AAA TOA Review

Quizbowl
Circa 2016-2017

Easy Round
2 points each/30 seconds

1. Supervisory salaries for a

manufacturing plant would be an
example of which of the following
cost?
i. Prime cost
ii.Conversion cost
a. I only
b. II only
c. Both I and II
d. Neither I nor II

2. An entity has an existing land for

future use as a building site. The
building will be constructed after two
years when negotiations are complete.
The entity will classify the land as
a.
b.
c.
d.

Biological asset
Investment property
Noncurrent asset held for sale
Property, plant and equipment

3. An entity shall disclose in the notes

i. The amount of dividends proposed or
declared before the financial statements are
authorized for issue but not recognized as
distribution during the period and the
related amount per share.
ii. The amount of any cumulative
preference dividends not recognized.
a.
b.
c.
d.

I only
II only
Both I and II
Neither I nor II

4. An entity has not declared or paid

dividends on its cumulative preference
shares in the last three years. The
dividends in arrears shall be reported
a.
b.
c.
d.

As a current liability
As a noncurrent liability
As a reduction in shareholders
equity
In a note to the financial statements

5. When there is much variability in

the duration of the entitys normal
operating cycle, the operating cycle is
measured at
a. Its mean value
b. Its median value
c. Three years
d. Twelve months

6. Which ONE of the following

statements best describes the term
'liability'?
a.
b.
c.
d.

An excess of equity over current assets

A present obligation of the entity arising from
past events
Resources to meet financial commitments as
they fall due
The residual interest in the assets of the entity
after deducting all its liabilities

7. In which section of the statement of

financial position should cash that is
restricted for the settlement of a
liability due 18 months after the
reporting period be presented?
a.
b.
c.
d.

Current assets
Noncurrent assets
Equity
Noncurrent liabilities

8. A trademark is an example of which

general category of intangible asset?
a.
b.
c.
d.

Artistic-related
Customer-related
Contract-based
Market-related

9. Biological assets and agricultural

produce are generally valued at
a.
b.
c.
d.

Costs less accumulated depreciation

Fair value
Costs less accumulated depreciation
and impairment loss
Fair value less cost to sell

10. SALN, which is used as evidence

in the Senate impeachment trial of
Supreme Court Chief Justice Renato
Corona, is comparable to an entitys
a. Statement of cash flows
b. Statement of comprehensive income
c. Statement of changes in equity
d. Statement of financial position

11. In computing the cost ratio using

the conventional approach, the
following should be considered, except
a.
b.
c.
d.

Net markups
Purchase returns
Purchase allowance
Sales returns

12. Nonmarketable equity securities

are measured at
a.
b.
c.
d.

Amortized cost using effective interest

method
Cost
Amortized cost using straight line
method.
Fair value

13. The determination of the value or

settlement amount of a derivative
involves a calculation which uses
I An underlying.
II A notional amount.
a. I only.
b. II only.
c. Both I and II.
d. Neither I nor II.

14. A liability shall be classified as

current when (choose the incorrect
one)
a.
b.
c.
d.

it is due to be settled within twelve months after

balance sheet date.
it is expected to be settled in the entitys normal
operating cycle
it is held primarily for the purpose of being traded.
the entity has an unconditional right to defer
settlement of the liability for at least twelve months
after the balance sheet date.

15. The sales revenue recognized at

the commencement of the lease by a
manufacturer or dealer lessor is
a.
b.

c.
d.

Fair value of the asset

Fair value of the asset or present value of the
minimum lease payments, whichever is
higher
Fair value of the asset or present value of the
minimum lease payments, whichever is lower
Present value of the minimum lease
payments

Average Round
3 points each/40 seconds

1. Material Omissions or
misstatements of items are material if
they could individually influence the
economic decisions that users make
on the basis of the financial
statements
TRUE
or
FALSE

2. An entity whose financial

statements comply with PFRSs shall
make an explicit and reserved
statement of such compliance in the
notes. An entity shall not describe
financial statements as complying with
PFRSs unless they comply with all the
requirements of PFRSs.
TRUE
or
FALSE

3. When agricultural crops have been

harvested or minerals have been
extracted and sale is assured under a
forward contract or a government
guarantee, or when an active market
exists and there is a negligible risk of
failure to sell, LCNRV does not apply
anymore.
TRUE
or
FALSE

4. A biological asset shall be measured

on initial recognition and at the end of
each reporting period at its fair value
less costs to sell without exception.
TRUE
or
FALSE

5. PAS 7 states that entities shall

report cash flows from operating
activities using either the direct
method or indirect method, but the
standard favors indirect method.
TRUE
or
FALSE

6. Long term deferred tax assets and

liabilities shall be discounted
TRUE
or
FALSE

7. The gain or loss arising from the

derecognition of an item of property,
plant and equipment shall be included
in profit or loss when the item is
derecognized (unless PAS 17 requires
otherwise on a sale and leaseback).
Gains shall not be classified as
revenue.
TRUE
or
FALSE

8. An intangible asset shall be

measured at cost without exception.
TRUE
or
FALSE

9. An entity shall suspend

capitalization of borrowing costs
during extended periods in which it
suspends active development of a
qualifying asset.
TRUE
or
FALSE

10. The recognition of finance income

shall be based on a pattern reflecting
a constant periodic rate of return on
the lessees net investment in the
finance lease.
TRUE
or
FALSE

11. When the goods or services

received or acquired in a share-based
payment transaction do not qualify
for recognition as assets, they shall be
recognised as expenses.
TRUE
or
FALSE

12. Exploration and evaluation assets

shall be measured at fair value.
TRUE
or
FALSE

13. An entity shall classify all financial

liabilities as subsequently measured at
amortised cost using the effective
interest method.
TRUE
or
FALSE

14. An entity shall explain how the

transition from previous GAAP to IFRSs
affected its reported financial position,
financial performance and cash flows.
TRUE
or
FALSE

15. The operating cycle of an entity is

the time between the acquisition of
assets for processing and their
realisation in cash or cash equivalents.
TRUE
or
FALSE

Difficult Round
5 points each/1 minute

1. How many member/s in the FRSC is

represented by the BOA?
a.
b.
c.
d.

1
2
3
4

2. Statement 1: If the amount of tax

already paid for the current period
exceeds the amount actually payable,
the excess is recognized as a current
tax asset.
Statement 2: In statement 1, it will
result to an income tax payable.
a. I only
b. II only
c. Both I and II
d. Neither I nor II

3. Which of the following statements is

incorrect regarding internal-use
software?
a.

b.

c.
d.

Internal-use software is considered to be

software that is marketed as a separate
product or as part of a product or process
The application and development costs of
internal-use software should be amortized on
the straight line basis unless another
systematic and rational basis is more
appropriate
The costs of testing and installing computer
hardware should be capitalized as incurred
The costs of training and application
maintenance should expensed as incurred

4. Under the direct financing lease, the

excess of the aggregate rentals over
the cost of leased property shall be
recognized as income of the lessor
a.
b.
c.
d.

After the cost of leased property has been

fully recovered through rentals
In constant amounts during the term of the
lease
In decreasing amounts during the term of
the lease
In increasing amounts during the term of
the lease

5. In certain cases, stock dividends are

declared on the basis of a proposed increase in
authorized share capital, the application for
which has been filed but not yet approved by
SEC at the end of reporting period. Under these
circumstances, which may not be done?
a.

b.

c.

A note to the financial statements is unnecessary to

disclose the fact that the proposed increase and
dividend declaration have been reflected in the
financial statements
If the proposed increase is approved by SEC after the
end of reporting period but before the issuance of the
statements, the new authorized share capital may be
presented and the stock dividend may be shown as
part of issued share capital
These matters shall be disclosed in the notes to
financial statements

6. A major advantage of the retail

inventory method is that it
a.
b.
c.
d.

Gives a more accurate measurement of

inventory than other methods
Hides costs from customers and employees
Permits entities to avoid taking an annual
physical inventory
Provides a method for inventory control
and facilitates determination of the
periodic inventory

7. Depletion expense
a.
b.
c.
d.

Excludes intangible development

cost from the depletable amount
Excludes restoration cost from the
depletable amount
Includes tangible equipment cost in
the depletable amount
Is usually part of cost of goods sold

8. Estimations of future cash flows

normally would cover projections over
a maximum of
a. Fifteen years
b. Ten years
c. Five years
d. Twenty years

9. Statement 1: Collateral trust bonds are bonds

secured by stocks and bonds of other corporation.
Statement 2: Coupon bond or bearer bonds are
unregistered bonds in the sense that the name of
the bondholder is not recorded on the entity books.
Statement 3: Junk bonds are bonds issued whereby
another party promises to make payment if the
borrower fails to do so.
Statement 4: Always, the underwriter merely
undertakes to sell the bonds on the basis of a
commission to be deducted from the proceeds of
sale.
How many of the above statements is/are true?
a.
b.
c.
d.

1
2
3
4

10. Statement 1: Compensation based on

fair value of shares is quite an incentive
to act in the best interest of the entity
and ultimately the shareholders.
Statement 2: Share options are granted
to officers and key employees as part of
their remuneration package, but this is
different to a cash salary and other
employment benefits.
a.
b.
c.
d.

I only
II only
Both I and II
Neither I nor II

11. An entity purchases a building and the

seller accepts payment partly in equity
shares and partly in debentures of the
entity. This transaction should be treated in
the cash flow statement as follows:
a.

b.

c.

d.

The purchase of the building should be investing

cash outflow and the issuance of shares and the
debentures financing cash outflows.
The purchase of the building should be investing
cash outflow and the issuance of debentures
financing cash outflows while the issuance of shares
investing cash outflow.
This does not belong in a cash flow statement and
should be disclosed only in the notes to the financial
statements.
Ignore the transaction totally since it is a non-cash
transaction. No mention is required in either the

12. Which statement is correct?

I. All members of the FRSC should
be CPAs.
II. The FRSC BOA and PRC are all
involved in the standard setting
process, with PRC as the final
approving authority.
a. I only
b. II only
c. Both I and II
d. Neither I nor II

i. The objective of the debtor in a debt

restructuring is to make best of a bad
situation or maximize recovery of
investment.
ii. The creditor usually sustains an
accounting gain on debt restructuring
and the debtor realizes an accounting
loss.
a.
b.
c.
d.

I only
II only
Both I and II
Neither I nor II

14. Under a defined benefit plan

I. The entitys legal or constructive
obligation is limited to the amount it
agrees to contribute to the fund.
II. The entitys obligation is to
provide the agreed benefits to current
and former employees.
a.
b.
c.
d.

I only
II only
Both I and II
Neither I nor II

15. Loss from sale of treasury stock

should be charged to
a.
b.
c.
d.

Loss on sale of TS to be shown as other

expense
Retained earnings and the additional paid in
capital from treasury stock
Share premium from treasury stock and then
retained earnings
Share premium from original issuance, share
premium from treasury stock, and then
retained earnings.

End of Quizbowl
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