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ALL BOARD SUBJECTS

Easy

1. What are the two variables involved in the risk-return trade-off in managing the firms working
capital?
a. Current liabilities and long term liabilities
b. Liquidity and profitability
c. Current assets and fixed assets
d. Working capital and net working capital
2. Which of the following statements about the concept of measurement valuation in Accounting
is (are) true?
I. Under current GAAP, as a general rule, the primary basis of measurement of assets
upon acquisition is historical cost
II. There are some instances when assets are initially measured on the basis of fair value
III. The final valuation of assets and liabilities in the balance sheet are a mixture of cost and
values
IV. Under no circumstances is price-level accounting acceptable as an alternative
measurement in accounting in present-day GAAP
3. A, B and C executed a promissory note binding themselves to pay P9,000 to X,Y and Z. The note
is now due and demandable. Can the creditors proceed against A alone for the payment of the
entire debt?
a. No, each creditor can collect only P3,000 from A
b. Yes, either X, Y or Z can collect P9,000 from A
c. No, each creditor can collect only P1,000 from A
d. Yes, since the promissory note is silent with respect to the rights of the creditors, the
obligation is presumed to be solidary.
4. Which of the following is tracing?
a. Selecting a journal entry for a purchase, and then checking to see if there is a
corresponding purchase invoice
b. Looking through the cash receipts journal for unusual amounts
c. Selecting a journal entry for a purchase, then verifying that there is a receiving
document
d. Selecting a cancelled cheque and verifying that it was recorded in the cash
disbursements journal
5. On July 1, 2006, Cote and Harmon Company purchased a 2-year insurance policy and paid a
premium of P20,000. Cote and Harmon Company has a December 31 year end. Which of the
following statements about insurance expense or its related prepaid insurance account is true?
a. Under the cash basis of accounting, insurance expense for the year ended December 31,
2006 will be P5,000.
b. Under the accrual basis of accounting, there will be a balance of P10,000 in the prepaid
insurance account on December 31, 2006
c. Under the cash basis of accounting, there will be a balance of P15,000 in the prepaid
insurance account on December 31, 2006
d. Under the accrual basis of accounting, there will be a balance of P15,000 in the prepaid
insurance account on December 31, 2006
6. On January 1, 2001, Turner Inc., reports net assets of P480,000 although a building (with a 10
year life) having a book value of P260,000 is now worth P310,000. Plaster Corporation pays
P400,000 on that date for a 70% ownership in Turner. On December 31, 2003, Turner reports a
Building account of P245,000 while Plaster reports a Building account of P510,000. What is the
consolidated balance of the Building account?
7. The power to decide disputed assessments, refunds of internal revenue taxes, fees or other
charges, penalties imposed in relation thereof, or other matters arising under the Tax Code or
other laws or positions thereof administered by the BIR is vested in the ___________.
8. The voting requirement to increase or decrease capital stock.
a. Majority vote of the board of directors and consented by the stockholders representing
2/3 of the outstanding capital stock.
b. 2/3 vote of the board of directors with the consent of majority of outstanding capital
stock both voting and non-voting
c. Majority vote of the board of directors with the consent of majority of the outstanding
capital stock entitled to vote
d. Majority vote of the board of directors and written consent of 2/3 vote of the
outstanding capital stock entitled to vote
9. A 90 day, 15% interest bearing note was discounted to a bank at 18% after the note was held for
40 days. The proceeds received from the bank upon discounting would be the maturity value
less the discount at
a. 18% for 40 days
b. 18% for 50 days
c. 15% for 40 days
d. 15% for 50 days
10. Clear Day Corporation manufactures various glass products including a car window. The setup
cost to produce the car window is $1,200. The cost to carry a window in inventory is $3 per year.
Annual demand for the car window is 12,000 units. If the annual demand for the car window
was to increase to 15,000 units,
a. The number of setups would decrease
b. The total carrying costs would increase
c. The economic order quantity would decline
d. All of the above would occur

Easy

1. B
2. I, II, III
3. C
4. D
5. D
6. 79,000
7. BIR Commissioner
8. A
9. B
10. B