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Statement of Financial Position Quiz
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Statement of Financial Position Quiz

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Questions and Answers

What is one of the intended learning outcomes of the lesson on the statement of financial position?

  • Understand the role of auditors in financial reporting
  • Prepare a properly classified statement of financial position (correct)
  • Identify each classification in the income statement
  • Analyze cash flow statements in detail

    • Which item is NOT classified in the statement of financial position?

  • Revenue (correct)
  • Equity
  • Non-Current Liabilities
  • Current Assets

    • Which statement is true regarding the notes to financial statements?

  • They only summarize the cash transactions of the year
  • They are only required for public companies
  • They are optional and can be excluded
  • They provide additional context about financial information (correct)

    • Which of the following is not a common classification found in the statement of financial position?

    <p>Operating Expenses</p> Signup and view all the answers

    What does PAS No.1 provide guidelines for?

    <p>Preparation of financial statements including the statement of financial position</p> Signup and view all the answers

    What information is essential in the notes to financial statements?

    <p>Accounting policies and basis of preparation</p> Signup and view all the answers

    Which section would you find 'Current Liabilities' in?

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

    The primary purpose of preparing a classified statement of financial position is to:

    <p>Organize financial information for clarity</p> Signup and view all the answers

    Which of the following formats is NOT prescribed by PAS 1 for the statement of financial position?

    <p>A fixed format that must be followed</p> Signup and view all the answers

    What is an acceptable method of calculating long-term financing according to the content provided?

    <p>Fixed assets + current assets - short term payables</p> Signup and view all the answers

    Which of the following refers to shares that are not available for public trading?

    <p>Treasury shares</p> Signup and view all the answers

    Which item is NOT reserved for issuance under options according to the content?

    <p>Shares held by subsidiaries</p> Signup and view all the answers

    What is a characteristic of a net asset presentation in the statement of financial position?

    <p>It shows assets minus liabilities.</p> Signup and view all the answers

    In the context provided, what should properly identified accounting details include?

    <p>All supporting details should be addressed</p> Signup and view all the answers

    Which presentation method of liabilities is allowed according to PAS 1?

    <p>Liabilities can precede equity</p> Signup and view all the answers

    Under what condition is an asset classified as current?

    <p>It is cash or a cash equivalent unless restricted.</p> Signup and view all the answers

    What classification applies to liabilities expected to be settled within twelve months after the reporting date?

    <p>Current liabilities</p> Signup and view all the answers

    When can a liability be classified as non-current?

    <p>If there is an unconditional right to defer settlement for at least twelve months.</p> Signup and view all the answers

    How should trade and other payables be presented?

    <p>Separately, indicating amounts payable to trade creditors, related parties, and other provisions.</p> Signup and view all the answers

    What must be included in the presentation of share capital?

    <p>Number of shares authorized, issued, par value per share, and reconciliation of shares outstanding.</p> Signup and view all the answers

    Which of the following is NOT a criterion for classifying an asset as current?

    <p>It is held for long-term strategic investments.</p> Signup and view all the answers

    What is the implication of breaching a long-term loan agreement regarding liability classification?

    <p>The liability is classified as current even if a grace period is provided afterward.</p> Signup and view all the answers

    What aspect is essential for the correct subclassification of inventories?

    <p>They should state whether goods are ready for sale, in production, or materials for production.</p> Signup and view all the answers

    Which of the following is true regarding equity instruments in liability classification?

    <p>Settlement by issuing equity instruments does not affect classification.</p> Signup and view all the answers

    What is the result of making minor mistakes when assessing relevant standards and rules?

    <p>Correct identification of most standards</p> Signup and view all the answers

    What does it imply when a student fails to identify reliable measurement and disclosure criteria?

    <p>The student is unable to properly conceptualize the problem</p> Signup and view all the answers

    How is an acceptable job of analogizing described in the assessment?

    <p>Correctly analogizing with minor mistakes present</p> Signup and view all the answers

    What could result from making one or more major mistakes in measurement and disclosure?

    <p>Significant gaps in the understanding of criteria</p> Signup and view all the answers

    What is indicated when a student assesses all relevant standards successfully?

    <p>A comprehensive mastery of the content</p> Signup and view all the answers

    What does it mean if a student makes major omissions when assessing standards?

    <p>The student is likely confused about the standards</p> Signup and view all the answers

    What is the consequence of failing to analogize rules to new situations?

    <p>Inability to make connections between different rules</p> Signup and view all the answers

    What does the identification of most relevant standards but still making minor mistakes suggest?

    <p>The student understands some aspects, but not all</p> Signup and view all the answers

    Which organization is responsible for issuing the International Accounting Standards (IAS)?

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

    What is the primary purpose of the learning module mentioned in the content?

    <p>To provide educational resources for teaching and learning</p> Signup and view all the answers

    What does R.A. 8293 emphasize regarding copyrighted works?

    <p>Fair use for educational purposes is not an infringement</p> Signup and view all the answers

    Which of the following is NOT a source of accounting standards listed in the content?

    <p>US Generally Accepted Accounting Principles (GAAP)</p> Signup and view all the answers

    Which institution is indicated as certified by ISO 9001:2015?

    <p>Laguna State Polytechnic University (LSPU)</p> Signup and view all the answers

    What could happen if someone unauthorized reproduces or uses the learning module?

    <p>They will face civil and criminal prosecution</p> Signup and view all the answers

    Which type of use is explicitly allowed under section 185 of R.A. 8293?

    <p>Teaching with multiple copies for classroom use</p> Signup and view all the answers

    Which of the following authors is associated with the publication of Intermediate Accounting Volume 3?

    <p>Millan, Zeus Vernon B</p> Signup and view all the answers

    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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    Related Documents

    Module-2-Intermediate-Accounting-3.pdf

    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.

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