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ACCGOVP > Chapter 6: Financial Assets > Flashcards

Chapter 6: Financial Assets Flashcards

1
Q

Any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.

A

Financial Instrument

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2
Q

Any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.

A
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3
Q

A contractual right to receive cash or another financial asset from another entity.

A

Financial Asset

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4
Q

A contractual right to exchange financial instruments with another entity under POTENTIALLY FAVORABLE conditions.

A

Financial Asset

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5
Q

A contractual obligation to deliver cash or another financial asset to another entity.

A

Financial Liability

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6
Q

A contractual right to exchange financial instruments with another entity under POTENTIALLY UNFAVORABLE conditions.

A

Financial Liability

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7
Q

Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

A

Equity Instrument

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8
Q

The most basic financial instrument and is also the medium of exchange.

A

Cash

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9
Q

Initial Recognition of Financial Assets

A

Recognized when an entity becomes a party to the contractual provisions of the instrument.

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10
Q

Initial Measurement of Financial Assets

A

Fair Value + Transaction Costs, except for Financial Assets at FV through Surplus or Deficit

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11
Q

Incremental costs that are directly attributable to the acquisition, issue, or disposal of a financial instrument.

A

Transaction Costs

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12
Q

One that would not have been incurred if the entity had not acquired, issued, or disposed of the financial instruments.

A

Incremental Costs

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13
Q

Comprises cash on hand, cash in bank, and cash treasury accounts.

A

Cash

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14
Q

Checks drawn but not yet given to the payees.

A

Unreleased Checks

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15
Q

How are unreleased checks adjusted?

A

Reverted back to cash.

Cash in Bank, Local Currency xx
Accounts Payable xx

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16
Q

These are checks that are staled, voided, or spoiled.

A

Canceled Checks

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17
Q

A check which has been outstanding for over 6 months from its date.

A

Stale Check

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18
Q

How are canceled checks pertaining to the CURRENT YEAR adjusted?

A

Reverted back to cash.

Cash-MDS, Regular xx
Accounts payable xx

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19
Q

How are canceled checks pertaining to the PRIOR PERIOD adjusted?

A

Reverted back to cash.

Accumulated Surplus/Deficit xx
Accounts payable xx

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20
Q

Amount granted to duly designated PCF custodian for payment of authorized petty or miscellaneous expenses which cannot be conveniently paid through checks or ADA.

A

Petty Cash Fund

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21
Q

For how long the PCF amount is sufficient to defray petty expenses?

A

1 month

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22
Q

The PCF custodian shall be properly bonded if the established PCF amount exceeds what amount?

A

Php 5,000

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23
Q

What system is used to maintain PCF?

A

Imprest System

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24
Q

PCF shall not exceed what amount?

A

Php 15,000

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25
Q

Is splitting of PCF transactions prohibited?

A

Naur.

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26
Q

A canvass from how many suppliers are needed for purchases amounting to Php 1,000 and above?

A

At least 3 suppliers.

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27
Q

How often do you replenish PCF?

A

If disbursements reached at least 75% or as needed.

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28
Q

Is the unused balance of PCF closed at year-end?

A

Naur.

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29
Q

When shall be the unused balance of PCF closed?

A

Upon termination, separation, retirement, or dismissal of the PCF custodian.

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30
Q

When are journal entries made under PCF?

A

When replenished and/or adjusted.

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31
Q

What is the JE for the establishment of PCF?

A

Petty Cash xx
Cash-MDS, Regular xx

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32
Q

What is the JE for the replenishment of PCF?

A

Various Expenses xx
Cash-MDS, Regular xx

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33
Q

What is the JE if the PCF is not replenished but has disbursements?

A

Various Expenses xx
Petty Cash xx

34
Q

What is the JE if the PCF custodian retired and the PCF is closed?

A

Cash-Collecting Officer xx
Petty Cash xx

35
Q

What is the JE for cash shortage?

A

Due from Officers & Employees xx
Advances for/to… xx

Cash-Collecting Officer xx
Due from Officers & Employees xx

Cash-Treasury/Agency Deposit xx
Cash-Collecting Officers xx

36
Q

What is the JE for cash overage?

A

Cash-Collecting Officer xx
Miscellaneous income xx

Cash-Treasury/Agency Deposit xx
Cash-Collecting Officers xx

37
Q

A check that is not accepted when presented for payment.

A

Dishonored Checks

38
Q

This shall be issued by the Collecting Officer when a check is dishonored.

A

Notice of Dishonored Checks

39
Q

Dishonored checks are recorded to the:

A

Other Receivables

40
Q

What is the JE for dishonored checks REMITTED TO BTr in the CURRENT YEAR?

A

Other Receivables xx
Cash-Treasury/Agency Deposit xx

41
Q

What is the JE for dishonored checks REMITTED TO BTr in the PRIOR PERIOD?

A

Other Receivables xx
Accumulated Surplus/Deficit xx

42
Q

What is the JE for dishonored checks REMITTED TO AUTHORIZED GOV’T DEPOSITORY BANK in the CURRENT YEAR?

A

Other Receivables xx
Cash in Bank-Local Currency xx

43
Q

What is the JE for dishonored checks REMITTED TO AUTHORIZED GOV’T DEPOSITORY BANK in the PRIOR PERIOD?

A

Other Receivables xx
Cash in Bank-Local Currency xx

44
Q

A report prepared for the purpose of bringing the balances of cash per records and bank statement into an agreement.

A

Bank Reconciliation Statement

45
Q

A report issued by a bank that shows credits and debits to the depositor’s account during a period.

A

Bank Statement

46
Q

He/She shall prepare bank reconciliations.

A

Chief Accountant

47
Q

He/She shall prepare bank reconciliations.

A

Chief Accountant

48
Q

Preparation of bank reconciliations shall be made within what number of days?

A

10 days

49
Q

A method under bank reconciliation in which unadjusted book and bank balances are brought to an adjusted balance.

A

Adjusted Balance Method

50
Q

Submission of bank reconciliations shall be made within what number of days?

A

20 days

51
Q

These are short-term, highly liquid investments that are readily convertible to known amounts of cash.

A

Cash Equivalents

52
Q

For debt instruments to qualify as cash equivalents, their acquisition shall be:

A

Within 3 months before scheduled maturity.

53
Q

Claims for cash or other assets from other entities.

A

Receivables

54
Q

Amounts due from customers arising from regular trade and business transactions.

A

Accounts Receivables

55
Q

Represents claims, usually with interest, for which a formal instrument of credit is issued as evidence of debt.

A

Notes Receivables

56
Q

Used in the BTr-NG books to recognize loans extended by the National Government to Government Financial Institutions.

A

Loans Receivable

57
Q

Initial Measurement of Receivables

A

Fair Value + Transaction Costs

58
Q

Subsequent Measurement of Receivables

A

Amortized Cost

59
Q

4 Classifications of Financial Assets

A

Financial Asset at FV through Surplus/Deficit (Held for Sale or As Is)
Held-to-Maturity Investments (only debts)
Loans and Receivables
Available-for-Sale Financial Assets

60
Q

Initial Measurement of FINANCIAL ASSET AT FV THROUGH SURPLUS/DEFICIT

A

Fair Value

61
Q

Subsequent Measurement of FINANCIAL ASSET AT FV THROUGH SURPLUS/DEFICIT

A

Fair Value; Changes in FV are recognized in SURPLUS/DEFICIT.

62
Q

Initial Measurement of HELD-TO-MATURITY INVESTMENTS

A

Fair Value + Transaction Costs

63
Q

Subsequent Measurement of HELD-TO-MATURITY INVESTMENTS

A

Amortized Cost

64
Q

Initial Measurement of LOANS AND RECEIVABLES

A

Fair Value + Transaction Costs

65
Q

Subsequent Measurement of LOANS AND RECEIVABLES

A

Amortized Cost

66
Q

Initial Measurement of AVAILABLE-FOR-SALE INVESTMENTS

A

Fair Value + Transaction Costs

67
Q

Subsequent Measurement of AVAILABLE-FOR-SALE INVESTMENTS

A

Fair Value; Changes in FV are recognized in EQUITY.

68
Q

Investments in unquoted equity instruments whose FV cannot be reliably measured are measured at:

A

Cost

69
Q

In case of impairment of Accounts Receivable, this account is used:

A

Allowance for Impairment

70
Q

The process of removing a previously recognized asset, liability, or equity from the statement of financial position.

A

Derecognition

71
Q

A financial instrument derives its value from the changes in the value of some other underlying asset that requires no initial net investment.

A

Derivative

72
Q

A specified price, rate, or other variable.

A

Underlying

73
Q

This the very purpose of derivatives in which it is the process of identifying the desired level and actual level of risk.

A

Risk Management

74
Q

A method of offsetting a potential financial loss to reduce risk.

A

Hedging

75
Q

A hedge of the exposure to changes in the fair value.

A

Fair Value Hedge

76
Q

A hedge of the exposure to changes in the fair value.

A

Fair Value Hedge

77
Q

A hedge of the exposure to variability in cash flows.

A

Cash Flow Hedge

78
Q

A hedge of the exposure to variability in cash flows.

A

Cash Flow Hedge

79
Q

A designated derivative or a designated non-derivative financial asset/liability whose FV or cash flows are expected to offset changes in the FV or cash flows of the hedged item.

A

Hedging Instrument

80
Q

An asset, liability, firm commitment, or net investment that exposes that entity to risk of changed in FV or cash flows and is designated as being hedged.

A

H

81
Q

An asset, liability, firm commitment, or net investment that exposes that entity to risk of changed in FV or cash flows and is designated as being hedged.

A

Hedged Item

82
Q

An asset, liability, firm commitment, or net investment that exposes that entity to risk of change in FV or cash flows and is designated as being hedged.

A

Hedged Item

ACCGOVP (9 decks)

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