Conceptual Framework and Accounting Standards

Who is responsible for making this assessment?

• Accountant

• Management

• Auditor

• Government regulatory body

These are the end product of the financial reporting process and the means by which information gathered and processed is periodically communicated to users.

• Financial Reporting

• Financial statements

• Financial products

• Accounting statements

Which of the following is not one of the general features of financial statements under PAS 1?

• Fair presentation and compliance with PFRSS

• Going Concern

• Cash Basis

• Materiality and aggregation

Who is responsible for the preparation and the fair presentation of an entity's financial statements in accordance with the PFRSs?

• Any accountant

• Auditor

• Certified Public Accountant

• Management

This type of presentation of a statement of financial position does not show distinctions between current and non-current items.

• Classified presentation

• Unclassified presentation

• Non-discriminating presentation

• Awesome presentation

In making an economic decision, an investor needs Information on the amounts of an entity's economic resources and claims to those resources. That investor would most likely refer to which of the following financial statements?

• Statement of financial position

• Statement of comprehensive income

• Statement of cash flows

• Statement of changes in equity

Which of the following financial statements would be dated as at a certain date?

• Statement of financial position

• Statement of profit or loss and other comprehensive income

• Statement of cash flows

• All of these

Imagine you are a business manager. You would be most awesome as a manager in which of the following independent scenarios?

• Your company has an average total assets of P10M during the year. At the end of the year, your company reported a profit of 1M. The average return of other similar companies with the same level of assets is 30%.

• Your adoption of accounting policy has led to the immediate recognition of expenses. Those costs could have otherwise been allocated over several periods. Accordingly, your company did not declare dividends during the period. This resulted to a decline in the market value of your company's stocks while the prices of all other stocks in the stock market have increased.

• You changed your company's method of allocating costs from an accelerated method to a straight-line method. The change met the requirements of the PFRSS. This led to the smoothing of expenses, which increased your company's profit during the period by 12%, above the industry average.

• You are great at closing deals, that's why you're a boss. Eager to increase your company's resources, you were able to obtain a P20M loan from a bank. Interest expense on the loan during the year was P3.4M while the return on investments of loan proceeds was 2%.

This comprises all 'non-owner changes in equity.' It excludes owner changes in equity, such as subscription, issuance, and reacquisition of share capital and declaration of dividends.

• Other comprehensive income

• Changes in equity

• Total comprehensive income

• Profit or loss

Materiality judgment is least likely to be applied in which of the following?

• in determining whether an item warrants separate presentation in the financial statements or is to be aggregated with other

• items in determining whether the information could influence the decisions of users, and therefore, must be presented in the financial statements

• in determining whether the cost of processing and communicating information exceeds the benefits expected to be derived from

• whether additional information needs to be provided, including the level of detail and conciseness of the information's presentation