May 2014 Batch TAPW - 275 IMPORTANT! These preweek tecture materials shall be deemed incomplete without revisiting ALL multiple-choice questions indicated in the following: ve Tabw = 371" femphasis: fnancal statements, basic concepts and principles, note disclosures, adjusting/reversing entries, operating segments, interim reporting) TAPW ~ 272'(emphasis: brological assets and agricultural produce) TAPW ~ 273 (emphasis. financia! mstruments and investment property) TAPW - 274 (emphasis: SMEs, insurance, leases, deferred taxes and other Habilities) TA ~ 270 (Small and Medium Entities - SMES) TA First & Final Preboard Exams (al items) Mock CPA Board Exam for Theory of Accounts, ALSO! Take time to read for the last time the TA lecture notes, including related multiple- choice questions, oh the following topics: ¥ Conceptual Framework for Financial Reporting (2010) ~ page 2 rrr ¥ PERS 5: Non-Current Assets Hela for Sale & Discontinued Operations ~ page 6 PAS 34: Interim Financial Reporting - Page 11 PERS 8: Operating Segments - page 12 “Small & Medium Entities (SMEs) ~ pages 17 to 24 ¥ PAS 29: Financial Reporting in Hyperinflationary Economies ~ page 26 ___CONCEPTAUL FRAMEWORK OLD | CONCEPIUAL FRAMEWORK 2010 (New) 1} “Scape (4) - Scope (39 1) Objective of F nancial Statements Ly Objectives of Financkal Reporting, 2) Qualitative Characteristics of Financial Sa 2) Oualative Characteristics 08 TS 3) Cements of Financial Statemenis 3) Liements of Linanctal Statements 4) Concepts of Capial and Capital Maintenance 4) Concepts of Capital and Capital Maintenance wing Fonts (NOT detads aad vet aaahte) t ‘Quatnative Characteristics of Useful Financial Into | Relevance (deals with CONTENT) V) Relevance FUNDAMENTAL characteristi) fe Tintin ~ Confimatery«teebach) value | beedhaek val | + Protictive value 201 situ Representation (FUNDAMEN TAL char) 2) Reliability (deals with CONTENT | reed from Eero | 7 ¥ Falta representation Neutrality J} & Substance ver form ¥ Completeness 1+ prudence 3) Comparabilty (ENILANCING characteritiy |S Neweatny | 4) Undersandabilty (ENHANCING characteristic) | > Completeness 5) Timeliness (LNTTANCING characteristic) | 3)Comparability (deals with PRESENTATION) 6) Veriabsity (ENIIANCING characteristic) | 4) Understandably (deals with PRESEN _f Tinderiying Assumptions (2) Underlying Asstiniption: Going concem - | 1) Accrual basis (NOME: eerual ais of accounting Is mentioned in 2) Going concer = _.1__the “objectives of financial rept HYRUE.G) LEVLLS OF THE CONCEP TLIAL FRAMLWA 4 TIRS Level Objectives of Fined Repo ‘Wirt evel dea with the"Whry 07 Pur of Ace ¥ SECOND Level (11 Quaitative Charatertics of inanra armati (2) Edom Seven level serves asthe bre twee Fit and Thad evel THIRD tevel: Assumptions. Priniples and Contant ke mls Kecoanitinn, Mowcment & Dielosane {1nd eve eas wih the How" othe lnplencntatan pcan af Aevountoegy De eSAPE Cone ASSUMPLIONS(T | PRINCIPLES (a) = Teanomie enti 1 Measurement Principles RK OF FINANCIAL REPORTING ‘oF Financial Statements TL Consin tins ice : | 2. Going eoncer fiecenu tar tee) fw 3. Monetary unt | 2. Revene Revaaton Pincpley fo Misery 4 Perodicny: | Db xpense Reco: { S Acct | yal let i ot | text a Page 1 of 18 pages t i | |RESO - The Review School of lecourdoney TAPW-275 1 ‘PREWEEK MATERIALS in THEORY of ACCOUNTS (ay 2014 Batct) - Page @ 1p SONCERTUALERAMEWORK sisi Rf 74 284 mo et 1. Which isa basi purpose of the Conceptial Framework of Financial Reporting? To develop a single set of high qualty international Firsncial Reporing “To promulgate rules and regulations affecting the pratie ofthe Phippine . Tovaddress aceounting issues with divergent and unacceptable treatmen auiborzative guidance rsved by FRSC A To ossst prepares of nancial statements in applying acc 3 that have et to forms the subject of accounting standards 2. The objectives of financial reporting for business enterpries are based on ut. Theneed for conservative informa The needs of the users ofthe itor |e) The need to report on management Themed to comply wih finance D Under the Coveepal Framework foe F toprovide Financial reporting about the report ‘ a Existing and potential invests b. Existing investors lenders and other creditors €. Potent investors. lenders and oie reditors ‘Accou nts in the absence of an ng standards and in dealing with issues seanning standards ‘010, the objective of general purpose Financial reporting is 8 5, ‘The second level in the Conceptual Framework if eee “reliably” chartteristic under the ol Concept Framework? a. Pree Substance over fem &.Verifobil 4. Faihvulrepresentaion (C—& Which two charters of finan tof te "iablty” chaaeteristic under the old Concent Framework that are no Tonge ep jth representation” chravterstic under the Conseptal ial information are itly part of th Framework for Financial Reporting 20102 ‘a. Prudence and nesitality .” Prudence and substange over form b, Completeness and neutrality &. Coimpleteness and substance over form 4 9. Under the Conceptual Framework for Financial Reporting 2010. itis an entity-specific aspect of relevance based 09 the nature and magnitude, or both, ofthe items to which the information relates in the contest of an individual entity's financial report vac Materaity Predictive value 8 Feedback value 4. Confirmatory value 10, Under the IFRS Framework (2010), it s the ability through eonsensus among independent observers Wo ensure that Francia information represents what it purports to represen. wi Relevance ce. Comparability be Verifabily &. Feedback value B 11. (OLD) Whit oF the following isnot considered as a primary characteris of Financial information? ‘a, Newly © Completeness b 4% Comparability Viele 12, Which ter best describes information that in tuenees the economic decisions of wsers? a Reliable ; Relevant b. Prospective Understandable A 13. fsuanee of interim financial statements fs an example ofa tadesoff between A Roleane ond iii ec. Timeliness and materiality lability and periicity &. _Understardabilty and tnitiness D4 Wichofthe lowing rns dsorhing infront anc statement are rapa ate? i 2. Unierstandate and comparable 6. Prien and relevant b. Reliable and verifiable 4S. Unbiased and neutral ae a hee Eo k smercseni > ' i i : i 16. wh & a Which amon 4 * 4 Finanesal accounting eats he brits timed 3s the area wf secoutng st Yhrpene ane al tame wed Py prey meri te the ines comer ly ne the following istrue mn relation to enderstenksbeits KeS0- the Review School of QccowTeney PREWEEK MATERIALS n THEORY of ACCOUNTS (May 2014 Bach) Page? {sere souk sty the weet ih seasonal diligence ser are expected have signa Business kno eb Frmancial satements should excl compiee "inane sat Assots Lilies » Capa Ascsts Lilien Capit Assets Liahites «Preferred SH. Common SH Asset = Lisbilien Capita propa ivan atc Be ed ty Snes is 1 aliow mg equations bes evemplifie the FNLIEY theo of accounting TAPW-275 © General purpose Financial statement to he ses By parties Peat mtn aad externa 9 ke Benes 4, Financil satements to be ased prints By manazcnens (OLD) Which of the following Used he Framesork as koe asamp 1 ‘a. The Financia statonents are tohbie Any chines of acon pales are neutral The entity cam be viewed a a figating omc {85 the inant sacs ate prepa wr the-art BIS The eeonornie ents assumpion a Keynes pernadicicwine metswiement Fh Isapplicable wr smneorponitd businesses a 20, Which capital eancept retes the wse a carn est Base oF Kec SMALL MEDIUMESIZLDENTLETES ¢9 hs nancial capital ewe cB Phys capital concept s ‘Whew dl PERS tor SMI take int ete 49 Ye Plies Statement 1. SNM streets hs Pulte Statement HY-SSILS ae (0 Janwary 2011 OY Rana Om 01 annary 2010 Ah tavars 20008 his apy Bye an PERS Hoe SS Only statement His teas © Syectal puspone Fiiaia tacnent for ternal ser 0 1 ae {ny statement Ts eve Only stajonent His false ‘saved on PERS fe SMEs “Statomon 1 Aa entity ha public scons HS debt gully anstaments are Stureanent LE An entity as public acusumabiity 1 the cess of 8 ima paiie ma Starement HP An gnuiy bes pic account foursiders sone oF its uaa De b ase on Philipp b, h Truc, toe, wee Trae fie tre Truc, ae. fa True fie: tae 1 rales, wich of the fi Tuntties with total avets boiscon P Salhi and P Fitics with otal abilities tect P 3 ani Trntives that are notin the process ot fi pulie marke iow x P21 hon S fie pupae a iain Jbl or equily instru imiies woul 9 gay gs SMI? ine unity companion ev holes of scumadary Benes ised hy a eogulaay ape ‘ow dks vow cal. ay SMT that presents frst finanetal statements thas ctor PL irstime a c Fintime preset First-ine reporter do Tisctime compliee mi oF asin to PERS for SMI 5 be Fhe statement a i “Opening atement nt (naga position Las bb Closine st inant posit Which ofthe fatto a Prnlewee b. Comiseney A Mstanee betacon hon Which is met consul h 4 cel a th Compr ane ttt O41 SMI? Some ata gael hws Senenciyn xchange ttn si an ses Strm cavgss nf vas of fn ate Some pm and ses asl sae sccuntes / 8 ED Page 3 of 18 pages: mot fin RS tor SMI? nt slessribod ‘Finacial pan sing Fea tates? oventizes the heal aypects aE Business EMITS rap al fn Dass nga ans tran a phys sata ees Neier tinanctal or pls ical capa cep cade ina public mathet ots Wor ta wing AF hols assets iw a fuciary capety for a broad rou a