D. all of these.

Which of the following is not classified as investment property?

A. Land held for long-term capital appreciation rather than for short-term sale in the ordinary course of business. B.
Land held for a currently undetermined future use.
C. A building owned by the entity (or held by the entity under a lease) and leased out under one or more
operating leases.
D. Property that is leased to another entity under a finance lease.

According to PAS 40, investment property is measured as follows:

Initial Measurement Subsequent Measurement
A. Cost Cost Model or Fair Value Model
B. Cost Cost model
C. Fair Value Fair Value Model
D. Fair Value Cost Model of Fair Value Model

According to PAS 38, which of the following intangible assets are not subsequently amortized? A.
Internally generated intangible assets
B. Intangible assets that were impaired
C. Intangible assets measured under the revaluation model
D. Intangible assets with indefinite useful life
E. All intangible assets are amortized

Derecognition of investment property is not required when

A. It becomes the subject of operating lease
B. It is sold
C. It is addressed to have no future economic benefits
D. It becomes the subject of a finance lease.

Which of the following is considered a biological asset?

A. Carcass
B. Ham
C. Pig
D. Piggy bank

According to PAS 41, biological assets are measured as follows:

Initial Measurement Subsequent Measurement
A. Fair Value less cost to sell Cost Model or Fair Value Model
B. Cost Cost less accumulated depreciation
C. Cost Cost less accumulated depreciation and impairment losses D. Fair Value less cost to sell
Cost

Which of the following is outside the scope of PAS 41?

A. Dairy cattle used in the production of milk
B. Chickens used in the production of meat
C. Rice plants and other crops that produce agricultural products only once
D. Mango trees and other plants that produce agricultural products repeatedly over a long period of time.

Which of the following statements is correct regarding the measurement of assets related to agricultural activities? A.
Biological assets are initially and subsequently measured at fair value
B. No gain or loss can arise on the initial recognition of a biological asset
C. Agricultural produce is initially and subsequently measured at fair value less costs to sell. D. The gain or loss
arising from the initial measurement of biological asset or agricultural produce is recognized in profit or loss.

Financial statements prepared in accordance with PFRSs are said to be the entity’s “First PFRS financial statements” if
the previous financial statements
A. Were prepared in accordance with other reporting standards not consistent with the PFRSs.
B. Did not contain an explicit and unreserved statement of compline with PFRSs.
C. Contained an explicit and unreserved statement of compline with some, but not all, PFRSs.
D. Were prepared using some, but not all, applicable PFRSs.
E. Any of these.
Retrospective application under PFRS 1 requires restating assets and liabilities in the opening statement of financial
position in order to conform with PFRSs. The resulting adjustments are
A. Recognized directly in retained earnings
B. Recognized in profit or loss
C. Recognized directly in other category of equity
D. A or C

Which of the following is considered an agricultural produce?

A. Fruit cocktail
B. Fruit tree
C. Picked or harvested fruit
D. Dried fruit

ABC statement of financial position as of January 1, 2022 (prepared under previous GAAP) shows an allowance for
bad debts of Php456,000. A review of the aging schedule revealed a mathematical mistake. The correct amount
should have been Php546,000. Does ABC Co. need to revise its previous estimate of bad debts as of January 1,
2022 (date of transition) on December 31, 2023 (end of first PFRS reporting period)?
A. Yes, ABC needs to correct the error. The correction shall be recognized in January 1, 2022 retained earnings.
B. Yes, ABC needs to correct the error. The correction shall be recognized in 2023 profit or loss. C. No. the
subsequent receipt of the information is a non-adjusting event after the reporting period. D. Any of these.

A share-based payment transaction is one in which an entity receives goods or services and pays for them A.
By issuing its own equity instruments
B. Through cash, but the amount is based on the fair value of the entity’s equity instruments.
C. Either a or b, as a choice given to either the entity or the supplier of the goods or services.
D. Any of these.

Which of the following is excluded from the scope of PFRS 2?

A. Employee share option plans
B. Employee share appreciation rights
C. Purchase of goods from an unrelated party in exchange for an entity’s own share of stock
D. Transfer of equity instruments as consideration for a business combination

On February 1, 2021, Entity A offered its employees share options subject to the offer being ratified in the
shareholders’ general meeting. The share option offer was approved in the shareholders’ general meeting held on
March 1, 2021. Entity A issued the share options in April 1, 2021. The fair value of the share options vary between
these dates. For purposes of PFRS 2, the share options should be valued at the fair value determined on A.
February 1, 2021
B. March 1, 2021
C. April 1, 2021
D. Any of these

Which of the following methods must be applied in accounting for business combinations under PFRS 3? A.
Acquirer method
B. Acquisition method
C. Purchase method
D. Pooling interest method

The company that obtains control over another company in a business combination transaction is referred to as the A.
Acquirer
B. Parent
C. Subsidiary
D. A and B

According to PFRS 3, which of the following transaction costs would increase the amount of goodwill from a
business combination?
A. Legal fees, accounting fees and similar costs
B. Issuance costs of equity securities
C. Issuance costs of debt instruments
D. None of these
According to PFRS 5, held for sale classification is permitted when
A. The non-current asset or disposal group is available for immediate sale in its present condition
B. The sale is highly probable
C. A and B
D. The sale actually occurred after the reporting period but before the financial statements were authorized for
issue.

According to PFRS 5, assets held for sale are measured at

A. Fair value
B. Fair value less costs to sell
C. Carrying amount
D. Lower of B and C

According to PFRS 5, a disposal group may qualify as discontinued operation if

A. It is a component of an entity
B. It meets the held for sale classification criteria
C. A and B
D. None of these

The results of a discontinued operations are presented int eh statement of profit or loss
A. Before the profit or loss from continuing operations but after the profit for the year
B. After the profit or loss from continuing operating but before the profit for the year
C. Separately from the profit or loss from continuing operations and it does not affect the profit for the year.
D. As an adjustment to the beginning balance of the retained earnings.

Which of the following is included in profit from continuing operations?

A. Extraordinary items
B. Discontinued operations
C. Other comprehensive income
D. Income tax expense

According to PFRS 6, expenditures on exploration for and evaluation of mineral resources are recognized as A.
Assets
B. Expenses
C. A or B depending on the entity’s accounting policy
D. Not accounted for

According to PFRS 6, how are exploration and evaluation assets measured?

Initial Measurement Subsequent Measurement
A. Cost Cost Model
B. Cost Fair Value Model
C. Cost Cost Model or revaluation model
D. Fair Value fair value through profit or loss

PFRS 7 addresses which of the following?

A. The presentation of financial instruments as financial assets, financial liabilities or equity instruments.
B. The recognition and measurement of financial instruments
C. The disclosures about the significance of financial performance and the nature and extent of risks arising from
financial instruments to which the entity is exposed and how the entity manages those risks D. All of these

Which of the following properly describes credit risk?

A. The possibility that Entity A will not be able to settle its financial liabilities when they become due. B. The
possibility that Entity A will incur loss on its foreign-currency denominated financial instruments when there is an
adverse change in foreign exchange rate.
C. The possibility that entity A cannot collect on its receivables
D. The possibility that Entity A will be required to pay higher interest on its variable-rate loan when market
interest rates increase.

PFRS 8 requires which of the following approaches in identifying operating segments? A.

Manager’s approach
B. Gentle approach
C. Direct approach
D. Management approach
According to PFRS 8, a reportable segment is one which
A. Management uses in making decisions about operating matters
B. Results from aggregation of two or more segments and qualify under any of the quantitative thresholds
C. A and B
D. None of these

Which of the following is not among the quantitative thresholds under PFRS 8?
A. At least 10% of total revenues (external and internal)
B. At least 10% of the higher of total profits of segments reporting profits and total losses of segments reporting
losses, in absolute amount.
C. At least 10% of total assets (inclusive if intersegment receivables)
D. At least 10% of total revenue (external only)

ABC Co. operates in six geographical areas offering three major types of products and services. Internal reports are
structured based on the major types of products and services. How should ABC Co. identify its reportable
segments for external reporting in accordance with PFRS 8?
A. Based on the six geographical areas
B. Based on the three products and services
C. Based on quantitative threshold
D. Based on the operating results of either the geographical areas or the products and services.

According to PFRS 8, disclosures for major customer shall be provided if revenues from transactions with a single
external customer amount to
A. At least 75% of the entity’s external and internal revenues
B. At least 75% of the entity’s external revenues
C. 10% or more of the entity’s external revenues
D. Less than 10% of the entity’s external revenues

A permanent decline in fair value of an investment in equity securities that the entity made an irrevocable election at
initial recognition to subsequently measure at FVOCI is recognized in
A. Profit or loss
B. Other comprehensive income
C. Either A or B
D. Not recognized

Boss Co. purchased bonds at a discount in the open market as an investment. The bonds will be held in order to
collect their contractual cash flows. Boss should account for these bonds at
A. Cost
B. Amortized cost
C. Fair value through OCI
D. Lower of cost or market

An entity invests in a pool of assets that is managed by an investment house. In accordance with the entity’s business
model, the investment will be held until it matures in 10 years’ time, at which date the entity will collect the principal
amount in the investment together with the interest earned. In accordance with the principles of PFRS 9, the entity
will most likely measure the investment at
A. Amortized cost
B. FVPL
C. FVOCI (mandatory)
D. FVOCI (election)

An entity plans to purchase a new machine in a few years’ time. The cost of the new machine is significant. To
address this, the entity invest in debt securities. The entity’s investment management strategy is to hold the
investment and collect the investment income in the form of interest. However, when an opportunity arises, the
entity sells the investment in order to realize fair value gain. The entity reinvests any proceeds from sales until the
date of purchase of the new machine. In accordance with principles of PFRS 9, the entity will most likely classify
the investment as subsequently measured at
A. Amortized cost
B. FVPL
C. FVOCI (mandatory)
D. FVOCI (election)