Home / My Courses / ACC211_6387_2021-2022_2NDSEM-SEM_CAE / 5th to 8th Examinations/Assessments / Final Exam
Question 1
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A gain arising from a change in the fair value
of an investment property for which an entity
has opted to use the fair value
model is recognized in
Select one:
a. Share premium
b. Share warrants outstanding
c.
Profit or loss
d. Retained earnings
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Question 2
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A lease liability is measured at
Select one:
a. The fair value
of the underlying asset
b.
The present value of fixed lease payments
c. The absolute amount of lease payments
d. The present value of lease payments
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Question 3
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A lessee with a lease containing a purchase option that
is reasonably certain to be
exercised should depreciate the right of use asset
over
Select one:
a. Useful life of the asset or lease term, whichever is
shorter
b. Useful life of the asset
c. Lease term
d. Useful life of
the asset or lease term, whichever is longer
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Question 4
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A machine
with a four-year estimated useful life and an estimated 25% residual value was
acquired at the beginning of the current year. The increase in accumulated
depreciation for
the second year using the double declining balance method
would be
Select one:
a.
Original cost X 50%
b. Original cost
X 50% X 50%
c. Original cost X 85%X 50% X 50%
d.
Original cost X 85% X 50%
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Question 5
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After
initial recognition, an entity shall measure a note payable at
Select one:
a. Either amortized cost or fair value through
other comprehensive income
b. Fair value through profit or loss
c. Amortized cost
d. Either
amortized cost or fair value through profit or loss
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Question 6
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The primary objective of reversing entries is to:
Select one:
a. transfer the balance of the expense accounts to the owner’s capital account and set the accounts equal to
zero.
b. correct errors
c. simplify the bookkeeping associated with accruals from the prior period.
d. place the expenses for the current period in the proper accounts.
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Question 7
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If furniture is overvalued by P1,000 in the trial balance _____________.
Select one:
a. The total debit balance is the same as the total credit balance in the trial balance.
b. The total debit balance is greater than the total credit balance in the trial balance.
c. The value of assets on the credit side of the trial balance should be reduced.
d. The total debit balance is smaller than the total credit balance in the trial balance.
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Question 8
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Which of the following situations will cause total debit balance to be greater than the total
credit balance?
Select one:
a. Sales of goods are recorded as purchases of goods in the ledger accounts.
b. The amount extracted from the account of a debtor, Mr. Lee is posted as P1,000 instead of P1,100 in the trial
balance.
c. The amount extracted from a creditor’s account is posted to the wrong side of the trial balance.
d. The purchase of fixture is recorded in the furniture account.
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Question 9
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Princess company purchased a
varnishing machine for 6,000,000 on January 1, 2017. The
entity received a government grant of
540,000 in respect of this asset. The
accounting
policy is to depreciate the asset over 4 years on a straight line
basis and to treat the grant
as deferred income. What should be the carrying amount of the
machine and the deferred
income on December 31, 2018, respectively?
Select one:
a. 3,000,000
and 270,000
b. 3,000,000
and 540,000
c. 4,500,000
and 405,000
d.
3,270,000
and 270,000
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Question 10
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1.
Sumptuous Company, a clothing manufacturer,
purchased a sewing machine for
2,000,000 on July 1, 2014.
The machine had a 10-year useful life, a
100,000 residual value, and was depreciated using
the straight line method.
On January 1, 2017, a test for impairment
indicated that the undiscounted cash flows from
the sewing machine are less
than carrying amount.
The fair value less cost of disposal of the
machine on January 1, 2017 is 600,000.
What amount of loss on impairment should be
recognized?
Answer format: 100,000
Answer: 925,000
Question 11
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Viva
company, after having experienced financial difficulties in 2018, negotiated
with a
major creditor and arrived at an agreement to restructure its note
payable on December 31,
2018. The
creditor was owed principal of P7,200,000 and interest of P800,000 but agreed
to accept equipment worth P1,400,000 and note receivable from Viva company’s
customer
with carrying amount of P5,400,000.
The equipment had an original cost of P1,800,000
and accumulated
depreciation of P600,000. How much
should be recognized as gain from
extinguishment of debt on December 31, 2018?
Answer format:
1,250,000
Answer: 1,400,000
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Question 12
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On December 31, 2018, Bert company
sold a machine to Rei company and simultaneously
leased it back for one year. The entity provided the following information
at this date:
Sale Price 720,000
Carrying amount 660,000
Present value of reasonable lease
rentals (30,000 for 12 months @ 12%) 682,000
Estimated remaining useful life 12 years
In its income statement
for 2018, what amount should be reported as gain from the sale of
the machine?
Answer: 60,000
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Question 13
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On January 1, 2011, FRA Company has decided to
raise additional capital by issuing
5,000,000 face value 5-year bonds with
interest rate of 12% payable annually on December
31. To help the sale of the bonds, share warrants
are issued one warrant for each 1,000
bond sold. The warrant entitles the holder to purchase
five shares at 100 per share. The
par
value of the share is 50. It is reliably
determined that the value of the warrants is 30
each at the time of the
issuance of the bonds. The bonds are
sold for 5,100,000 with
warrants but would have sold only at 4,657, 000 without
the warrants with 14% effective
yield.
What is the equity component of the issuance of the
bonds with warrants on January 1,
2011?
Select one:
a. 600,000
b. 657,000
c. 443,000
d. 343,000
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Question 14
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If the market price is lower than the option price, the call option is
Select one:
a. Out of the money
b. At the money
c. In the money
d. On the money
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Question 15
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1.
Lovelyn
company leased a machinery to another entity on Jan. 1, 2017 with the
following
data:
Cost of
machinery 3,644,760
Annual rental
payable at the end of each year 1,200,000
Useful life 4
years
Lease term 4
years
Implicit
interest rate 12%
PV of annuity of
1 for 4 periods at 12% 3.0373
How much is the
unearned interest income at the end of December 31, 2017?
Answer Format: 100,000
Answer: 1,155,240
Question 16
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Which of the following costs should not be
capitalized?
Select one:
a. Cost of testing prototype before economic
feasibility has been demonstrated
b. Cost incurred to file for patent
c. Engineering cost incurred to advance the product
to the full production stage
d. Acquisition cost of equipment to be used on
current and future research projects
Clear my choice
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Question 17
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On
January 1, 2020, Abba Company leased a building to Bee Company under a
four-year
operating lease. The monthly rental for 2020, 2021, 2022 and 2023 is
P100,000, P150,000,
P200,000 and P250,000, respectively. Rentals are payable at
the end of each month. All
rental payments within the year were made when due.
What amount should be reported as
rent receivable from Bee Company on December
31, 2021?
Answer: 1,200,000
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