ACCT201A Intermediate Accounting 1 Past Paper PDF (Jan 29, 2024)

UNIVERSITY OF ST. LA SALLE – BACOLOD Yu An Log College of Business and Accountancy ACCT201A – Intermediate Accounting 1 (with Conceptual Framework) 29 January 2024 Midterm: Q...

UNIVERSITY OF ST. LA SALLE – BACOLOD Yu An Log College of Business and Accountancy ACCT201A – Intermediate Accounting 1 (with Conceptual Framework) 29 January 2024 Midterm: Quiz No. 1 Financial Reporting and Accounting Standards Conceptual Framework for Financial Reporting (Chapters 1 to 4) Read the following items and select the best answer. Write the CAPITAL LETTER of your choice in your YELLOW PAPER. NO ERASURE / ALTERATION IN ANY FORM. Cover your paper at all times. Do not write on the back of your YELLOW PAPERS. (2 points each) 1. The International Accounting Standards Board d. To assist the Board of Accountancy in was formed promulgating rules and regulations affecting a. To establish accounting standards for the accountancy profession. multinational entities b. To develop accounting standards for 6. Which is a purpose of the Conceptual countries that do not have their own Framework? standard-setting bodies a. To assist the IASB to develop IFRS. c. To enforce IFRS in foreign countries b. To assist preparers to develop accounting d. To develop a single set of high-quality IFRS policy when no Standard applies to a particular transaction. 2. Which statement is true regarding managerial c. To assist all parties to understand and accounting and financial accounting? interpret IFRS. a. Managerial accounting has a future focus. d. All of these can be considered a purpose of b. Managerial accounting is generally more the Conceptual Framework. precise. c. Managerial accounting need not follow 7. Which statement is not true about the GAAP while financial accounting must Conceptual Framework for Financial Reporting? follow GAAP. a. In case of conflict, the requirements of the d. The emphasis on managerial accounting is IFRS prevail over the Conceptual relevance and the emphasis on financial Framework. accounting is timeliness. b. Nothing in the Conceptual Framework overrides any specific IFRS. 3. Which is not a purpose of the Conceptual c. The Conceptual Framework is an IFRS. Framework? d. The Conceptual Framework describes the a. To provide specific guidelines for resolving concepts for general purpose financial situations not covered by existing reporting. accounting standards. b. To assist accountants in selecting among 8. Managerial accounting emphasizes alternative and reporting methods. a. Reporting financial information to external c. To assist IASB in the standard-setting users process. b. Reporting to the Securities and Exchange d. To provide definitions of key terms and Commission concepts. c. Combining accounting with data processing d. Developing accounting information for use 4. A Conceptual Framework should within an entity a. Lead to uniformity of financial statements b. Eliminate alternative accounting principles. 9. IFRIC Interpretations issued by IASB c. Define the basic terms and concepts of a. Are considered authoritative and must be accounting. followed. d. Guide multinational entities in developing b. Cover newly identified financial reporting GAAP. issues not specifically addressed. c. Cover issues with conflicting interpretations. 5. Which is not a purpose of the Conceptual d. All of these are true about IFRIC Framework? Interpretations. a. To assist users of financial statements in interpreting the Standards. 10. The International Accounting Standards Board b. To assist preparers of financial statements a. Was the predecessor to the IASC. in applying the Standards. b. Promotes the use of high quality and c. To assist preparers of financial statements understandable global accounting in developing an accounting policy when a standards. Standard allows an accounting policy c. Has its headquarters in Geneva. choice. d. Can overrule the USA GAAP. Page 1 of 3 11. Accounting standard-setting 17. Which violates the concept of faithful a. Is a legalistic process. representation? b. Is democratic in the sense that a majority of a. Expected risks are not reported. accountants must agree. b. Property, plant and equipment with carrying c. Can be described as a political process amount increased to management estimate which reflects political actions of various of market value. interested user groups. c. Management reports regularly refer to new d. Is based solely on research and empirical projects. findings. d. Financial statements were issued nine months late. 12. What is a possible danger if politics plays too big a role in developing IFRS? 18. Which statement about materiality is not true? a. Individuals may influence the standards. a. The relevance of information is not affected b. Accounting standards are not truly generally by its nature and materiality. accepted. b. An item must make a difference or it need c. User groups become active. not be disclosed. d. The IASB delegates its authority to elected c. Materiality is a matter of relative size or officials. importance. d. An item is material if the inclusion or 13. What is due process in the standard-setting by omission would influence the judgment of a IASB? primary user. a. IASB operates in full view of the public. b. Public hearings are held on proposed 19. Which best describes the cost-benefit standards. constraint? c. Interested parties can make their views a. Cost of providing financial information is not known. always evident or measurable but must be d. All of these are part of due process in considered. standard-setting. b. The evaluation of cost constraint is not a judgmental process. 14. The IASB employs a due process system which c. The benefit of the information must be a. Enables interested parties to express their greater than the cost of providing it. views on issues under consideration. d. Financial information should be free from b. Identifies the most important accounting cost. issues. c. Requires that all CPAs must receive a copy 20. Which statement is not true concerning the of IFRS. Conceptual Framework? d. Is an efficient system for collecting dues a. The Conceptual Framework should be a from members. basis for standard setting. b. The Conceptual Framework should allow 15. During a period when an entity is under the practical problems to be solved more direction of a particular management, financial quickly. reporting will directly provide information about c. The Conceptual Framework should be a. Entity performance but not management based on fundamental truth derived from performance law. b. Neither entity performance nor d. The Conceptual Framework should management performance. increase users’ understanding and c. Both entity performance and management confidence in financial reporting. performance d. Management performance but not entity 21. Which is not an objective of financial reporting? performance a. To provide information about assets and claims against those assets 16. What is the authoritative status of the b. To provide information useful in assessing Conceptual Framework? sources and uses of cash a. In the absence of a standard or an c. To provide information useful in lending and interpretation that specifically applies to a investing decisions transaction, management shall consider the d. To provide information about liquidation applicability of the Conceptual Framework in value of an entity developing and applying an accounting policy that results in information that is 22. Allowing entities to estimate rather than relevant and reliable. physically count inventory at an interim period is b. The Conceptual Framework apples only an example of a tradeoff between when the IASB develops new standards. a. Timeliness and verifiability c. The Conceptual Framework has the highest b. Neutrality and consistency level of authority. c. Verifiability and comparability d. In the absence of a standard or an d. Timeliness and comparability interpretation that specifically applies to a transaction, the Conceptual Framework 23. A reporting entity shall be followed. a. Can be a single entity b. Can be a portion of a single entity Page 2 of 3  c. Can comprise of more than one entity 27. Which is not of purpose of a Conceptual d. All of these can be considered a reporting Framework? entity a. To enhance comparability of financial statements across entities 24. Which statement is true in relation to the b. To assist regulatory agencies in issuing enhancing qualitative characteristic of rules and regulations for a particular industry understandability? c. To enable the accountancy profession to a. Users are expected to have significant solve more quickly emerging practical business knowledge. problems b. Financial statements shall exclude complex d. To provide a foundation from which to build matters. more useful financial accounting standards c. Users have a reasonable knowledge of business and economic activities and 28. Objectivity is assumed to be achieved when a review the information with reasonable transaction diligence. a. Involves an arm's length transaction d. Financial statements shall be free from between two independent parties material error. b. Allocates revenue and expenses in a rational and systematic manner 25. The Conceptual Framework is intended to c. Is recorded in a fixed amount of pesos establish d. Involves the payment or receipt of cash a. GAAP in financial reporting. b. The objectives and concepts for use in 29. Which basic assumption may not be followed developing standards of financial when an entity in bankruptcy reports financial accounting and reporting. statements? c. The hierarchy of sources of GAAP. a. Economic entity assumption d. The meaning of “present fairly in b. Going concern assumption accordance with GAAP”. c. Periodicity assumption d. Monetary unit assumption 26. Which is not true about financial reporting? a. Financial reporting shall not provide 30. Financial reporting pertains to information useful in evaluating a. Individual business entities, rather than to management stewardship. industries or an economy as a whole or to b. Financial reporting shall provide information members of society as consumers useful in investment, credit and similar b. Individual business entities and an economy decisions. as a whole or to members of society as c. Financial reporting shall provide information consumers useful in assessing cash flow prospects. c. Individual business entities and an economy d. Financial reporting shall provide information as a whole, rather than to industries or to about entity resources, claims against those members of society as consumers resources and changes in them. d. Individual business entities, industries, an economy as a whole and members of society as consumers x x x N O T H I N G F O L L O W S x x x Page 3 of 3