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Which is subject to creditable withholding tax?
a. Winnings
b. Dividends
c. Professional fees
d. Royalties
The date of the audit report is important because
a. This is the date when the auditor's responsibility for subsequent events ends
b. This date coincides with the date of the financial statements
c. PSAs require all audits to be performed on a timely basis
d. The auditor bills time to the client up to and including the audit report date, and the statement to the
client should reflect this date
B ordered from S a pair of shoes of the kind and style of which S has gone out of stock. There is:
a. Contract for a piece of work
b. Contract of lease of service
c. Contract of agency
d. Contract of sale
Jordan Manufacturing Company expects to incur the following per unit costs for 1,000 units of production:
Direct Materials 3 lb @ P5 = P15
Direct Labor 1hr @ P6 = P6
Variable Overhead 75% of direct labor costs
Fixed Overhead 50% of direct labor costs
What is the total amount of overhead included in the overhead budget?
Which of the following reports is not a component of the financial statements according to PAS 1?
a. Statement of Financial Position or Balance Sheet.
b. Statement of Changes in Equity.
c. Directors Report.
d. Notes to the Financial Statements.
As the acceptable level of detection risk decreases, the assurance directly provided from
a. Substantive tests should increase.
b. Substantive tests should decrease.
c. Tests of controls should increase.
d. Tests of controls should decrease.
Which one of the following is not required to be presented as minimum information on the face of the
balance sheet, according to PAS 1?
a. Investment property
b. Investments accounted under the equity method
c. Biological assets
d. Contingent Liability
The principles of a sound tax system exclude
a. Economic efficiency c. Theoretical justice
b. Fiscal adequacy d. Administrative feasibility
The Skousen Construction had two projects for which it reported the following as of the end of 2016:
NY Boston
Contract Price 2,400,000 480,000
2015: Costs Incurred 1,750,000
2015: Percent Completed 75%
2016: Costs Incurred 620,000 70,000
2016: Percent Completed 100% 15%
The company used the percentage of completion method of accounting revenue. How much is income from
construction for 2016?
18,000 loss
Statement A: Obligation to do is also known as negative personal obligation.
Statement B: Obligation no to do is otherwise known as positive personal obligation.
a. Statement A is true
b. Statement B is true
c. Both statements are true
d. None of the statements is true

With the country under incessant shortage of sugar, the Philippine Congress enacted a law providing tax
exemptions and incentives to cane farmers without at the same time granting tax exemptions to rice
farmers who produce the staple food of the Philippines. Is the new law valid?
a. Yes, since there is a valid classification of the taxpayers who would be exempted from tax.
b. Yes, since sugar is more important than rice.
c. No, since the grant of exemption is construed in favor of taxpayers.
d. No, because there is no uniformity in the grant of tax exemption.

__________________ is any form of commerce that is executed using information and communications

FRACTIOUS TROUBLESOME Company started construction of a new office building on January 1, 20x1,
and moved into the finished building on July 1, 20x2. Of the buildings 500,000 total cost, 400,000 was
incurred on 20x1 evenly throughout the year. FRACTIOUSs incremental borrowing rate was 12%
throughout 20x1, and the total amount of interest incurred by FRACTIOUS during 20x1 was 20,400. What
amount should FRACTIOUS report as capitalized interest at December 31, 20x1.

It is the act or omission by which a party violates a right of another:
a. Reason of action
b. Motive of action
c. Cause of action
d. Source of action

The CUPIDITY GREED Company acquired AVARICE GREED Company, a foreign subsidiary, on 10
September 2015. The fair value of the assets of AVARICE GREED Company was the same as their
carrying amount except for land where the fair value was TWD50,000 greater that carrying amount. The fair
value adjustment has not been recognized in the separate financial statements of AVARICE GREED
Company. Consolidated financial statements are prepared at the year-end of 31 December 2015 requiring
the transalation of all foreign operations results into the presentation currency(PHP). The following rates of
exchange have been identified:
Rate at 10 September 2015 TWD 1.62 : PHP 1
Rate at 31 December 2015 TWD 1.56 : PHP 1
Average rate for the year ended 31 December 2015 TWD 1.60 : PHP 1
Average rate for the period from 10 September to TWD 1.58 : PHP 1
31 December 2015

According to PAS 21, what fair value adjustment is required to the carrying amount of land in the
consolidated statement of financial position?

Three of the following enumerations are not authorized to issue no par value shares of stock. Which is the
a. Insurance companies
b. Industrial companies
c. Public utilities
d. Trust companies

A as agent of P with oral authority, sold Ps land in a public instrument. The sale is:

Which of the following statements is correct about an auditors required communication with an entitys
audit committee?
a. Any matters communicated to the entitys audit committee also are required to be communicated to the
entitys management.
b. The auditor is required to inform the entitys audit committee about significant misstatements
discovered by the auditor and subsequently corrected by management.
c. Disagreements with management about the application of accounting principles are required to be
communicated in writing to the entitys audit committee.
d. Weaknesses in internal control previously reported to the entitys audit committee are required to be
communicated to the audit committee after each subsequent audit until the weaknesses are corrected.

What amount of comprehensive income should HUBRIS ARROGANCE Corporation report on its statement
of comprehensive income given the following net of tax figures that represent changes during a period?
Actuarial gain or loss on defined benefit plan (6,000)
Unrealized gain on FVOCI Securities 30,000
Reclassification Adjustment for cumulative gain on
translation of foreign operation included in profit or loss (5,000)
Stock warrants outstanding 20,000
Profit for the year 154,000

A comfort letter issuance results from which engagement?
a. Agreed Upon Procedures
b. Compilation
c. Audit
d. Review

On December 31, 2012, SUBJUGATE ENSLAVE had capitalized costs for a new computer software
product with an economic life of five years. Sales for 2013 were 30% of expected total sales of the
software. At December 31, 2013, the software had a net realizable value equal to 90% of the capitalized
cost. What percentage of the original capitalized cost should be reported as the net amount on
SUBJUGATE ENSLAVEs December 31, 2013 balance sheet?

When reaction to a budget is negative, resulting in managerial behaviour that is negative for the
organization, the resulting behaviour is known as:
a. Dysfunctional behaviour
b. Psychopathic behaviour
c. Congruent behaviour
d. Sociopathic behaviour

Jinky is trying to decide whether to accept a bonus of 25% of net income after salaries and bonus or a
salary of 97,500 plus a bonus of 10% of net income after salaries and bonus as a means of allocating profit
among the partners. Salaries traceable to the other partners are estimated to be 450,000. What amount of
income would be necessary so that Jinky would consider the choices to be equal?

Hayden Co, a resident citizen, earned the following interest income gross of applicable taxes:

Interest income from PNB, a domestic bank P 40,000

Interest income from SVB, a domestic bank* 30,000
Interest income from THE, a non-resident foreign bank* 20,000
Interest income from XHE, a resident foreign bank* 10,000
*in Philippine Peso equivalent

Compute the amount of final tax.


During June, 12,000 pounds of materials were purchased at a cost of P8 per pound. If there was an
unfavourable direct materials price variance of P6,000 for June, the standard cost per pound must be

An insurance contract can contain both deposit and insurance elements. An example might be a
reinsurance contract where the cedent receives a repayment of the premiums at a future time if there are
no claims under the contract. Effectively this constitutes a loan by the cedent that will be repaid in the
future. PFRS 4 requires that:
a. Each payment by the cedent is accounted for as a loan advance and as a payment for insurance
b. The insurance premium is accounted for as a revenue item in the income statement.
c. The premium is accounted for under PAS 18.
d. The premium paid is treated purely as a loan, and it is accounted for under PAS 39.

The following relates to Gandabebe Co., a domestic corporation:

Minimum corporate income tax P 164,000

Allowable deductions 7,600,000
Creditable withholding tax 52,000
Estimated income tax payments 87,000

What is the income tax still due to be filed through BIR Form 1702-RT?

Which PSA covers the audit of financial statements prepared in accordance with special purpose
PSA 800

Market Structure Type # of Firms in Industry Barriers to Entry Uniqueness of Product
Perfect competition Many (a) Not Unique
Monopolistic (b) Some Unique Features
Oligopoly Few (c)
Monopoly Very High (d)

Fill in the correct responses for the blanks with letters:

a. Very Low Many High Very Unique
b. Very Low Few High Not Unique
c. Very High Few Low Fairly Unique
d. Low One High Very Unique

IFRIC 12 identifies two types of service concession arrangements. What should the operator record if it
receives a right to charge for use of a public sector asset that it constructs or upgrades and then must
operate and maintain for a specified period of time?
Intangible Asset