SUBJECT QUESTIONS SOURCE TYPE
Which of the following does not constitute as donation? RESA
a. Sale, barter or exchange of ordinary assets for less than adequate or full First
consideration in money or money’s worth #27
b. Condonation or remission of debt where the debtor did not render services
in favor of the creditor.
c. Sale, barter or exchange of capital assets for less than adequate or full
consideration in money or money’s worth
d. None of the choices
A franchise grantee of radio and television broadcasting, not VAT registered, RESA
has the following receipts for the first quarter of the current year: First
#62
Gross receipts, sale of airtime to block timers P9,500,000
Gross receipts, use of communication facilities for 2,000,000
TAXATION
overseas calls
Gross receipts, rent to office spaces 3,500,000
Expenses, sale of water 1,000,000
Expenses, rent of office spaces 500,000
How much is the franchise tax?
a. P480,000 b. P345,000
c. P285,000 d. None of the choices
How much is the Value-Added tax? RESA
a. P660,000 b. P420,000 First
c. P240,000 d. None of the choices #63
How much is the overseas communications tax? RESA
a. P1,150,000 b. P550,000 First
c. P200,000 d. None of the choices #64
Jose Cruz, mango plantation owner, sold ripe mangoes to Juan Santos, dried RESA
fruit processor. Mr. Santos sold the dried mangoes he processed to Mr. Final
Pedro Reyes, owner of restaurant that sells dried to its clientele. Who shall #45
be exempt from value-added tax on sales?
a. Jose Cruz only
b. Jose Cruz and Mr. Juan Santos
c. Juan Santos and Pedro Reyes
d. None of the three.
In financial accounting, certain rules and regulations must be followed on CPAR FIRST
how financial statements must be presented to readers. In managerial SET A
accounting, no such restrictions generally apply because it is #9
a. An entirely different field that need not observe the broad
guidelines in financial accounting.
b. Designed to provide management with non-financial information for
MAS
decision-making.
c. Designed to provide accounting and other financial data to assist
management in making business decisions
d. A discipline that does not require preparation of financial
statements
This refers to avoiding competition in making a product distinct from that of RESA
competitors by adding value or features for which consumers are willing to FIRST
pay more. SET B
#4
a. Kaizen
b. Confrontation
c. Differentiation
d. Cost leadership
The following information relates to Snowbird Corporation: CPAR
Sales at the break-even point P312,500 First
Total fixed expenses P250,000 SET A
#54
Net operating income P150,000
What is Snowbird’s margin of safety?
a. P62,500 b. P100,000
c. P187,500 d. P212,500
In comparing financial and management accounting information, which of RESA
the following more accurately describes management accounting FIRST
information? SET B
#4
a. Historical, precise, useful
b. Required, estimated, internal
c. Budgeted, informative, adaptable
d. Comparable, verifiable, monetary
Montenegro began business at the start of the current year. The company RESA
planned to produce 25,000 units, and actual production conformed to FIRST
expectations. Sales totaled 22,000 units at P30 each. SET B
#70
Costs incurred were:
Fixed manufacturing overhead P150,000
Fixed selling and administrative cost 100,000
Variable manufacturing cost per unit 8
Variable selling and administrative cost per unit 2
If there were no variances, how much was the company’s absorption costing
income?
a. P190,000 b. P202,000
c. P208,000 d. P220,000
On January 1, 2018, an entity sold an equipment with remaining useful life of CPAR
10years and immediately leased it back for 5 years under an operating lease. FIRST
The sale price is P1,800,000 and the annual rent is P200,000. The equipment Set A
#42
had a carrying amount of P3,500,000 and fair value of P3,000,000 on the
date of sale and leaseback. What total amount of expenses should be
recognized by the seller-lessee for 2018?
a. 740,000 b. 940,000 c. 700,000 d. 200,000
When a decline in the price of materials indicates that the cost of the PRTC
finished products exceeds net realizable value, the materials are written First
down to net realizable value. In such circumstances, which of the following is Set A
#31
the best available measure of the net realizable value of the materials?
a. The replacement cost
b. General selling prices
c. Fair value less cost to sell
d. Quoted prices in an active market for identical assets
An entity gives warranties at the time of sale or purchasers of its product. CPAR
The entity undertakes to make good, by repair or replacement, FIRST
manufacturing defects that become apparent within one year from the date SET A
#43
of sale. Sales of P20,000,000 were made evenly throughout 2018.
The expenditures for warranty repairs and replacements for the products
sold in 2018 are expected to be made 50% in 2018 and 50% in 2019. The
2019 outflows of economic benefits related to the warranty will take place in
December 31, 2019.
The entity estimated that 95% of products sold require no warranty repairs,
3% of products sold require minor repairs costing 10% of the sales price, and
2% of products sold require major repairs or replacement costing 90% of
sales price.
The appropriate discount factor for cash flows expected to occur on
December 31, 2019 in 0.95. An appropriate risk adjustment factor to reflect
uncertainties in the cash flow estimates is an increment of 6% to the
probability-weighted expected cash flows.
What is the warranty expense for the year ended December 31, 2018?
a. 222,600 b. 211,470 c. 445,200 d. 434,070
