Quiz

Chapter 7

T/F

__________ If any evidence exists that a financial asset is impaired, the entity shall measure the amount
of loss as the difference between the carrying amount of the asset and the present value of estimated
future cash flows discounted at the financial assets nominal interest rate.

__________ Bangko Sentral ng Pilipinas commercial papers and preference shares with mandatory
redemption date or are redeemable at the option of the holder is an example of an equity instrument.

MC

Held-to-maturity investments shall be measured subsequently

a. at fair value
b. at cost
c. at amortized cost
d. at net realizable value

Chapter 8

T/F

__________ Educational books produced by a health authority for donation to schools shall be
measured at the lower of cost and net realizable value.

__________ Supplies and materials purchased for inventory purpose shall be recorded using the
perpetual inventory system.

MC

A sale of merchandise would include the following entries except

a. debit to cost of sales

b. debit to sales discount
c. credit to sales revenue
d. debit to cash-collecting officers
e. none of the above

Records, forms and reports to be prepared and/or maintained with regard to inventories are the
following except
a. Waste Materials Report
b. Inspection and Acceptance Report
c. Report of Accountability for Accountable Forms
d. Report on the Physical Count of Inventories
e. None of the above

Chapter 9
T/F

__________ The entry which includes a debit to Advances to Contractors implies that the mode of
acquisition of the investment property is through non-exchange transaction.

__________ Gains or losses arising from the retirement or disposal of IP shall be determined as the
difference between the net disposal proceeds and the carrying amount of the asset, and shall be
recognized in surplus or deficit in the period of the retirement or disposal.

MC

Entity A purchases a building to be held under an operating lease. The cash price is Php2.8M, 40% down
payment, and the balance is payable in 6 semi-annual installments at 12% interest per annum. This
would result to a debit to Investment Property, Building in the amount of:

a. Php2,800,000
b. Php2,496,850
c. Php1,120,000
d. Php2,579,460