You correctly answered13out of30questions with an accuracy of43.33%.You gained190experience points!Question 1Entities which are holders of secondary licenses issued by a regulatory agency are not considered as SMEs. Which of the following is not among this type of entities?Securities dealer/broker and mutual fund companiesPublic utility companiesCommercial banks, investment houses, and finance companiesInsurance and pre-need companiesTheory of Accounts - SME (Easy)Question 2Consolidated financial statements of SMEs must include the financial statements of the entity and itsControlled special purpose entitiesSubsidiariesSubsidiaries and controlled special purpose entitiesAssociatesTheory of Accounts - SME (Average)Question 3In the separate FS of a parent company that qualifies as SME, investment in subsidiaries is accounted for by usingCost less impairment or equity methodCost less impairment, equity method or fair value with changes in fair value recognized in profit or lossEquity method or fair value with changes in fair value recognized in profit or lossCost less impairment or fair value with changes in fair value recognized in profit or lossTheory of Accounts - SME (Easy)Question 4Entities considered as holders of secondary licenses issued by a regulatory agency are not considered as SMEs. Which of the following is not among this type of entities?Insurance and pre-need companiesCommercial banks, investment houses and finance companiesSecurity dealer/broker and mutual fund companiesPublic utility companiesTheory of Accounts - SME (Easy)Question 5If an SME is unable to make a reliable estimate of the useful life of an intangible asset, the life is presumed to beFive yearsTwenty yearsIndefiniteTen yearsTheory of Accounts - SME (Easy)Question 6Which of the following is not considered as a basic financial instrument for SMEs?Cash and bank accountsOptions and warrantsCommercial paper and billsBonds and loans payableTheory of Accounts - SME (Easy)Question 7When is (was) the effective date of application of PFRS for SMEs in the Philippines?03 December 201301 January 201313 October 201301 January 2013Theory of Accounts - SME (Average)Question 8All business combinations entered into by SMEs shall be accounted for by applying theEquity methodPooling-of-interest methodPurchase of pooling-of-interest methodPurchase methodTheory of Accounts - SME (Easy)Question 9If an SME is unable to make a reliable estimate of the useful life of an intangible asset, the life is presumed to beIndefiniteTwenty yearsTen yearsFive yearsTheory of Accounts - SME (Easy)Question 10Under certain conditions, it is permitted for SMEs to replace both Statement of Comprehensive Income and Statement of Changes in Equity withStatement of Retained EarningsStatement of IncomeStatement of Changes in Equity-Related TransactionsStatement of Income and Retained EarningsTheory of Accounts - SME (Easy)Question 11Which of the following entities must not describe its financial statements as being in compliance with the PFRS for SMEs even if it is allowed by law to prepare its financial statements in accordance with PFRS for SMEs?IAn entity whose shares are traded in a public market

IIAn entity whose debt instruments(but nit its shares) are traded in a public market

IIIAn entity that is in the process of issuing its debt instruments (but not its shares) fro trading in a public market

I and II onlyI and III onlyI, II and IIIII and III onlyTheory of Accounts - SME (Average)Question 12What model is required in accounting for basic financial instruments of SMEs??Cost modelRevaluation modelFair value modelAmortized cost modelTheory of Accounts - SME (Average)Question 13An entitys first financial statements that conform to the PFRS for SMEs are presented for the year ended 31 December 20X4. Those financial statements include only one year of comparative information (i.e., 20X3). The entitys financial statements for the year ended 31 December 20X3 were presented in accordance with local GAAP. The entity is required to explain how the transition from the previous financial reporting framework to the PFRS for SMEs affected its reported financial position, financial performance and cash flows. To comply with this requirement, an entitys first financial statements that conform to the PFRS for SMEs must present a number of reconciliations. Which one of the following four reconciliations is not required to be disclosed?A reconciliation of its profit or loss in accordance with its previous financial reporting framework for 20X3 to its profit or loss in accordance with the PFRS for SMEs for 20X3A reconciliation of its profit or loss in accordance with its previous financial reporting framework for 20X4 to its profit or loss in accordance with the PFRS for SMEs for 20X4A reconciliation of its equity under its previous financial reporting framework to its equity in accordance with thePFRS for SMEsat 31 December 20X3A reconciliation of its equity under its previous financial reporting framework to its equity in accordance with the PFRS for SMEs at 1 January 20X3Theory of Accounts - SME (Difficult)Question 14Which of the following is not considered as other financial instrument for SMEs?Investments in non-convertible and non-puttable sharesDerivativesInvestments in convertible and puttable sharesHedging instrumentsTheory of Accounts - SME (Average)Question 15The following statements are based on intangible assets of SMEs:All intangible assets including goodwill are considered to have finite life.

Useful life of an intangible asset is presumed to be 20 years if a reliable estimate cannot be made

True, falseFalse, trueTrue, trueFalse, falseTheory of Accounts - SME (Difficult)Question 16If an SME is unable to make a reliable estimate of the useful life of an intangible asset, the life is presumed to beTwenty yearsTen yearsIndefiniteFive yearsTheory of Accounts - SME (Average)Question 17Which of the following is not a part of Other Comprehensive Income for SMEs?Some actuarial gains and lossesSome foreign exchange translation gains and lossesSome gains and losses of available-for-sale securitiesSome changes in fair values of hedging instrumentsTheory of Accounts - SME (Average)Question 18Which of the following accounting treatments is not allowed under PFRS for SMEs?Borrowing costs related to a qualifying asset being expensedinvestment in associates accounted by cost or fair value modelProperty, plant and equipment accounted for under the revaluation modelGoodwill being amortized over a period of 10 years.Theory of Accounts - SME (Average)Question 19What model is required in accounting for other financial instruments for SMEs?Fair Value modelRevaluation modelCost modelAmortized cost modelTheory of Accounts - SME (Average)Question 20Based on Philippine SEC rules, which is not among the criteria to qualify as SMEs?Entities with total liabilities between P 3 million and P 250 millionEntities with total assets between P 3 million and P 350 millionPublic utility companies or holder of secondary licenses issued by a regulatory agencyEntities which are not in the process of filing FS for purposes of issuing any class of instrument in a public marketTheory of Accounts - SME (Easy)Question 21Entities which are holders of secondary licenses issued by a regulatory agency are not considered as SMEs. Which of the following is not among this type of entities?Public utility companiesInsurance and pre-need companiesCommercial banks, investment houses and finance companiesSecurities dealer/broker and mutual fund companiesTheory of Accounts - SME (Average)Question 22An entity shall disclose in the summary of significant accounting policies:the measurement basis used on preparing the financial statementsall of the measurement bases and the accounting policy choices available to the entity (ie specified in the PFRS for SMEs) irrespective of whether they were used by the entity in preparing its financial statementsthe measurement basis (or bases) used in preparing the financial statements and the accounting policies used that are relevant to an understanding of the financial statements.all the measurement bases and the accounting policy choices available to the entity irrespective of whether they were used by the entity in preparing its financial statements.Theory of Accounts - SME (Average)Question 23Investment property of SMEs whose fair value cannot can be measured reliably without undue cost or effort shall be accounted for asProperty, plant and equipment using revalued amountsNon-current assets held for sale using the lower of carrying amount or net selling priceInvestment property using revalued amountsProperty, plant and equipment using cost-depreciation-impairment modelTheory of Accounts - SME (Average)Question 24Under certain conditions, it is permitted for SMEs to replace both Statement of Comprehensive Income and Statement of Changes in Equity with a singleStatement of Changes in Equity-Related TransactionsStatement of IncomeStatement of Income and Retained EarningsStatement of Retained EarningsTheory of Accounts - SME (Average)Question 25Which of the following is not true concerning size criteria for SMEs?The floor for both assets and liabilities of an SME is P3,000,000If an SME is using the fiscal year as its accounting period, the entity shall apply the size criteria using the audited financial statements of the immediately preceding yearThe ceiling for total liabilities of an SME is P250,000,000The amount of total assets and total liabilities shall be based on the entitys audited financial statements on December 31, 2010Theory of Accounts - SME (Average)Question 26The following statements are from PFRS of SMEsIPPE of SEMs shall be accounted for using the cost model or revaluation model

IIInvestment properties of SMEs shall be accounted for using the cost model or fair value model

IIIIntangible assets of SMEs shall be accounted for using the cost model or revaluation model

All statements are trueAll statements are falseOnly statement II is trueOnly statement I is trueTheory of Accounts - SME (Difficult)Question 27The following statements are based on PFRS for SMEs:ISMEs are entities that do not have public accountability.

IISMEs are entities that publish general purpose financial statements for external users.

IIISMEs are entities that publish special purpose financial for internal users.

Only statement 1 is trueOnly statement 3 is falseOnly statement 2 is trueOnly statement 1 is falseTheory of Accounts - SME (Average)Question 28SMEs shall presentThe statement of financial position more prominently than other statementsThe statement of comprehensive income more prominently than other statementsThe statement of cash flows more prominently than other statementsEach financial statement with equal prominenceTheory of Accounts - SME (Easy)Question 29The following statements are based on PFRS for SMEs:IAn entity has public accountability of its debt or equity instruments are traded in a public market

IIAn entity has public accountability if it is in the process of issuing debt or equity instruments for trading in a public market.

IIIAn entity has public accountability if it holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses

True, false, trueTrue, false, falseTrue, true, trueTrue, true, falseTheory of Accounts - SME (Average)Question 30An entity is not publicly accountable must make an explicit and unreserved statement of compliance with the PFRS for SMEs:If the entity complies with the national GAAP based on PFRS for SMEs with some specific differencesIf the entity complies with the vast majority of the requirement of PFRS for SMEsIf the entity complies with all the requirements of PFRS for SMEsIf the entity complies with full PFRSTheory of Accounts - SME (Difficult)