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Pru Life UK Overview
40 Questions
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Pru Life UK Overview

Created by
@CaptivatingWombat

Questions and Answers

What section of the financial statement addresses the resources of an entity?

  • Income section
  • Asset section (correct)
  • Liability section
  • Equity section

    • When consolidating earnings of Pru Life UK Philippines and Pru Life UK Hong Kong, what currency should be used?

  • Hong Kong Dollar (correct)
  • Euro
  • Philippine Peso
  • US Dollar

    • What type of relationship exists between Pru Life UK and Pru Life UK Philippines?

  • Partnership
  • Parent-Subsidiary (correct)
  • Joint Venture
  • Franchise

    • In which financial statement is information about economic resources primarily provided?

    <p>Statement of Financial Position</p> Signup and view all the answers

    When reporting in pesos, what action should be taken for uniformity in financial reports?

    <p>Convert figures to Hong Kong Dollars</p> Signup and view all the answers

    What aspect does the Liability section of the financial statement primarily focus on?

    <p>Claims that need to be settled</p> Signup and view all the answers

    During what period is the financial performance of a company primarily assessed?

    <p>During the business year</p> Signup and view all the answers

    What type of information can be derived from the Statement of Comprehensive Income?

    <p>Financial performance through accrual accounting</p> Signup and view all the answers

    What does predictive value in financial information help users with?

    <p>Formulating more intelligible predictions about future outcomes</p> Signup and view all the answers

    What is required for information to achieve faithful representation?

    <p>It must be complete and include all necessary information</p> Signup and view all the answers

    Which of the following best describes neutral information?

    <p>Information that is impartial and not biased</p> Signup and view all the answers

    How is the concept of materiality related to relevance in financial information?

    <p>Information is relevant if it is considered material</p> Signup and view all the answers

    What is essential for a complete depiction in financial statements?

    <p>Inclusion of all relevant and necessary information</p> Signup and view all the answers

    Which aspect is NOT a requirement of faithful representation?

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

    The professional judgment regarding materiality is often based on what factor?

    <p>Identifiable circumstances</p> Signup and view all the answers

    Why is historical information significant in financial reporting?

    <p>It helps users make intelligent projections about the future</p> Signup and view all the answers

    What is the primary role of the IASB?

    <p>To develop and promote international accounting standards</p> Signup and view all the answers

    What does IFRS stand for?

    <p>International Financial Reporting Standards</p> Signup and view all the answers

    Which organization is responsible for developing IAS?

    <p>International Accounting Standards Board</p> Signup and view all the answers

    What must accountants be aware of to comply with international operations?

    <p>Global accounting standards and guidelines</p> Signup and view all the answers

    What is the main purpose of establishing a single set of high-quality accounting standards under IFRS?

    <p>To enhance transparency and comparability of financial statements</p> Signup and view all the answers

    Why is it essential for accountants to hone their skills in international standards?

    <p>To comply with potential international operations</p> Signup and view all the answers

    What can a forensic accountant do related to accounting standards?

    <p>Vouch for the accuracy of financial records in court</p> Signup and view all the answers

    What type of organization is the IFRS Foundation?

    <p>A not-for-profit public interest organization</p> Signup and view all the answers

    What does income refer to?

    <p>Increases in assets or decreases in liabilities</p> Signup and view all the answers

    What triggers a liability according to the content?

    <p>Past events resulting in an obligation</p> Signup and view all the answers

    What type of income is specifically derived from a company's main operations?

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

    Which statement correctly describes gains?

    <p>Gains are incidental or peripheral transactions</p> Signup and view all the answers

    How is equity defined in relation to liabilities?

    <p>Residual interest in assets after deducting liabilities</p> Signup and view all the answers

    Which of the following is NOT a component of income?

    <p>Contributions from equity holders</p> Signup and view all the answers

    What condition must be met for a liability to arise?

    <p>An obligation exists due to a prior event</p> Signup and view all the answers

    What is the relationship between income and equity?

    <p>Income leads to increases in equity, excluding contributions</p> Signup and view all the answers

    What is included in the historical cost of an asset?

    <p>Original purchase price plus shipping and transaction costs</p> Signup and view all the answers

    When may historical cost not reflect changes in the value of an asset?

    <p>When impairment occurs</p> Signup and view all the answers

    What is the historical cost of a liability based on?

    <p>The consideration received to incur the liability minus transaction costs</p> Signup and view all the answers

    If an asset is acquired through a liability, what is true about the interest incurred?

    <p>It is part of the transaction cost for the asset</p> Signup and view all the answers

    Which of the following statements about historical cost is accurate?

    <p>Historical cost is fixed and does not reflect any external changes</p> Signup and view all the answers

    If a phone's value decreases, how should it be recorded?

    <p>Recognize the loss from the decrease in value</p> Signup and view all the answers

    What constitutes the total cost of a purchase that includes shipping?

    <p>Price of the product plus shipping fees</p> Signup and view all the answers

    How is interest on a liability treated when accounting for the acquisition of an asset?

    <p>It is added to the value of the asset</p> Signup and view all the answers

    Study Notes

    Pru Life UK and Financial Reporting

    • Pru Life UK Philippines operates as a subsidiary of Pru Life UK in Hong Kong, maintaining a parent-subsidiary structure.
    • Financial statements in the Philippines use the Philippine Peso (PHP) as the reporting currency, while consolidated earnings utilize the Hong Kong Dollar (HKD).
    • The statement of financial position categorizes resources as assets and obligations as liabilities.
    • Changes in economic resources and claims reflect the company's financial health, highlighting performance through consolidated earnings.
    • Financial performance is detailed in the statement of comprehensive income, emphasizing accrual accounting principles.
    • Forensic accounting provides litigation support and serves as expert testimony in court.

    International Accounting Standards

    • Knowledge of global accounting standards is crucial for accountants due to the rise of international business operations.
    • International Accounting Standards (IAS) were adopted in the Philippines as Philippine Accounting Standards (PAS).
    • The IASB (International Accounting Standards Board) governs and promotes accounting standards globally as of its reconstitution in 2001.
    • The IFRS Foundation, a non-profit organization, aims to establish widely accepted, high-quality accounting standards.

    Qualitative Characteristics of Useful Information

    • Relevant information confirms previous expectations and supports decision-making.
    • Predictive value arises from past financial position and performance, enhancing future forecasts.
    • Complete information necessitates all data for users to comprehend financial snapshots effectively.
    • Neutrality in reporting ensures unbiased data that caters to no specific user needs.

    Materiality Concept

    • Materiality judgment is tied to the relevance of information, based on identifiable conditions within a financial context.

    Income, Equity, and Liabilities

    • Income represents increases in assets or reductions in liabilities, enhancing equity without equity holder contributions.
    • Revenue arises from principal operations, while gains stem from ancillary transactions.
    • Equity indicates the residual interest in assets after liabilities are deducted.

    Historical Cost Accounting

    • Historical cost accounting captures the total acquisition cost of assets, including purchase price and transaction costs.
    • For liabilities, historical cost reflects the consideration received minus transaction costs, such as those incurred from bank loans.

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    Description

    This quiz examines key aspects of Pru Life UK, including its subsidiary in the Philippines and the parent-subsidiary relationship with Hong Kong. Understand financial statements, particularly the statement of financial position and asset sections. Test your knowledge about the company's resources and structure.

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