1.   On January 1, 20x1, Entity A receives a financial aid from...

1.   On January 1, 20x1, Entity A receives a financial aid from the government amounting to ₱1M as compensation for losses it has incurred on a recent calamity. How much income from government grant will Entity A recognize in 20x1? *

a)  1,000,000

b)  100,000

c)   53,334

d)  0

2.   Entity A receives land from the government conditioned that the land will only be used in Entity A's primary business activities and should never be sold. If in case, Entity A decides not to use the land in its primary business activities, it shall return the land to the government. Which of the following standards is least likely to be relevant in accounting for the land? *

a)  PAS 2

b)  PAS 16

c)   PAS 20

d)  All of these are relevant

3.   Government grants are recognized only when there is reasonable assurance that the entity *

a)  will comply with the conditions attaching to them

b)  the grants are received

c)   the grants will be received

d)  a and b

e)  a and c

4.   According to PAS 20 Accounting for Government Grants and Disclosure of Government Assistance, which of the following is a government grant? *

a)  Tax benefits

b)  Free technical or marketing advice

c)   Public improvements that benefit the entire community

d)  Provision of guarantees

e)  Noninterest-bearing loan from the government

5.   According to PAS 20 Accounting for Government Grants and Disclosure of Government Assistance, which of the following is not a government grant? *

a)  Aid from the government to compensate for casualty losses already incurred.

b)  Cash received from the government to be used to acquire land.

c)   Government procurement policy that is responsible for a portion of the entity's sales.

d)  Aid from the government to defray expenses which are yet to be incurred.