreign vendor on November 30, 20X5. Payment
in foreign currency is due January 31, 20X6. On the same day, Pile signed an agreement with a foreign exchange
broker to buy 500,000 FC on January 31, 20X6. Exchange rates to purchase 1 FC are as follows:
Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Spot $1.49 $1.45 $1.44
30 day $1.48 $1.43 $1.43
60 day $1.46 $1.41 $1.42
What will be the adjustment to the account payable included in the journal entry record on November
30, 20X5?
a. $20,000 debit
b. $20,000 credit
c. $30,000 debit
d. $0
43.Larson, Inc. sold merchandise for 600,000 FC to a foreign vendor on November 30, 20X5. Payment in
foreign currency is due January 31, 20X6. On the same day, Larson signed an agreement with a foreign
exchange broker to sell 600,000 FC on January 31, 20X6. Exchange rates to purchase 1 FC are as follows:
Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Spot $1.49 $1.46 $1.43
30 day $1.48 $1.43 $1.44
60 day $1.47 $1.40 $1.42
What will be the amount of the Forward Contract Receivable-Dollars on November 30, 20X5?
a. $894,000
b. $888,000
c. $882,000
d. $858,000
44. Happ, Inc. agreed to purchase merchandise from a British vendor on November 30, 20X3. The goods will
arrive on January 31, 20X4 and payment of 100,000 British pounds is due February 28, 20X4. On November 30,
20X3, Happ signed an agreement with a foreign exchange broker to buy 100,000 British pounds on February 28,
20X4. Exchange rates to purchase 1 British pound are as follows:
Nov. 30, 20X3 Dec. 31, 20X3 Jan. 31, 20X4 Feb. 28, 20X4
Spot $1.65 $1.62 $1.59 $1.57
30 day $1.64 $1.59 $1.60 $1.59
60 day $1.63 $1.56 $1.58 $1.58
Because of this commitment hedge, Happ, Inc. will record the merchandise at what value when it
arrives in January?
a. $165,000
b. $164,000
c. $160,000
d. $159,000
45.Rhante is a German company wholly owned by a U.S. firm. Its inventory is valued at the lower of
cost or market, with cost being measured by the average cost method. Purchases of inventory occur
evenly throughout the period. In 2005 Rhante's ending inventory was 50,000 euros at cost and 48,000
euros at market. Assume the following exchange rates:
Jan. 1, 2005 1 euro = $1.40 U.S.

Dec. 31, 2005 1 euro = $1.53 U.S.
2005 average 1 euro = $1.45 U.S.
Refer to Scenario 11-1. Determine the translated value of Rhante's inventory to be included in the
consolidated balance sheet for the U.S. parent given Rhante's functional currency is the euro.
a. $73,440
b. $76,500
c. $69,600
d. $72,500
446. Sharp Company owns a Japanese subsidiary. On October 15, 20X5, when the rate of exchange
was 121 yen to $1, the Japanese subsidiary declared and paid a dividend to Sharp of 24,000,000 yen.
The dividend represented the net income of the foreign subsidiary for the six months ended June 30,
20X5, during which time the weighted average of exchange rates was 125 yen to $1. The rate of
exchange in effect at December 31, 20X5, was 135 yen to $1. What rate of exchange should be used to
translate the dividend for the December 31, 20X5 financial statements?
a. 121 yen to $1
b. 125 yen to $1
c. 135 yen to $1
d. 128 yen to $1
47.Alice makes a cash gift which has no strings attached to a political party. It is recorded as:
a. An Endowment.
b. Revenue-Unrestricted contribution.
c. Revenue-Temporarily Restricted Contribution.
d. An increase in the fund balance of the General Fund.
48.Atlee makes a cash gift to a not-for-profit local ballet company which is designated by the donor to
buy costumes for a new ballet staging. It should be accounted for with the following journal entry:
a. Cash XXX
Revenue-Unrestricted Contribution XXX
b. Cash XXX
Revenue-Temporarily Restricted Contribution XXX
c. Cash XXX
Revenue-Endowment Fund XXX
d. Cash XXX
Revenue-Permanently Restricted XXX
49. A major corporation makes a donation of $10,000,000 to the local art museum foundation for
the construction of a new art museum provided the community can match the $10,000,000 with other
donations. This is an example of a(n):
a. Unconditional Pledge
b. Unrestricted Contribution
c. Conditional Pledge
d. Endowment
5
50.. A family lost its home in a recent fire. On December26, 2009. a philanthropist sent money to a
nonprofits benevolent organization to purchase furniture for the family. During 2010, the organization
purchased this furniture for the family. How should this receipt of money be reported by the organization in
its 2009 financial statements?
a. As an unrestricted contribution
b. As a temporarily restricted contribution
c.As a permanently restricted contribution
d.As a liabilities
51. Agency CCC had obligation for Personnel Services (PS) amounting to P300,000 for the month of
February, the entry would be:
a. No entry
b. Memorandum entry in Registry of Allotments and Obligations for PS (RAOPS)
c. Appropriations Alloted ........................................ 300,000
Obligations Incurred ...................................... 300,000
d. Cash-Disbursing Officer ...................................... 300,000
Cash-National Treasury ................................. 300,000
52.Agency III establish a petty cash fund for Maintenance and Other Operating expenses (MOOE)
amounting to P10,000. Agency III recieved a request for replenishment of petty cash fund for the
following expenses:
Office Supplies ............................................................. P500
Transportation fares ..................................................... 100
Repair of aircon ............................................................ 200
JRS mail ....................................................................... 160
Total .............................................................................. P960
The entry for the replenishment transaction would be:

a. Noentry.
b. Memorandum entry to the RAOMO
c. Office Supplies Expense ........................................ 500
Travelling Expense ................................................ 100
Repairs and Maintenance ....................................... 200
OtherMaintenance and Operating Expense ............ 160
Cash, National Treasury MDS ........................... 960
d. Office Supplies Expense ........................................ 500
Travelling Expense ................................................. 100
Petty Cash fund ................................................ 960
53.Agency KKK have an obligation for equipment per purchase order amounting to P200,000. The
entry for this transaction would be:
a. Office Equipment ................................................... 200,000
Accounts Payable ............................................. 200,000
b. Office Equipment ................................................... 200,000
Cash-National Treasury, MDS ........................... 200,000
c. Office Equipment ................................................... 200,000
Subsidy Income from National Government 200,000
d. Memorandum entry in RAOCO.
54.Using the same information in No. 3, Agency KKK recieved the office equipment based on
invoice/delivery receipt. The entry for this transaction would be: (ignore tax implication)
a. Office Equipment ................................................... 200,000
b. Office Equipment ................................................... 200,000
c. Office Equipment ................................................... 200,000
d. Memorandum entry in RAOCO.
55.Agency MMM have an obligation for building upon signing of contract amounting to P10,000,000.
The entry to record this transaction would be:
a. No Entry
b. Memorandum entry in RAOCO.
c. Appropriations Alloted ........................................... 10,000,000
Obligations Incurred ......................................... 10,000,000
d. Building .................................................................. 10,000,000
Accounts Payable ............................................. 10,000,000
56.What is the entry to record the collection of a P15,000,000 corporate income taxes by the BIR in its
agency books?
a. Memo entry
b. Cash Collecting Officer .............................................. 15,000,000
Income Tax – Corporation .................................... 15,000,000
c. Cash-National Treasury, MDS .................................... 15,000,000
d. Income Tax – Corporation .......................................... 15,000,000
Cash Collecting Officer ........................................ 15,000,000
57.What is the entry on the Agency books to record BIR's remittance of the same collection to the Btr?
a. Memo entry
b. Cash Collecting Officer .............................................. 15,000,000
c. Cash-National Treasury, MDS .................................... 15,000,000
d. Income Tax – Corporation .......................................... 15,000,000
58.Agency ABC sold a 50% depreciated motor vehicle which had an original cost of P300,000 for
P200,000. The proceeds shall be deemed automatically appropriated for the purchase of replacement
higher capacity vehicle worth P500,000, net of applicable tax. The agency subsequently received a
NCA of P500,000 for the purchase of the said vehicle. What is the entry to record the receipt from the
disposal of the motor vehicle?
a. Cash – Collecting Offiicer ......................................... 200,000
Due to Btr ............................................................ 200,000
b. Cash – Collecting Offiicer ......................................... 200,000
Gain on Sale of Disposed Assets ......................... 200,000
c. Cash – Collecting Offiicer ......................................... 200,000
Accumulated Depreciation – Vehicle ........................ 150,000
Motor Vehicle ...................................................... 300,000
d. Cash – Collecting Offiicer ......................................... 200,000
Accumulated Depreciation – Vehicle ......................... 150,000
Motor Vehicle ....................................................... 300,000
Due to Btr ............................................................. 50,000
59.Using the information in number 8, what is the entry to record remittance of the collection to the
Btr, if any.
a. No necessary entry, since there is no need to remit the collection to the Btr.
b. Gain on Sale of Diposed Assets ................................. 50,000
Government Equity .................................................... 150,000
Cash – Collection Offiicer .................................... 200,000
c. Due to Btr ................................................................... 200,000
d. Subsidy Income from National Government 200,000
60.Using the information in number 8, what is the entry to record the receipt of the NCA for the
purchase of new motor vehicle?
a. Memo entry
b. Cash-National Treasury, MDS .................................... 300,000
c. Cash-National Treasury, MDS .................................... 450,000
d. Cash-National Treasury, MDS .................................... 500,000
61.During 2003, an alumnus of Smith College, a private not-for-profit college,
transferred $100,000 to the college with the stipulation that it be spent for library
acquisitions. However, the alumnus specified that none of the cash transferred
could be spent until the college had matched the entire amount transferred with
donations from other alumni by December 31, 2004. As of December 31, 2003,
the college had received matching cash donations of only $5,000 from other
alumni, and the college estimated that it was reasonably possible that it would
not reach the goal of $100,000 by December 31, 2004. If the funds are not
matched by December 31, 2004, the cash will be returned to the alumnus.
On the college’s statement of financial position at December 31, 2003, the cash
transfer of $100,000 would be included in the amount reported for
a. Liabilities. b. Unrestricted net assets. c. Temporarily restricted net assets. d.
Permanently restricted net assets.
62. During the year ended December 31, 2003, a not-forprofit performing arts
entity received the following donorrestricted contribution and investment income:
I. Cash contribution of $100,000 to be permanently invested.
II. Cash dividends and interest of $6,000 to be used for the acquisition of theater
equipment.
As a result of these cash receipts, the statement of cash flows for the year ended
December 31, 2003, would report an increase of
a. $106,000 from operating activities. b. $106,000 from financing activities.
c. $6,000 from operating activities and an increase of $100,000 from financing
activities.
d. $100,000 from operating activities and an increase of $6,000 from financing
activities.
63. Sea Lion Park, a private not-for-profit zoological society, received contributions restricted for
research totaling
$50,000 in 2003. None of the contributions were spent on research in 2003. In 2004, $35,000 of the
contributions
were used to support the research activities of the society. The net effect on the statement of activities
for the year ended December 31, 2004, for Sea Lion Park would be a
a. $15,000 increase in temporarily restricted net assets.
b. $35,000 decrease in temporarily restricted net assets.
c.$35,000 increase in unrestricted net assets.
d. $35,000 decrease in unrestricted net assets.
64. Clara Hospital, a private not-for-profit hospital, earned $250,000 of gift shop revenues and spent
$50,000 on research
during the year ended December 31, 2003. The $50,000 spent on research was part of a $75,000
contribution received during December of 2002 from a donor who stipulated that the donation be used
for medical research. Assume none of the gift shop revenues were spent in 2003. For the year ended
December 31, 2003, what was the increase in unrestricted net assets from the events occurring during
2003?
a. $300,000 b. $200,000 c. $250,000 d. $275,000
65. Which of the following transactions of a private notfor- profit voluntary health and welfare
organization would increase temporarily restricted net assets on the statement of activities for the year
ended June 30, 2003?
I. Received a contribution of $10,000 from a donor on May 15, 2003, who stipulated that the donation
not be spent until August of 2003.
II. Spent $25,000 for fund-raising on June 20, 2003. The amount expended came from a $25,000
contribution on March 12, 2003. The donor stipulated that the contribution be used for fund-raising
activities.
a. Both I and II. b. Neither I nor II. c. I only. d. II only.
66. Catherine College, a private not-for-profit college, received the following contributions during
2003:
I. $5,000,000 from alumni for construction of a new wing on the science building to be constructed in
2003.
II. $1,000,000 from a donor who stipulated that the contribution be invested indefinitely and that the
earnings be used for scholarships. As of December 31, 2003, earnings from investments amounted to
$50,000.
For the year ended December 31, 2003, what amount of these contributions should be reported as
temporarily restricted revenues on the statement of activities?
a. $ 50,000 b. $5,050,000 c. $5,000,000 d. $6,050,000
67. PJD Enterprises, a franchisor charges franchisees a “franchise fee” of P500,000. Of this amount, a
non-refundable P200,000 is paid upon the signing of the contract with the balance payable in three
equal annual installments after each year thereafter starting 2012; PJD will assist in locating a suitable
business site, conduct a market study, oversee the construction of facilities, and provide initial training
for employees.
On October 1, 2011, PJD entered into a franchising agreement to cover an entirely new and untested
area. By december 31, 2011, PJD has substantially completed and rendered appropriate services at a
total cosr of P150,000, but has somehow, has raised some doubts on the collectibility of the balance of
the franchise fee. In its 2011 income statement, PJD Enterprises should recognize a profit of:
A.P50,000 B. P140,000 C. P200,000 D. P350,000

68. Ruby Company charges new franchisees an initial fee of P2,500,000. Of this amount, P1,000,000 is
payable in cash when the agreement is signed, and the remainder is to be paid in three annual
installments, which are evidenced by an interest bearing promissory notes. In consideration therefore,
Ruby Company will assist in locating the business site, conduct a market study to estimate the earnings
potential, supervise construction of a building, and provide initial training to employees.
On December 31, 2011, Ruby Company entered into a franchise agreement with Jade, Inc. by the end
of the year. Ruby Company has completed about 25% of the initial services at a cost of P150,000 and it
has ascertained that collection of the notes is reasonably assured. For 2011, Ruby Company should
recognize franchise revenue of:
A.P0 B. P850,000 C. P1,000,000 D.P2,500,000
69. On January 2, 2009, SD Company signed an agreement to operate as a franchisee of TQ Products,

Icn., for an initial franchise fee of P937,500 for 7 years. Of this amount, P175,000 was paid when the
agreement was signed and the balance payable in four annual payments beginning on December 31,
2009 . SD signed a non interest bearing note for the balance. SD's rating indicates that he can borrow
money at 16% for the loan of this type. Assume that substantial services amounting to P283,500 had
already been rendered by TQ Products and that additional indirect franchise cost of P25,500 was also
incurrred. PV factor is 2.80
If the collection of the note is not reasonably assured, the net income for the year ended December 31,
2009 is
A. P313,435 B. P228,035 C. P168,135 D.P253,535
70. oN November 30, 2009, Loveless Company authorized NBSB Corp. to operate as a frachisee for an
initial franchise fee of P1,950,000. Of this amount, P750,000 was received upon signing the agreement
and the balance, represented by a note, is due in four annual payments starting November 30, 2010. PV
of P1 at 12% for 4 periods is .06355.Present Value of an ordinary annuity of P1 at 12% for 4 periods is
3.0374 The period of refund will elapsed on January 31, 2010. The franchisor has performed
substantially all of the initial services but the operations of the store have yet to start. Collectibility of
the note is reasonably certain. How much is the unearned franchise fee on the year ended December 31,
2009?
A. P1,661,220 B.P750,000 C.P911,220 D, P0
71. Forever, Inc granted a franchise to Hopeless Romantic for the Manila area. The franchisee was to
pay a franchise fee of P250000, payable in five equal installments starting with the payment upon
signing of the agreement. The franchise was to pay monthly 3% of gross sales of the preceding month.
Should the operations of the outlet prove to be unprofitable, the franchise may be cancelled with
whatever obligations owing Forever, Inc. in connection with the P250,000 franchise fee waived. The
prevailing interest rate for a non- interest bearing note is 14%. The first year generated a gross sales of
P1,250,000. What is the amount of unearned franchise fee after the first year of operations?
A.P287,500 B.P145700 C. P195,700 D.P250,000
72. AAA,Inc.awarded its franchise for Davao City to Savory Foods for a total fee of P250,000 , payable
P50,000 at the time the contract is signed and the balance in two equal installments after each year
following the signing date. The agreement was signed at the beginning of 2008 and it provided among
others, that in the event the first year of operations prove to be uncollectible the franchise agreement
may be voided with no need for the franchisor to return any amount already paid nor the franchisee to
pay any balance still unpaid. Indeed, the first year proved to be unprofitable . In 2008 AAA, Inc. would
report franchise fee revenue of :
A. P0 C. P150,000
B P50,000 D. P250,000
73. On December 29,2008, Fiesta Hat signed a franchising agreement for the operation of an outlet in
Dagupan City by Sombrero Company. The franchising agreement required the franchisee, Sombrero
Company to make an initial payment of P200,000 upon signing of the contract and three payments each
of P100,000 beginning one year from the agreement date and yearly thereafter. The franchisor agrees to
make market studies, find a suitable location, train employees and perform some other related services.
The initial payment is refundable until substantial performance is effected. At the end of 2008 , Fiesta
Hat should report franchise fee revenue of:
A. P0 C. P200,000
B. P125,000 D. P500,000
74. Tam's Pizza, Inc, charges an initial franchise fee of P50,000 for the right to operate as a franchisee
of Tam's Pizza. Of this amount, P10,000 is payable when the agreement was signed and the balance is
payable in five annual payment of P8,000 each. In return for the initial frachise fee, the franchiser will
help locate the site, negotiate with the lease or purchase of the site, supervise the construction acitvity,
and provide the bookkeeping services. The credit rating of the franchisee indicates that money can be
borrowed at 8%. The present value of an ordinary annuity of five receipts of P8,000 each discounted at
8% is P31,941.68
If the initial downpayment is not refundable and no future services are required by the franchiser, but
collection of the note is so uncertain that recognition of the note as an asset is unwarranted, the entry
should be:
A. Cash 10,000
Notes Receivable 40,000
Discount on Notes Receivable 8,058.32
Unearned Franchise Fees 41,941.68
B. Cash 10,000
Discount on Notes Receivable 8058.32
Revenue from Franchise Fees 41,941.68
C. Cash 10,000
Revenue from Franchise Fee 10000
D. Cash 10,000
Unearned Franchise Fees 10,000
75. On April 1, 2004, Motorola, Inc. entered into a franchise agreement with a local businessman. The
franchisee paid P45,000 and gavea P30,000, 8%, 3 year notes payable with interest due annually on
March 31. Motorola recorded the P75,000 initial franchise fee as revenue on April 1, 2004 . On
December 30, 2004 , the franchisee's note and refunded P24,000 less accrued interest on the note of the
P45,000 paid on April 1. What entry should Motorola make on December 30, 2004?
A. Loss on Repossessed Franchise P24,000
Cash P24,000
B. Loss on Reposessed Franchise P22,200

Cash P22,200
C. Loss on Reposessed Franchise P52,200

Cash P22,200
D. Revenue from Franchise Fees P75,000

Interest Income P1800
Cash 22,200
Revenue from Reposessed Franchise 21,000
Prepared by: Sir Stan

Don't do nothing because you feel you can only do
little, do what you can.
Your future depends on many things, but mostly on

you
It is not who is right, but what is right, that is

important

Start right…
Fax No. (078) 844-0889

Set A

1.ANS: B DIF: E OBJ: Module-1
2.ANS:D DIF: E OBJ: Module-1
3.ANS:A DIF: E OBJ: Module-1
4.ANS:A DIF: E OBJ: Module-2
5.ANS:C DIF: E OBJ: Module-2
6.ANS: C DIF: E OBJ: Module-2
7.ANS: A DIF: E OBJ: Module-2 | Module-5
8.ANS: C DIF: M OBJ: Module-3
9.ANS: B DIF: M OBJ: Module-3

10.
10ANS: B DIF: M OBJ: Module-4

To determine strike price, it should be “inthe money”
Call option= CP>SP
Put Option= CP<SP
11.ANS: B DIF: D OBJ: Module-4

Call Option:
22500/10000=22.5 CP > 2.15 SP= Intrinsic Value=.1x 10000=1000
Time value= Option Value- Intrinsic Value=1010
12.ANS: D DIF: M OBJ: Module-4
13.ANS: C DIF: D OBJ: Module-8
14.ANS: A DIF: D OBJ: Module-8
15.ANS: C DIF: E OBJ: 10-2
16.ANS: B DIF: M OBJ: 10-2
17.ANS: C DIF: M OBJ: 10-2
19.ANS: A DIF: E OBJ: 10-2
20.ANS: D DIF: E OBJ: 10-2

21.ANS: D DIF: M OBJ: 10-2
23.ANS: B DIF: E OBJ: 10-3
25.ANS: C
US Value in 3 months = 3,750 + 37.50 = 3,787.50
FC Value in 3 months = 5,000 + 87.50 = 5,087.50
Fwd rate 3,787.50 ÷ 5,087.50 = .745
DIF: D OBJ: 10-2
26.ANS: A DIF: M OBJ: 10-3
29.ANS: D DIF: E OBJ: 10-4
330.ANS: A DIF: M OBJ: 10-3 | 10-5
31.ANS: B DIF: D OBJ: 10-5
32. ANS: D
Original value of Forward Contract Receivable-FC 100,000  .74 = 74,000
Current (6/30) value of the Fwd Contract Rec-FC 100,000  .75 = 75,000
Increase in value of Forward Contract Receivable 1,000
Value of Receivable, discounted at 8%, n 1 1,000 - (1,000  [.08 ÷ 12]) = 993
Value of receivable 74,000 + 993 = 74,993
DIF: D OBJ: 10-5
34.A
35. ANS: C
On 4/1:
Forward Contract Receivable - Dollars 116,000
Forward Contract Payable-FC 116,000
On 6/30, fiscal year end, the value of the commitment has changed.
4/1 200,000  .60 = 120,000 value of the sales revenue
6/30 200,000  .58 = 116,000 value of the sale revenue
Loss on commitment (debit) results in a credit to Firm Commitment
DIF: D OBJ: 10-5
36.ANS: B
Fwd value 4/1 200,000  0.58 116,000
Fwd value 6/30 200,000  0.56 112,000
Decrease in Fair Value of Payable 4,000
PV of change: 4,000 ÷ 1.01 3,960
[n 1; i (.12 ÷ 12) = .01]
Current value of fwd contract = 116,000 - 3,960 = 112,040
DIF: D OBJ: 10-5
41.C
43.ANS: C DIF: D OBJ: 10-5
45.ANS: A DIF: D OBJ: 11-5
47.ANS: B DIF: E OBJ: 18-4
49.ANS: C DIF: E OBJ: 18-4 .

5
50..answer:D
51. B
52.C
53.D
54.D
55.B
56.B
57.D
58.C
59.B
60.D
61.Answer: A
62.Answer: B
63.Ans:B
64.Ans: C
65.Ans C
66.Ans: B
67. Answer: B 500-150=350x70=140
68. Answer:2.5m D
69. ANSWER: P 228,035
70. Answer: P1661220
71. Answer: P145700
72. Answer: B
73. Answer: P0
74. Answer: C
75. Answer: D
Start right…
Fax No. (078) 844-0889

Set B
1. Scenario 10-1
On 6/1/X2, an American firm purchased a inventory costing 100,000 Canadian Dollars from a
Canadian firm to be paid for on 8/1/X2. Also on 6/1/X2, the American firm entered into a forward
contract to purchase 100,000 Canadian dollars for delivery on 8/1/X2. The exchange rates were as
follows:
Spot Forward
6/1/X2 1 CD = $0.73 1 CD = $0.74
6/30/X2 1 CD = $0.70 1 CD = $0.75
8/1/X2 1 CD = $0.68 1 CD = $0.68
The American firms fiscal year end is 6/30/X2. The changes in the value of the forward contract should be
discounted at 8%.
Refer to Scenario 10-1. What is the value of the Forward Contract Receivable-FC on 6/1/X2?
a. $73,000
b. $74,000
c. $68,000
d. $70,000
2. Refer to Scenario 10-1. What is the value of the Forward Contract Receivable-FC on 6/30/X2?
a. $75,000
b. $75,693
c. $74,693
d. $74,993
3.The purpose of a hedge on an identifiable commitment where the Phil company is selling goods is to:
a. fix the basis of sales revenue to the date of the commitment

b. eliminate all exchange gains/losses from the date of commitment to the date of settlement
c. fix the basis of cost of goods sold to the date of commitment
d. eliminate any exchange gains/losses from the transaction date to the settlement date
4.A swap
parties.
Scenario 10-2
On 4/1/X3, a U.S. Company commits to sell a piece of equipment to a French customer. At that time,
the U.S. company enters into a forward contract to sell foreign currency on 8/1/X3 (120 days). Delivery
will take place 7/1/X3 with payment due on 8/1/X3. The fiscal year end for the company is 6/30/X3.
The sales price of the equipment is 200,000 Euros. Various exchange rates are as follows:
Spot Forward
4/1/X3 1FC = $0.60 1FC = $0.58
6/30/X3 and 7/1/X3 1FC = $0.58 1FC = $0.56
8/1/X3 1FC = $0.55 1FC = $0.55
Discount rate is 12%.
5. Refer to Scenario 10-2. What is the amount in the Firm Commitment account on 6/30/X3?
a. 4,000 debit
b. 8,000 debit
c. 4,000 credit
d. 10,000 credit
6. Refer to Scenario 10-2. What is the value of Forward Contract Payable-FC on 6/30?
a. 112,000
b. 112,040
c. 116,000
d. none of the above
7. The time value of an option is the difference between the
a. premium paid and its current rate.

b. premium paid and its intrinsic value.
c. exercise price and its current rate.
d. call option price and the put option price.
8.The two distinguishing characteristics of a financial instrument are

a. one or more options and one or more exchange rates.
b. one or more underlyings and one or more notional amounts.
c. cash flows and economic exchange.
d. a per share price and a quantity.
9. Hugh, Inc. purchased merchandise for 300,000 FC from a British vendor on November 30,
20X3. Payment in British pounds is due January 31, 20X4. Exchange rates to purchase 1 FC is as
follows:
Nov. 30, 20X3 Dec. 31, 20X3

Spot $1.65 $1.62
30 day $1.64 $1.59
60 day $1.63 $1.56
In the December 31, 20X3 income statement, what amount should Hugh report as foreign exchange
gain from this transaction?
a. $12,000
b. $9,000
c. $6,000
d. $0
10.Wild, Inc. sold merchandise for 500,000 FC to a foreign vendor on November 30, 20X5. Payment in
foreign currency is due January 31, 20X6. Exchange rates to purchase 1 foreign currency unit are as
follows:
Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Spot $1.49 $1.45 $1.44
30 day $1.48 $1.43 $1.43
60 day $1.46 $1.41 $1.42
In the year in which the sale was made, 20X5, what amount should Wild report as foreign exchange
gain/loss from this transaction?
a. $25,000
b. $20,000
c. $5,000
d. $0
11. Both forward contracts and futures contracts provide for the receipt or payment of a specific amount of an
asset at a specific price with delivery at a specified future point in time. Which combination of characteristics is
true for a futures contract?
Subject to Subject to
margin call discounting
a. No No
b. No Yes
c. Yes No
d. Yes Yes
12.. Pile, Inc. purchased merchandise for 500,000 FC from a foreign vendor on November 30, 20X5. Payment
in foreign currency is due January 31, 20X6. On the same day, Pile signed an agreement with a foreign exchange
broker to buy 500,000 FC on January 31, 20X6. Exchange rates to purchase 1 FC are as follows:
Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Spot $1.49 $1.45 $1.44
30 day $1.48 $1.43 $1.43
60 day $1.46 $1.41 $1.42
What will be the adjustment to the account payable included in the journal entry record on November
30, 20X5?
a. $20,000 debit
b. $20,000 credit
c. $30,000 debit
d. $0
13.Larson, Inc. sold merchandise for 600,000 FC to a foreign vendor on November 30, 20X5. Payment in
foreign currency is due January 31, 20X6. On the same day, Larson signed an agreement with a foreign
exchange broker to sell 600,000 FC on January 31, 20X6. Exchange rates to purchase 1 FC are as follows:
Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Spot $1.49 $1.46 $1.43
30 day $1.48 $1.43 $1.44
60 day $1.47 $1.40 $1.42
What will be the amount of the Forward Contract Receivable-Dollars on November 30, 20X5?
a. $894,000
b. $888,000
c. $882,000
d. $858,000
14. Happ, Inc. agreed to purchase merchandise from a British vendor on November 30, 20X3. The goods will
arrive on January 31, 20X4 and payment of 100,000 British pounds is due February 28, 20X4. On November 30,
20X3, Happ signed an agreement with a foreign exchange broker to buy 100,000 British pounds on February 28,
20X4. Exchange rates to purchase 1 British pound are as follows:
Nov. 30, 20X3 Dec. 31, 20X3 Jan. 31, 20X4 Feb. 28, 20X4
Spot $1.65 $1.62 $1.59 $1.57
30 day $1.64 $1.59 $1.60 $1.59
60 day $1.63 $1.56 $1.58 $1.58
Because of this commitment hedge, Happ, Inc. will record the merchandise at what value when it
arrives in January?
a. $165,000
b. $164,000
c. $160,000
d. $159,000
15.Rhante is a German company wholly owned by a U.S. firm. Its inventory is valued at the lower of
cost or market, with cost being measured by the average cost method. Purchases of inventory occur
evenly throughout the period. In 2005 Rhante's ending inventory was 50,000 euros at cost and 48,000
euros at market. Assume the following exchange rates:
Jan. 1, 2005 1 euro = $1.40 U.S.

Dec. 31, 2005 1 euro = $1.53 U.S.
2005 average 1 euro = $1.45 U.S.
Refer to Scenario 11-1. Determine the translated value of Rhante's inventory to be included in the
consolidated balance sheet for the U.S. parent given Rhante's functional currency is the euro.
a. $73,440
b. $76,500
c. $69,600
d. $72,500
16. Sharp Company owns a Japanese subsidiary. On October 15, 20X5, when the rate of exchange
was 121 yen to $1, the Japanese subsidiary declared and paid a dividend to Sharp of 24,000,000 yen.
The dividend represented the net income of the foreign subsidiary for the six months ended June 30,
20X5, during which time the weighted average of exchange rates was 125 yen to $1. The rate of
exchange in effect at December 31, 20X5, was 135 yen to $1. What rate of exchange should be used to
translate the dividend for the December 31, 20X5 financial statements?
a. 121 yen to $1
b. 125 yen to $1
c. 135 yen to $1
d. 128 yen to $1
17.Alice makes a cash gift which has no strings attached to a political party. It is recorded as:
a. An Endowment.
b. Revenue-Unrestricted contribution.
c. Revenue-Temporarily Restricted Contribution.
d. An increase in the fund balance of the General Fund.
18.Atlee makes a cash gift to a not-for-profit local ballet company which is designated by the donor to
buy costumes for a new ballet staging. It should be accounted for with the following journal entry:
a. Cash XXX
Revenue-Unrestricted Contribution XXX
b. Cash XXX
Revenue-Temporarily Restricted Contribution XXX
c. Cash XXX
Revenue-Endowment Fund XXX
d. Cash XXX
Revenue-Permanently Restricted XXX
19. A major corporation makes a donation of $10,000,000 to the local art museum foundation for
the construction of a new art museum provided the community can match the $10,000,000 with other
donations. This is an example of a(n):
a. Unconditional Pledge
b. Unrestricted Contribution
c. Conditional Pledge
d. Endowment
5
20.. A family lost its home in a recent fire. On December26, 2009. a philanthropist sent money to a
nonprofits benevolent organization to purchase furniture for the family. During 2010, the organization
purchased this furniture for the family. How should this receipt of money be reported by the organization in
its 2009 financial statements?
a. As an unrestricted contribution
b. As a temporarily restricted contribution
c.As a permanently restricted contribution
d.As a liabilities
21. Agency CCC had obligation for Personnel Services (PS) amounting to P300,000 for the month of
February, the entry would be:
e. No entry
f. Memorandum entry in Registry of Allotments and Obligations for PS (RAOPS)
g. Appropriations Alloted ........................................ 300,000
Obligations Incurred ...................................... 300,000
h. Cash-Disbursing Officer ...................................... 300,000
Cash-National Treasury ................................. 300,000
22.Agency III establish a petty cash fund for Maintenance and Other Operating expenses (MOOE)
amounting to P10,000. Agency III recieved a request for replenishment of petty cash fund for the
following expenses:
Office Supplies ............................................................. P500
Transportation fares ..................................................... 100
Repair of aircon ............................................................ 200
JRS mail ....................................................................... 160
Total .............................................................................. P960
The entry for the replenishment transaction would be:

e. Noentry.
f. Memorandum entry to the RAOMO
g. Office Supplies Expense ........................................ 500
Travelling Expense ................................................ 100
Cash, National Treasury MDS ........................... 960
h. Office Supplies Expense ........................................ 500
Travelling Expense ................................................. 100
Petty Cash fund ................................................ 960
23.Agency KKK have an obligation for equipment per purchase order amounting to P200,000. The
entry for this transaction would be:
e. Office Equipment ................................................... 200,000
f. Office Equipment ................................................... 200,000
g. Office Equipment ................................................... 200,000
h. Memorandum entry in RAOCO.
24.Using the same information in No. 3, Agency KKK recieved the office equipment based on
invoice/delivery receipt. The entry for this transaction would be: (ignore tax implication)
e. Office Equipment ................................................... 200,000
f. Office Equipment ................................................... 200,000
g. Office Equipment ................................................... 200,000
h. Memorandum entry in RAOCO.
25.Agency MMM have an obligation for building upon signing of contract amounting to P10,000,000.
The entry to record this transaction would be:
e. No Entry
f. Memorandum entry in RAOCO.
g. Appropriations Alloted ........................................... 10,000,000
Obligations Incurred ......................................... 10,000,000
h. Building .................................................................. 10,000,000
Accounts Payable ............................................. 10,000,000
26.What is the entry to record the collection of a P15,000,000 corporate income taxes by the BIR in its
agency books?
e. Memo entry
f. Cash Collecting Officer .............................................. 15,000,000
g. Cash-National Treasury, MDS .................................... 15,000,000
h. Income Tax – Corporation .......................................... 15,000,000
27.What is the entry on the Agency books to record BIR's remittance of the same collection to the Btr?
e. Memo entry
f. Cash Collecting Officer .............................................. 15,000,000
g. Cash-National Treasury, MDS .................................... 15,000,000
h. Income Tax – Corporation .......................................... 15,000,000
28.Agency ABC sold a 50% depreciated motor vehicle which had an original cost of P300,000 for
P200,000. The proceeds shall be deemed automatically appropriated for the purchase of replacement
higher capacity vehicle worth P500,000, net of applicable tax. The agency subsequently received a
NCA of P500,000 for the purchase of the said vehicle. What is the entry to record the receipt from the
disposal of the motor vehicle?
e. Cash – Collecting Offiicer ......................................... 200,000
Due to Btr ............................................................ 200,000
f. Cash – Collecting Offiicer ......................................... 200,000
g. Cash – Collecting Offiicer ......................................... 200,000
Accumulated Depreciation – Vehicle ........................ 150,000
Motor Vehicle ...................................................... 300,000
h. Cash – Collecting Offiicer ......................................... 200,000
Accumulated Depreciation – Vehicle ......................... 150,000
Motor Vehicle ....................................................... 300,000
Due to Btr ............................................................. 50,000
29.Using the information in number 8, what is the entry to record remittance of the collection to the
Btr, if any.
e. No necessary entry, since there is no need to remit the collection to the Btr.
f. Gain on Sale of Diposed Assets ................................. 50,000
Government Equity .................................................... 150,000
g. Due to Btr ................................................................... 200,000
h. Subsidy Income from National Government 200,000
30.Using the information in number 8, what is the entry to record the receipt of the NCA for the
purchase of new motor vehicle?
e. Memo entry
f. Cash-National Treasury, MDS .................................... 300,000
g. Cash-National Treasury, MDS .................................... 450,000
h. Cash-National Treasury, MDS .................................... 500,000
31.During 2003, an alumnus of Smith College, a private not-for-profit college,
transferred $100,000 to the college with the stipulation that it be spent for library
acquisitions. However, the alumnus specified that none of the cash transferred
could be spent until the college had matched the entire amount transferred with
donations from other alumni by December 31, 2004. As of December 31, 2003,
the college had received matching cash donations of only $5,000 from other
alumni, and the college estimated that it was reasonably possible that it would
not reach the goal of $100,000 by December 31, 2004. If the funds are not
matched by December 31, 2004, the cash will be returned to the alumnus.
On the college’s statement of financial position at December 31, 2003, the cash
transfer of $100,000 would be included in the amount reported for
a. Liabilities. b. Unrestricted net assets. c. Temporarily restricted net assets. d.
Permanently restricted net assets.
32. During the year ended December 31, 2003, a not-forprofit performing arts
entity received the following donorrestricted contribution and investment income:
I. Cash contribution of $100,000 to be permanently invested.
II. Cash dividends and interest of $6,000 to be used for the acquisition of theater
equipment.
As a result of these cash receipts, the statement of cash flows for the year ended
December 31, 2003, would report an increase of
a. $106,000 from operating activities. b. $106,000 from financing activities.
c. $6,000 from operating activities and an increase of $100,000 from financing
activities.
d. $100,000 from operating activities and an increase of $6,000 from financing
activities.
33. Sea Lion Park, a private not-for-profit zoological society, received contributions restricted for
research totaling
$50,000 in 2003. None of the contributions were spent on research in 2003. In 2004, $35,000 of the
contributions
were used to support the research activities of the society. The net effect on the statement of activities
for the year ended December 31, 2004, for Sea Lion Park would be a
a. $15,000 increase in temporarily restricted net assets.
b. $35,000 decrease in temporarily restricted net assets.
c.$35,000 increase in unrestricted net assets.
d. $35,000 decrease in unrestricted net assets.
34. Clara Hospital, a private not-for-profit hospital, earned $250,000 of gift shop revenues and spent
$50,000 on research
during the year ended December 31, 2003. The $50,000 spent on research was part of a $75,000
contribution received during December of 2002 from a donor who stipulated that the donation be used
for medical research. Assume none of the gift shop revenues were spent in 2003. For the year ended
December 31, 2003, what was the increase in unrestricted net assets from the events occurring during
2003?
a. $300,000 b. $200,000 c. $250,000 d. $275,000
35. Which of the following transactions of a private notfor- profit voluntary health and welfare
organization would increase temporarily restricted net assets on the statement of activities for the year
ended June 30, 2003?
I. Received a contribution of $10,000 from a donor on May 15, 2003, who stipulated that the donation
not be spent until August of 2003.
II. Spent $25,000 for fund-raising on June 20, 2003. The amount expended came from a $25,000
contribution on March 12, 2003. The donor stipulated that the contribution be used for fund-raising
activities.
a. Both I and II. b. Neither I nor II. c. I only. d. II only.
36. Catherine College, a private not-for-profit college, received the following contributions during
2003:
I. $5,000,000 from alumni for construction of a new wing on the science building to be constructed in
2003.
II. $1,000,000 from a donor who stipulated that the contribution be invested indefinitely and that the
earnings be used for scholarships. As of December 31, 2003, earnings from investments amounted to
$50,000.
For the year ended December 31, 2003, what amount of these contributions should be reported as
temporarily restricted revenues on the statement of activities?
a. $ 50,000 b. $5,050,000 c. $5,000,000 d. $6,050,000
37. PJD Enterprises, a franchisor charges franchisees a “franchise fee” of P500,000. Of this amount, a
non-refundable P200,000 is paid upon the signing of the contract with the balance payable in three
equal annual installments after each year thereafter starting 2012; PJD will assist in locating a suitable
business site, conduct a market study, oversee the construction of facilities, and provide initial training
for employees.
On October 1, 2011, PJD entered into a franchising agreement to cover an entirely new and untested
area. By december 31, 2011, PJD has substantially completed and rendered appropriate services at a
total cosr of P150,000, but has somehow, has raised some doubts on the collectibility of the balance of
the franchise fee. In its 2011 income statement, PJD Enterprises should recognize a profit of:
A.P50,000 B. P140,000 C. P200,000 D. P350,000
38. Ruby Company charges new franchisees an initial fee of P2,500,000. Of this amount, P1,000,000 is
payable in cash when the agreement is signed, and the remainder is to be paid in three annual
installments, which are evidenced by an interest bearing promissory notes. In consideration therefore,
Ruby Company will assist in locating the business site, conduct a market study to estimate the earnings
potential, supervise construction of a building, and provide initial training to employees.
On December 31, 2011, Ruby Company entered into a franchise agreement with Jade, Inc. by the end
of the year. Ruby Company has completed about 25% of the initial services at a cost of P150,000 and it
has ascertained that collection of the notes is reasonably assured. For 2011, Ruby Company should
recognize franchise revenue of:
A.P0 B. P850,000 C. P1,000,000 D.P2,500,000

39. On January 2, 2009, SD Company signed an agreement to operate as a franchisee of TQ Products,
Icn., for an initial franchise fee of P937,500 for 7 years. Of this amount, P175,000 was paid when the
agreement was signed and the balance payable in four annual payments beginning on December 31,
2009 . SD signed a non interest bearing note for the balance. SD's rating indicates that he can borrow
money at 16% for the loan of this type. Assume that substantial services amounting to P283,500 had
already been rendered by TQ Products and that additional indirect franchise cost of P25,500 was also
incurrred. PV factor is 2.80
If the collection of the note is not reasonably assured, the net income for the year ended December 31,
2009 is
A. P313,435 B. P228,035 C. P168,135 D.P253,535
40. oN November 30, 2009, Loveless Company authorized NBSB Corp. to operate as a frachisee for an
initial franchise fee of P1,950,000. Of this amount, P750,000 was received upon signing the agreement
and the balance, represented by a note, is due in four annual payments starting November 30, 2010. PV
of P1 at 12% for 4 periods is .06355.Present Value of an ordinary annuity of P1 at 12% for 4 periods is
3.0374 The period of refund will elapsed on January 31, 2010. The franchisor has performed
substantially all of the initial services but the operations of the store have yet to start. Collectibility of
the note is reasonably certain. How much is the unearned franchise fee on the year ended December 31,
2009?
A. P1,661,220 B.P750,000 C.P911,220 D, P0
41. Forever, Inc granted a franchise to Hopeless Romantic for the Manila area. The franchisee was to
pay a franchise fee of P250000, payable in five equal installments starting with the payment upon
signing of the agreement. The franchise was to pay monthly 3% of gross sales of the preceding month.
Should the operations of the outlet prove to be unprofitable, the franchise may be cancelled with
whatever obligations owing Forever, Inc. in connection with the P250,000 franchise fee waived. The
prevailing interest rate for a non- interest bearing note is 14%. The first year generated a gross sales of
P1,250,000. What is the amount of unearned franchise fee after the first year of operations?
A.P287,500 B.P145700 C. P195,700 D.P250,000
42. AAA,Inc.awarded its franchise for Davao City to Savory Foods for a total fee of P250,000 , payable
P50,000 at the time the contract is signed and the balance in two equal installments after each year
following the signing date. The agreement was signed at the beginning of 2008 and it provided among
others, that in the event the first year of operations prove to be uncollectible the franchise agreement
may be voided with no need for the franchisor to return any amount already paid nor the franchisee to
pay any balance still unpaid. Indeed, the first year proved to be unprofitable . In 2008 AAA, Inc. would
report franchise fee revenue of :
A. P0 C. P150,000
B P50,000 D. P250,000
43. On December 29,2008, Fiesta Hat signed a franchising agreement for the operation of an outlet in
Dagupan City by Sombrero Company. The franchising agreement required the franchisee, Sombrero
Company to make an initial payment of P200,000 upon signing of the contract and three payments each
of P100,000 beginning one year from the agreement date and yearly thereafter. The franchisor agrees to
make market studies, find a suitable location, train employees and perform some other related services.
The initial payment is refundable until substantial performance is effected. At the end of 2008 , Fiesta
Hat should report franchise fee revenue of:
A. P0 C. P200,000
B. P125,000 D. P500,000
44. Tam's Pizza, Inc, charges an initial franchise fee of P50,000 for the right to operate as a franchisee
of Tam's Pizza. Of this amount, P10,000 is payable when the agreement was signed and the balance is
payable in five annual payment of P8,000 each. In return for the initial frachise fee, the franchiser will
help locate the site, negotiate with the lease or purchase of the site, supervise the construction acitvity,
and provide the bookkeeping services. The credit rating of the franchisee indicates that money can be
borrowed at 8%. The present value of an ordinary annuity of five receipts of P8,000 each discounted at
8% is P31,941.68
If the initial downpayment is not refundable and no future services are required by the franchiser, but
collection of the note is so uncertain that recognition of the note as an asset is unwarranted, the entry
should be:
A. Cash 10,000
Discount on Notes Receivable 8,058.32
Unearned Franchise Fees 41,941.68
B. Cash 10,000
Discount on Notes Receivable 8058.32
Revenue from Franchise Fees 41,941.68
C. Cash 10,000
Revenue from Franchise Fee 10000
D. Cash 10,000
Unearned Franchise Fees 10,000
45. On April 1, 2004, Motorola, Inc. entered into a franchise agreement with a local businessman. The
franchisee paid P45,000 and gavea P30,000, 8%, 3 year notes payable with interest due annually on
March 31. Motorola recorded the P75,000 initial franchise fee as revenue on April 1, 2004 . On
December 30, 2004 , the franchisee's note and refunded P24,000 less accrued interest on the note of the
P45,000 paid on April 1. What entry should Motorola make on December 30, 2004?
A. Loss on Repossessed Franchise P24,000
Cash P24,000
B. Loss on Reposessed Franchise P22,200

Cash P22,200
C. Loss on Reposessed Franchise P52,200

Cash P22,200
D. Revenue from Franchise Fees P75,000

Interest Income P1800
Cash 22,200
Revenue from Reposessed Franchise 21,000
46. A critical characteristic of a derivative is that the instrument

a. derives its value from a related asset or liability.
b. derives its value from changes in value of a related asset or liability.
c. requires that the related asset or liability be sold or bought at settlement.
d. requires the holder of the derivative instrument to make a significant investment.
47. The notional amount of a derivative instrument is

a. related to the number of units specified in the derivative and the price that relates to the
asset or liability underlying the derivative.
b. the change in the price or rate that relates to the asset or liability underlying the derivative.
c. the price or rate that relates to the asset or liability underlying the derivative.
d. the number of units that is specified in the derivative instrument.
48. The total value of a derivative is determined by the

a. number of units specified in the derivative and the price that relates to the asset or liability
underlying the derivative.
b. change in the price or rate that relates to the asset or liability underlying the derivative.
c. price or rate that relates to the asset or liability underlying the derivative.
d. number of units that is specified in the derivative instrument.
49. A forward contract

parties.
b. is NOT traded on an organized exchange and is subject to formal regulation which results
in standardized contracts.
c. is traded on an organized exchange and is subject to formal regulation which results in
standardized contracts.
50. A futures contract

parties.
in standardized contrasts.
51. An option
parties.
in standardized contracts
c. is traded on an organized exchange or may be negotiated on a case-by-case basis between
counterparties.
52. A swap
parties.
53. On September 1st of the current year, Mooney Company writes a contract agreeing to sell to Berry
Company 200,000 foreign currency (FC) units at a specific price of $2.14 per FC with delivery in 30 days. The
spot rate at the end of 30 days is $2.17. The appropriate discount rate for both Mooney Company and Berry
Company is 9%.
On the settlement of the contract, Mooney would record a

a. gain of $6,000.
b. gain of $5,955.
c. loss of $6,000.
d. loss of $5,955.
54. Jenson Company buys 20 contracts on the Chicago Board of Trade to receive October delivery
of soybeans to a certified warehouse. Each contract is in units of 3,000 bushels at a futures price of
$2.75 per bushel. The owner of the contract requires a margin account with an initial margin of $8,000,
with a maintenance margin of $6,000. What entry will Jenson Company make to establish the margin
account?
a. A memo entry to record acquisition of the contract which has no value at inception.
b. Futures contract - margin account 6,000
Cash 6,000
c. Futures contract - margin account 8,000
Cash 8,000
d. Futures contract - margin account 165,000
Cash 165,000
10.
55
. Clark Company holds several options:
Spot Price Strike Price
Call option on Ionics $29.80 $27.90
Call option on Kimberly 60.41 64.84
Put option on Motorola 14.25 16.40
Put option on Nortek 32.10 32.10
The intrinsic value of Clark Company's options is
a. $0.38.
b. $4.05.
c. $4.43.
d. $8.48.
56. On April 4, Alam Company purchased a call option on 10,000 bushels of corn with delivery on
June 30. The strike price is $2.15 per bushel. The value of the option and the market value of the corn
are as follows.
Value of the option Value of the corn
April 4 $1,830 $20,400
April 30 2,010 22,500
May 31 2,530 23,800
June 30 2,700 24,200
a. On April 4, the intrinsic value of the option is $1,100.

b. On April 30, the time value of the option is $1,010.
c. On May 31, the intrinsic value of the option is $230.
d. On June 30, the time value of the option is $2,700.
57.On May 1 of the current year, Orr Company purchases a call option on 15,000 bushels of corn with
delivery in July for a premium of $1,200 and a strike price of $3.05 per bushel. The values of the
option at the end of May and June are $1,125 and $1,007, respectively. The option is sold on July 7th
for $1,133. Orr Company prepares monthly financial statements.
a. On May 1, Orr Company records a memo entry to record acquisition of the contract which
has no value.
b. For May, Orr Company records a gain on the contract of $75.
c. For June, Orr Company records a loss of $193.
d. At the sale of the option contract on July 7, Orr Company records a gain of $126.
58. At the beginning of 20X5, a derivative loss associated with a forecasted purchase of equipment will
plus the expected cost of the equipment is $211,000. The fair value of the equipment is $199,000. The
equipment has a useful life of 5 years.
a. $12,000 should be included in Other Comprehensive Income in 20X5.

b. $2,400 should be included in Other Comprehensive Income each year from 20X5 to 20X9.
c. $12,000 should be included in Income in 20X5.
d. $2,400 should be included in Income each year from 20X5 to 20X9.
59.Under special accounting treatment for cash flow hedge of a forecasted transaction, the relationship
between the change in value of a derivative instrument and the change in value of the forecasted
transaction affects the amount of gain(loss) that should be in Other Comprehensive Income (OCI). If
the amount of gain on derivatives that is classified as OCI is $17,500 and the cumulative loss on the
remaining forecasted transaction is ($13,200), the amount of OCI to be reclassified as a component of
current earnings is
a. $4,300.
b. $13,200.
c. $17,500.
d. not applicable.
60.The best definition for direct quotes would be "direct quotes measure
a. how much foreign currency must be exchanged to receive 1 domestic currency."

b. current or spot rates."
c. how much domestic currency must be exchanged to receive 1 foreign currency."
d. exchange rates at a future point in time."
61. A U.S. company purchases medical lab equipment from a Japanese company. The Japanese
company requires payment in Japanese yen. In this transaction, the yen would be referred to as the
a. domestic currency for the U.S. company.
b. denominated currency.
c. purchasing currency.
d. selling currency.
62. A U.S. company that has purchased inventory from a German vendor would be exposed to a net
exchange gain on the unpaid balance if the
63. A U.S. company that has sold its product to a German firm would be exposed to a net exchange
gain on the unpaid receivable if the
64. A bank dealing in foreign currency tells you that the foreign currency will buy you P.80 Ph Peso
. The bank has given you
a. a direct quote.
b. an indirect quote.
c. the official (fixed) rate.
d. a forward rate.
65. When an economic transaction is denominated in a currency other than the entity's domestic
currency, the entity must establish a
a. domestic rate.
b. hedge rate.
c. rate of currency change.
d. rate of exchange.
66. A forward exchange contract is being transacted at a premium if the current forward rate is
a. less than the expected spot rate.
b. greater than the expected spot rate.
c. less than the current spot rate.
d. greater than the current spot rate.
67. Which of the following factors influences the spread between forward and spot rates?
a. which currency is denominated as the domestic currency
b. the length of the forward exchange contract
c. the current cross rate between the two currencies
d. all are factors that may influence the spread
68. Foreign currency transactions not involving a hedge should be accounted for using
a. the one-transaction method.
b. the two-transaction method.
c. a hybrid of the one- and two-transaction methods.
d. either the one- or the two-transaction method (allowed by the FASB).
69. A transaction involving foreign currency will most likely result in gains and losses to the
reporting entity if the
a. forward exchange contract is selling at a premium.
b. transaction is denominated and measured in the reporting entity's currency.
c. transaction takes place in a country with a tiered monetary system.
d. transaction is denominated in a foreign currency and measured in the reporting entity's
currency.
70. Given the following information for a 90 day contract:
US Dollars FC
Value Today 3,750 5,000
Interest Rate 4% 7%
3 months interest 37.50 87.50
Value in 3 months ?? ??
The spot rate today is 1 FC = .75
What will be the forward rate?

a. 1FC = .75 US Dollars
b. 1FC = .57 US Dollars
c. 1FC = .745 US Dollars
d. 1FC = .70 US Dollars
71.A U.S. firm has purchased, for 50,000 FCs, an electric generator from a foreign firm. The exchange
rates were 1 FC = $0.80 on the delivery date and 1 FC = $0.76 when the payable was paid. What is the
final recorded value if the two-transaction method is used?
a. $40,000
b. $38,000
c. $42,000
d. $50,000
72.A U.S. manufacturer has sold computer services to a foreign firm and received 200,000 foreign
currency units (FCs). The exchange rates were 1 FC = $.75 on the date of the sale and 1 FC = $.80
when the receivable was settled. On the transaction date, the settlement exchange rate is estimated to be
1 FC = $.72. By the settlement date, what is the total exchange gain or loss recorded for the transaction
if the two-transaction method is used?
a. $10,000 exchange gain
b. $6,000 exchange loss
c. $10,000 exchange loss
d. no gain or loss
73.A U.S. manufacturer has sold goods to a foreign firm for a sale price of 80,000 FC on 12/15/X1. The invoice
is due 1/15/X2. The U.S. Firm fiscal year is 12/31/X1. Given the following exchange rates, what gain or loss
would the U.S. firm record on 12/31?
12/15 1FC = $0.60 US Dollars

12/31 1FC = $0.65 US Dollars
1/15 1FC = $0.63 US Dollars
a. loss of $4,000
b. loss of $1,600
c. gain of $2,400
d. gain of $4,000
74. Which of the following does not represent an exchange risk on an exposed position to a company
transacting business with a foreign vendor?
a. transaction is denominated in foreign currency, settled at a future date

b. firm commitment to purchase inventory to be paid for in foreign currency
c. Forecasted foreign currency transaction with a high probability of occurrence
d. firm commitment to purchase inventory denominated in Philippine Pesos
75.On August 1, 20X1, an American firm purchased a machine costing 200,000,000 yen from a
Japanese firm to be paid for on October 1, 20X1. Also on August 1, 20X1, the American firm entered
into a contract to purchase 200,000,000 yen to be delivered on October 1, 20X1, at a forward rate of 1
Yen = P0.00783. The exchange rates were as follows:
Spot
August 1, 20X1 1 Yen = P0.00781
August 31, 20X1 1 Yen = P0.00777
October 1, 20X1 1 Yen = P0.00779
Which of the following statements is incorrect concerning the accounting treatment of these
transactions?
a. The machine's final recorded value was P1,558,000.
b. The beginning balance in the accounts payable was P1,562,000.
c. An exchange gain on the accounts payable of P4,000 was recognized on October 1, 20X1.
d. The value of the accounts payable just before payment, on October 1, 20X1, was
P1,558,000.
Prepared by: Sir Stan
Don't do nothing because you feel you can only do

little, do what you can.
Your future depends on many things, but mostly on

you
It is not who is right, but what is right, that is

important

Start right…
Fax No. (078) 844-0889
NAME: SCORE:
SUBJECT: DATE:
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University of Saint Louis Tuguegarao

SCHOOL of BUSINESS ADMINISTRATION and ACCOUNTANCY

INTEGRATED ACCOUNTING PART 1 ( Midterm Examination)

Instruction: Shade the letter of the correct answer. Strictly no erasures.

2. The notional amount of a derivative instrument is

3. The total value of a derivative is determined by the

On the settlement of the contract, Mooney would record a

The intrinsic value of Clark Company's options is

a. On April 4, the intrinsic value of the option is $1,100.

a. $12,000 should be included in Other Comprehensive Income in 20X5.

a. how much foreign currency must be exchanged to receive 1 domestic currency."

25. Given the following information for a 90 day contract:

What will be the forward rate?

12/15 1FC = $0.60 US Dollars

a. transaction is denominated in foreign currency, settled at a future date

31. Scenario 10-1

a. fix the basis of sales revenue to the date of the commitment

37. The time value of an option is the difference between the

a. premium paid and its current rate.

Nov. 30, 20X3 Dec. 31, 20X3

Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Nov. 30, 20X5 Dec. 31, 20X5 Jan. 31, 20X6

Jan. 1, 2005 1 euro = $1.40 U.S.

The entry for the replenishment transaction would be:

A.P50,000 B. P140,000 C. P200,000 D. P350,000

A.P0 B. P850,000 C. P1,000,000 D.P2,500,000

69. On January 2, 2009, SD Company signed an agreement to operate as a franchisee of TQ Products,

A. P313,435 B. P228,035 C. P168,135 D.P253,535

A. P1,661,220 B.P750,000 C.P911,220 D, P0

A.P287,500 B.P145700 C. P195,700 D.P250,000

B. Loss on Reposessed Franchise P22,200

C. Loss on Reposessed Franchise P52,200

D. Revenue from Franchise Fees P75,000

Prepared by: Sir Stan

Your future depends on many things, but mostly on

It is not who is right, but what is right, that is

University of Saint Louis Tuguegarao

INTEGRATED ACCOUNTING PART 1 ( Midterm Examination)

Instruction: Shade the letter of the correct answer. Strictly no erasures.

2.ANS:D DIF: E OBJ: Module-1

3.ANS:A DIF: E OBJ: Module-1

4.ANS:A DIF: E OBJ: Module-2

5.ANS:C DIF: E OBJ: Module-2

6.ANS: C DIF: E OBJ: Module-2

7.ANS: A DIF: E OBJ: Module-2 | Module-5

8.ANS: C DIF: M OBJ: Module-3

9.ANS: B DIF: M OBJ: Module-3

10ANS: B DIF: M OBJ: Module-4

11.ANS: B DIF: D OBJ: Module-4

12.ANS: D DIF: M OBJ: Module-4

13.ANS: C DIF: D OBJ: Module-8

14.ANS: A DIF: D OBJ: Module-8

15.ANS: C DIF: E OBJ: 10-2

16.ANS: B DIF: M OBJ: 10-2

17.ANS: C DIF: M OBJ: 10-2

18.ANS: B DIF: M OBJ: 10-2

19.ANS: A DIF: E OBJ: 10-2

20.ANS: D DIF: E OBJ: 10-2