Introduction to PAS 8 Standards
40 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What cost formula is not permitted under PAS 2?

  • Weighted Average
  • Last-In, First-Out (LIFO) (correct)
  • First-In, First-Out (FIFO)
  • Specific Identification

    • How many units were available for sale by January 21?

  • 320 units
  • 600 units (correct)
  • 280 units
  • 400 units

    • What is the cost of goods sold calculated using the FIFO method?

  • P3,500
  • P3,760
  • P3,640 (correct)
  • P4,000

    • What unit cost was used for the units sold during the sale on January 12?

    <p>P12</p> Signup and view all the answers

    What is the ending inventory in units after the sale on January 12?

    <p>280 units</p> Signup and view all the answers

    What is the total cost of the ending inventory at the computed costs?

    <p>P3,760</p> Signup and view all the answers

    When utilizing the FIFO method, which purchase is accounted for first during a sale?

    <p>First purchase made</p> Signup and view all the answers

    What is the total cost associated with the purchase made on January 21?

    <p>P2,800</p> Signup and view all the answers

    What is the total cost of the units available for sale?

    <p>P7,400</p> Signup and view all the answers

    What is the weighted average unit cost calculated for the inventory?

    <p>P12.33</p> Signup and view all the answers

    What is the number of units in ending inventory?

    <p>280</p> Signup and view all the answers

    How much is the ending inventory valued at cost?

    <p>P3,452.40</p> Signup and view all the answers

    What is the total cost of sales calculated?

    <p>P3,947.60</p> Signup and view all the answers

    What is the unit cost of the January 7 purchase?

    <p>P12</p> Signup and view all the answers

    Which of the following correctly represents the total units available for sale?

    <p>600 units</p> Signup and view all the answers

    What would be the consequence of using a unit cost of P14 for the January 21 purchase instead of P12?

    <p>Higher ending inventory value</p> Signup and view all the answers

    What is the ending inventory based on the weighted average method?

    <p>P3,720</p> Signup and view all the answers

    How is the moving average cost calculated in this context?

    <p>Total cost of purchases divided by total units available for sale</p> Signup and view all the answers

    What is the cost of sales calculated using the moving average method?

    <p>P3,680</p> Signup and view all the answers

    What is the net realizable value (NRV) of Product A?

    <p>P120,000</p> Signup and view all the answers

    What is the write-down amount for Product A?

    <p>P10,000</p> Signup and view all the answers

    What will be the total cost of Product B in the financial statement if the NRV is considered?

    <p>P190,000</p> Signup and view all the answers

    Which of the following represents the estimated selling cost of Product B?

    <p>P220,000</p> Signup and view all the answers

    What is the total cost of Product A listed in the financial records?

    <p>P100,000</p> Signup and view all the answers

    Under the cash basis of accounting, when is income recognized?

    <p>When collected</p> Signup and view all the answers

    Which financial activity classification is correct for interest expense paid?

    <p>Financing activity</p> Signup and view all the answers

    What method does PAS 7 encourage for cash flow reporting?

    <p>Primarily the direct method</p> Signup and view all the answers

    Which of the following is classified as an investing activity?

    <p>Dividend income received</p> Signup and view all the answers

    The indirect method of cash flow presentation adjusts profit or loss for what purpose?

    <p>To account for non-cash items and changes in operating assets and liabilities</p> Signup and view all the answers

    What activity classification applies to dividends paid to owners?

    <p>Financing activity</p> Signup and view all the answers

    What does the direct method of cash flow presentation show?

    <p>Each major class of gross cash receipts and payments</p> Signup and view all the answers

    Which of these classifications is incorrect for interest income?

    <p>Investing activity</p> Signup and view all the answers

    What type of cash flows arise from acquisitions and disposals of subsidiaries resulting in loss or obtaining of control?

    <p>Investing activities</p> Signup and view all the answers

    What is NOT a component of cash and cash equivalents disclosures?

    <p>Tax liabilities related to cash balances</p> Signup and view all the answers

    Which of the following defines accounting policies?

    <p>Specific principles and rules applied in financial statement preparation</p> Signup and view all the answers

    Which scenario falls under a change in accounting estimate?

    <p>Estimating the collectibility of receivables</p> Signup and view all the answers

    What is the primary purpose of PAS 8?

    <p>To enhance relevance and reliability of financial statements</p> Signup and view all the answers

    What defines a correction of prior period errors?

    <p>Adjustments recognized due to previous inaccuracies</p> Signup and view all the answers

    Which of the following transactions would NOT be classified as financing activities?

    <p>Selling a subsidiary and its assets</p> Signup and view all the answers

    What characterizes a change in accounting policy?

    <p>The implementation of a new accounting standard</p> Signup and view all the answers

    Study Notes

    Introduction to PAS 8

    • PAS 8 provides standards for selecting, applying, and changing accounting policies.
    • The accounting and disclosure of changes in accounting policies, accounting estimates, and correction of accounting errors are defined within PAS 8.
    • The goal of PAS 8 is to give clearer, reliable, and comparable financial statements.

    Accounting Policies

    • The specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting financial statements.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    CFAS - Lesson 3 - Statement of Cash Flow and other PASs PDF

    Description

    This quiz covers the essential aspects of PAS 8, which provides guidelines for selecting, applying, and modifying accounting policies. It focuses on the accounting and disclosure of changes in accounting policies, estimates, and corrections of errors, aiming for clearer financial statements.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser