28688573-Quiz-Bee-pa1-amp-Toa-difficult

28688573-Quiz-Bee-pa1-amp-Toa-difficult - 2 ND RFJPIA-R12...

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RFJPIA-R12 2 ND Annual Regional Convention 2008 DIFFICULT ROUND 1. During the year ended 31 December 20X8 the following events occurred at The Gosling Company: (1) It was decided to write off PHP80,000 from inventory which was over two years old as it was obsolete. (2) Sales of PHP60,000 had been omitted from the financial statements for the year to 31 December 20X7. According to IAS8 Accounting policies, changes in accounting estimates and errors, how much should be shown as a prior period adjustment in Gosling's financial statements for the year to 31 December 20X8? A PHP60,000 B PHP140,000 C PHP80,000 D PHP20,000 Question 7 - A The correct answer is PHP60,000. IAS8 para 32's list of examples of changes in accounting estimates includes inventory obsolescence. 2. One of the conditions that must be satisfied in order to recognize revenue in a transaction involving the rendering of services is that the stage of completion of the transaction at the end of the reporting period can be measured reliably. Which TWO of the following methods for determining the stage of completion of a contract involving the rendering of services are specifically referred to in IAS18 Revenue , as being acceptable? A Costs incurred to date as a percentage of the estimated total costs of the transaction B Advances received to date as a percentage of the total amount receivable C Surveys of work performed D Revenue to date divided by total contract revenue IAS18 para 24 permits surveys of work performed and costs incurred to date as methods of apportioning revenue on service contracts. 3. How should trade discounts be dealt with when valuing inventories at the lower of cost and net realizable value (NRV) according to IAS2 Inventories ? (select one answer) A Added to cost B Ignored C Deducted in arriving at NRV D Deducted from cost Question 7 - D
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Trade discounts should be deducted from cost. See IAS2 para 11. 4.
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This note was uploaded on 08/12/2010 for the course ACC 452 taught by Professor Mr.cula during the Spring '10 term at Abraham Baldwin Agricultural College.

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28688573-Quiz-Bee-pa1-amp-Toa-difficult - 2 ND RFJPIA-R12...

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