Accounting for Changes, Errors, RPT, EPS, SBP, IT, EBAccounting for Changes,

Errors, RPT, EPS, SBP, IT, EB

1. Which of the following is characteristic of a change in an accounting estimate?

A. It is usually need not be disclosed
B. It does not affect the financial statements of prior period
C. It should be reported through the restatement of the financial statements
D. It makes the reporting of pro forma amounts for prior periods necessary.
2. A cash settled share based payment transaction shall give rise to an increase in
A. A current asset
B. Equity
C. A noncurrent asset
D. Liability
3. What is the treatment of a change in accounting policy?
A. Prospectively, meaning, no adjustments to prior periods are made either top the
opening balance of retained earnings or in reporting the net income or loss for the
current period because existing balances are not recalculated.
B. Retrospectively, meaning, any resulting adjustment is reported as an adjustment to
the opening balance of retained earnings
C. Currently, meaning, any resulting adjustment is included in recognized gains or
losses
D. Currently, meaning, any resulting adjustment is included in income or loss of the
current period
4. These are events whether favorable or unfavorable that occur between the end of reporting
period and the date on which the financial statements are authorized for issue.
A. Events after the reporting period
B. Current events
C. Events before the reporting period
D. Reporting Period Events
5. Which of the following is incorrect concerning disclosure of related party transactions?
A. Transactions with associates accounted for under the equity method are not
eliminated and therefore require separate disclosure as related party transactions
B. Disclosure of transactions between members of a group is unnecessary in
consolidated financial statements because consolidated financial statements present
information about the parent and subsidiaries as a single reporting entity
C. State controlled entities that re profit oriented are required to disclose transactions
with other state controlled entities
D. Related party relationship where control exists shall not be disclosed if there are no
related party transactions
6. Items reported as prior period errors
A. Do not include the effect of a mistake in the application of accounting policy as this is
accounted for as a change in accounting policy rather than as a prior period error
B. Do not affect the presentation of prior period comparative financial statements
C. Do not require further disclosure in the body of the financial statements
 D. Are reflected as adjustment of the opening balance of retained earnings of the earliest
period presented
7. Options and warrants are dilutive if
A. The option shares represent 50% of the ordinary shares actually outstanding
B. The option price is equal to the average market price
C. The option price is higher than the average market price
D. The option price is lower than the average market price
8. For equity share-based payment transactions, the entity shall measure the goods or
services received and the corresponding increase in equity. Which Statement is correct?
I. Directly, at the fair value of the goods or services received
II. Indirectly, by reference to the fair value of the equity instruments granted, if the fair value
of the goods or services received cannot be estimated reliably
A. I only
B. II only
C. Both I and II
D. Neither I nor II
9. The following statements relate to share options granted to employees in exchange for
their services. Which statements is true?
I. The services received shall be measured at the fair value of the employees services
II. Fair value shall be measured at the date the options vest
A. I only
B. II only
C. Both I and II
D. Neither I nor II
10.The financial statements are authorized for issue
A. The financial statements are authorized for issue
B. When the shareholders approve the financial statements at their annual meeting.
C. When the board of directors reviews the financial statements and authorizes for issue
D. When the financial statements are made available to shareholders
11. Which statement is incorrect concerning accounting estimates?
A. as a result of the uncertainties inherent in business activities, any items in financial
statements cannot be measured with precision but can only be estimated.
B. The use of reasonable estimate is an essential part of the preparation of financial
statements and does not undermine their reliability
C. An estimate may need revision if changes occur in the circumstances on which the
estimate was based or as a result of new information or more experience
D. By its nature, the revision of an estimate relates to a prior period and is a correction of
an error
12. The main purpose of reporting diluted earnings per share is to
A. Provide a comparison figure for debt holders
B. Indicate earnings shareholders will receive in future period
C. Distinguish between companies with a complex capital structure and companies with
a simple capital structure
D. Show the maximum possible dilution of earnings
13. For cash settled share-based payment transactions, an entity shall measure the goods or
services received and the liability incurred at the
A. Fair value of the goods and services received
B. Fair value of the liability
C. Either the fair value of the goods or services received or the fair value of the liability
D. Neither the fair value of the goods or services received nor the fair value of the liability
14. How should the effect of a change in accounting estimate be accounted for?
A. By restating amounts reported in financial statements of prior periods
B. By reporting pro forma amo8unts for prior periods
C. Add a prior period adjustment to beginning retained earnings
D. In the period of change and future periods if the change affects both
15. When share options are granted, in what circumstances is compensation expense
immediately recognized?
A. In all circumstances
B. In circumstances when options are exercisable within 2 years for services rendered
the next two years
C. In circumstances when options are granted for prior service and the options are
immediately exercisable
D. In no circumstances
16. An entity has a subsidiary and is a venture in a joint venture, During the financial
year-end, the entity sold goods to both subsidiary and joint venture. Consolidated financial
statements are prepared combining the financial statements of the entity and the subsidiary.
In the separate financial statements of the entity for the current year, disclosure is required
for transactions with
A. Neither subsidiary nor joint venture
B. Subsidiary only
C. Joint venture only
D. Both subsidiary and joint venture
17. Taxable temporary difference is the
I. Temporary difference that will result in taxable amount in determining taxable income of
future periods when the carrying amount of the asset or liability is recovered or settled.

II. Temporary difference that will result in deductible amount in determining taxable income
of future periods when the carrying amount of the asset or liability is recovered or settled.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
18. These transactions in which the entity receives goods or services as consideration for
equity instruments of the equity instruments of the entity, including shares and share options
A. Equity settled share-based payment transactions
B. Cash settled share-based payment transactions
C. Equity payment transactions
D. Cash payment transactions
19. It is the deferred tax consequence attributable to a taxable temporary difference
A. Deferred tax liability
B. Deferred tax asset
C. Current tax liability
D. Current tax asset
20. If an entity entered into certain related party transactions, it would be required to disclose
all of the following information, except
A. Nature of the relationship between the parties to the transactions
B. Nature of any future transactions planned between the parties and the terms involved
C. Peso amount of the transactions for each of the periods for which an income
statement is presented
D. Amounts due from or to related parties on the date each statement of financial
position presented
21. The entity has issued a range of share options to employees. In accordance with PFRS 2,
what type of share-based payment transaction does this represent?
A. Asset-settled share based payment transaction
B. Equity settled share based payment transaction
C. Cash settled share-based payment transaction
D. Liability settled share based payment transaction
22. These are employee benefits that are payable as a result of an entity’s decision to
terminate an employee’s employment before the normal retirement date, or an employee’s
decision to accept voluntary redundancy in exchange for those benefits
A. Termination benefits
B. Short-term benefits
C. Long-term benefits
D. Post-employment benefits
23. It is the net profit for a period before deducting tax expense
A. Accounting profit
B. Taxable profit
C. Gross profit in Accounting
D. Net profit
24. An entity has calculated its basic earnings per share. In determining diluted earnings per
share, the annual dividend on convertible cumulative preference share which is dilutive shall
be
A. Added back to the numerator of basic EPS whether declared or not
B. Deducted from the numerator of basic EPS only if declared
C. Added back to the numerator of basic EPS only if declared
D. Deducted from the numerator of basic EPS whether declared or not
25. These are transactions in which the entity acquires goods or services by incurring
liabilities to the supplier of those goods or services for amounts that are based on the price
of the entity’s shares and other equity instruments
A. Equity transactions
B. Purchase transactions
C. Cash payment transactions
D. Cash settled share-based payment transactions