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Questions and Answers
What is one of the intended learning outcomes of the lesson on the statement of financial position?
What is one of the intended learning outcomes of the lesson on the statement of financial position?
Which item is NOT classified in the statement of financial position?
Which item is NOT classified in the statement of financial position?
Which statement is true regarding the notes to financial statements?
Which statement is true regarding the notes to financial statements?
Which of the following is not a common classification found in the statement of financial position?
Which of the following is not a common classification found in the statement of financial position?
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What does PAS No.1 provide guidelines for?
What does PAS No.1 provide guidelines for?
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What information is essential in the notes to financial statements?
What information is essential in the notes to financial statements?
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Which section would you find 'Current Liabilities' in?
Which section would you find 'Current Liabilities' in?
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The primary purpose of preparing a classified statement of financial position is to:
The primary purpose of preparing a classified statement of financial position is to:
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Which of the following formats is NOT prescribed by PAS 1 for the statement of financial position?
Which of the following formats is NOT prescribed by PAS 1 for the statement of financial position?
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What is an acceptable method of calculating long-term financing according to the content provided?
What is an acceptable method of calculating long-term financing according to the content provided?
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Which of the following refers to shares that are not available for public trading?
Which of the following refers to shares that are not available for public trading?
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Which item is NOT reserved for issuance under options according to the content?
Which item is NOT reserved for issuance under options according to the content?
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What is a characteristic of a net asset presentation in the statement of financial position?
What is a characteristic of a net asset presentation in the statement of financial position?
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In the context provided, what should properly identified accounting details include?
In the context provided, what should properly identified accounting details include?
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Which presentation method of liabilities is allowed according to PAS 1?
Which presentation method of liabilities is allowed according to PAS 1?
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Under what condition is an asset classified as current?
Under what condition is an asset classified as current?
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What classification applies to liabilities expected to be settled within twelve months after the reporting date?
What classification applies to liabilities expected to be settled within twelve months after the reporting date?
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When can a liability be classified as non-current?
When can a liability be classified as non-current?
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How should trade and other payables be presented?
How should trade and other payables be presented?
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What must be included in the presentation of share capital?
What must be included in the presentation of share capital?
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Which of the following is NOT a criterion for classifying an asset as current?
Which of the following is NOT a criterion for classifying an asset as current?
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What is the implication of breaching a long-term loan agreement regarding liability classification?
What is the implication of breaching a long-term loan agreement regarding liability classification?
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What aspect is essential for the correct subclassification of inventories?
What aspect is essential for the correct subclassification of inventories?
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Which of the following is true regarding equity instruments in liability classification?
Which of the following is true regarding equity instruments in liability classification?
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What is the result of making minor mistakes when assessing relevant standards and rules?
What is the result of making minor mistakes when assessing relevant standards and rules?
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What does it imply when a student fails to identify reliable measurement and disclosure criteria?
What does it imply when a student fails to identify reliable measurement and disclosure criteria?
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How is an acceptable job of analogizing described in the assessment?
How is an acceptable job of analogizing described in the assessment?
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What could result from making one or more major mistakes in measurement and disclosure?
What could result from making one or more major mistakes in measurement and disclosure?
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What is indicated when a student assesses all relevant standards successfully?
What is indicated when a student assesses all relevant standards successfully?
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What does it mean if a student makes major omissions when assessing standards?
What does it mean if a student makes major omissions when assessing standards?
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What is the consequence of failing to analogize rules to new situations?
What is the consequence of failing to analogize rules to new situations?
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What does the identification of most relevant standards but still making minor mistakes suggest?
What does the identification of most relevant standards but still making minor mistakes suggest?
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Which organization is responsible for issuing the International Accounting Standards (IAS)?
Which organization is responsible for issuing the International Accounting Standards (IAS)?
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What is the primary purpose of the learning module mentioned in the content?
What is the primary purpose of the learning module mentioned in the content?
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What does R.A. 8293 emphasize regarding copyrighted works?
What does R.A. 8293 emphasize regarding copyrighted works?
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Which of the following is NOT a source of accounting standards listed in the content?
Which of the following is NOT a source of accounting standards listed in the content?
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Which institution is indicated as certified by ISO 9001:2015?
Which institution is indicated as certified by ISO 9001:2015?
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What could happen if someone unauthorized reproduces or uses the learning module?
What could happen if someone unauthorized reproduces or uses the learning module?
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Which type of use is explicitly allowed under section 185 of R.A. 8293?
Which type of use is explicitly allowed under section 185 of R.A. 8293?
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Which of the following authors is associated with the publication of Intermediate Accounting Volume 3?
Which of the following authors is associated with the publication of Intermediate Accounting Volume 3?
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Study Notes
Statement of Financial Position
- The statement of financial position is a fundamental financial document that summarizes a company's assets, liabilities, and equity at a specific point in time.
- Key classifications in the statement include current and non-current assets and liabilities, as outlined in the Philippine Accounting Standards (PAS) No. 1.
Learning Outcomes
- Students will identify classifications in the financial statement and related items.
- Ability to prepare a classified statement of financial position per PAS No. 1.
- Understanding of necessary information for notes to the financial statements.
Classifying Assets
-
Current Assets:
- Cash or cash equivalents (unless restricted).
- Held for trading purposes.
- Expected to be realized, sold, or consumed within the operating cycle or within 12 months post-reporting date.
- Non-current Assets: All other assets not meeting current asset criteria.
Classifying Liabilities
-
Current Liabilities:
- Expected to be settled in the normal operating cycle or within 12 months after the reporting date.
- Held for trading purposes or lacks an unconditional right to defer settlement beyond 12 months.
- Non-current Liabilities: Other liabilities that do not meet current criteria, including those refinanced under existing agreements.
Special Cases in Liability Classification
- Long-term debt due within 12 months can remain classified as non-current if refinancing is at the entity’s discretion.
- Liabilities payable on demand due to a breach of a long-term agreement are classified as current, despite potential lender concessions post-reporting.
- Non-current classification applies if lenders agree to a grace period of at least 12 months to rectify breaches.
Presentation Guidelines
- Present material items by nature or function separately.
- No prescribed format or sequence for presenting current and non-current items.
Sub-classification of Assets
-
Trade and Other Receivables:
- Include due amounts from trade customers, related parties, and accrued income.
-
Inventories:
- Comprised of items for sale, in production, or consumable materials.
- Property, Plant, and Equipment are classified by relevance.
Sub-classification of Liabilities
-
Trade and Other Payables:
- Include amounts due to trade creditors and related parties, deferred income, and accruals.
- Provisions for employee benefits and other financial provisions should be shown distinctly.
Equity Classifications
- Include paid-in capital, share premium, retained earnings, and comprehensive income items.
- Provide details such as number of shares authorized, issued, par value, and treasury shares.
- Reservations for future share issues must be described along with associated terms.
Format of Statement of Financial Position
- No specific format dictated by PAS 1; flexibility in presenting current versus non-current assets and liabilities.
- Acceptable formats include net asset presentation or long-term financing approaches.
Performance Tasks
- Multiple-choice assessments will be conducted online, utilizing Google Classroom or alternative tools.
Learning Resources
- Various textbooks and Philippine Accounting Standards will guide students throughout the course and related tasks.
Additional Notes
- The learning module is compliant with educational purposes under copyright laws.
- Unauthorized duplication or distribution is prohibited and actionable under the law.
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Description
Test your knowledge on the Statement of Financial Position, a key document in financial accounting that outlines assets, liabilities, and equity. This quiz will cover classifications of current and non-current assets and liabilities according to Philippine Accounting Standards. Prepare to identify components and understand the framework for financial statements.