I. True or False: Write TRUE if the statement is correct, if not, write FALSE otherwise. Erasure means wrong.
______1. Disclosures of information about judgment in the financial information are elective. FALSE. Mandatory sya
hindi optional/elective.
______2. PAS 1 also known as Presentation of Financial Statements is the accounting standard that guides all the
presentation, content and disclosures of Financial Statements. FALSE. Hindi lang PAS 1. May PAS 7 pa a.k.a
STATEMENT OF CASH FLOWS. Which is ang Cash Flow ay isa rin sa mga Financial Statement.
______3. Medium sized entities shall use PFRS/IFRS for SMEs. TRUELAGEN.
______4. Notes Payable due within 12 months refinanced after the end of reporting period is classified as non-current
liability. FALSE. On or before BS date dapat para yung currently maturing notes payable ay di mo muna
mabayaran agad at mapaikot mo pa yung pera na dapat pang bayad. Kapag ka after ka ng BS Date nag refinance,
wala kang kawala kung di bayaran na within a year yung Notes Payable mo, payable in demand na si akl a.
______5. Generally, Prepaid expense is classified as non-current asset. FALSE. Prepaid Expense is generally
classified as current assets because they represent payments made in advance for goods or services that will be
consumed or utilized within the company's normal operating cycle, usually within 12 months. The default
classification is current asset unless specific circumstances justify a non-current classification.
II. Multiple Choice: Write the best answer of your choice BEFORE the number. Erasure means wrong.
6. Cash advances and loans made by a financial institution are usually classified as
A. Financing activities
B. Investing activities
C. Operating activities - Ang Financial Institution ay best example ay Banks na ang NORMAL OPERATION or
ORDINARY COURSE OF BUSINES ay magpautang. Kaya yung cash flow from cash advances and loans ng mga
gantong entity ay under OPERATING ACTIVITIES.
D. Component of cash and cash equivalents.
7. What is one criticism not normally aimed at a statement of financial position?
A. Failure to reflect current value information - This is a common criticism of the balance sheet. Many items on the
balance sheet are valued at historical cost rather than their current market value, which can make the balance
sheet less reflective of the company's true financial position in the present market environment.
B. An extensive use of estimate - This is a valid criticism. The balance sheet often relies on estimates, such as for
bad debts, depreciation, or the valuation of certain intangible assets. These estimates can introduce subjectivity
and may not always reflect the actual financial position.
C. Failure to include items of financial value that cannot be recorded objectively - This is another common criticism.
Certain valuable assets, such as human capital, brand value, or intellectual property (Intangible Assets – PAS 38)
not recognized on the balance sheet, are not included because they can't be reliably measured or objectively
recorded.
D. The extensive use of separate classifications - This is not a typical criticism of the statement of financial position.
In fact, classifications like current vs. non-current, or by asset type (e.g., tangible vs. intangible), provide clarity
and help users understand the structure of the company's financial position. Rather than being a criticism, this is
a positive feature.
e. none of the above
8. The limitations of the income statement include all of the following, except
A. Items that cannot be measured reliably are not reported.
B. Income numbers are affected by the accounting method.
C. Income measurement involves judgment.
D. Only actual amounts are reported in net income - net income includes estimates and non-cash items (such as
depreciation, amortization, or provisions). Many figures in the income statement are based on estimates and
judgments, not just "actual" amounts. For example, an accrual for future warranty claims or depreciation is
included in net income even though these are not actual cash transaction.
E. none of the above
9. The income statement reveals
a. Resources and equity at a point in time.
b. Resources and equity for a period of time.
c. Net earnings for a period of time. - kapag income statement or nominal accounts, “for” a specific period lang
pinapakita nila kase sinasara sila kada period.
d. Net earnings at a point in time.
10. An enterprise should prepare a cash flow statement and should present it as
a. Integral part of the enterprise‟s basic financial statements - Nasa PAS 1 ito minentioned.
b. Note to financial statement
c. Supporting schedule for amount appearing as cash
d. Supplementary financial statement
e. none of the above
III. Problem Solving (5 Points each)
The following totals are taken from the December 31, 2023 balance sheet and income statement of Eabab Company:
Current Assets—P4,500,000; Noncurrent Assets—P10,000,000; Current liabilities—P2,000,000; Noncurrent liabilities—
P3,700,000; Revenues—P5,500,000; Costs and Expenses—P4,000,000. Additional information:
• Accounts payable amounting to P540,000 was net of P122,000 suppliers’ debit balance.
• Cash in bank amounting to P600,000 was net of P50,000 bank overdraft.
• Accounts receivable amounting to P800,000 was net of P145,000 customers’ credit balance .
• Checks totaling P100,000 payable to suppliers were written and recorded on December 29, 2023 but were
mailed on January 10, 2024.
Pre-Test: INTERMEDIATE ACCOUNTING 3: Presentation of Financial Statements
nd SEMESTER – A.Y. 2024-2025
1. The total Current Assets amounted to? Answer: 4,917,000
Last Na Lang entity provided the following information for the current year:
Increase in raw materials inventory 150,000
Decrease in goods in process inventory 200,000
Decrease in finished goods inventory 350,000
Raw materials purchased 4,300,000
Direct labor payroll 2,000,000
Factory overhead 3,000,000
Freight out 450,000
Freight in 250,000
2. What is the cost of goods sold for the current year? Answer: P9,950,000
