PAS 1 Flashcards
It prescribes the basis for presentation of general purpose financial statements
Philippine Accounting Standards 1
PAS 1 is used to ensure _____ and requires _____
Comparability and Consistency
This type of comparability refers when the same entity is compared to different time periods
Intra-Comparability (Horizontal or Inter-Period)
This type of comparability refers when different entities are compared with the same time period
Inter-Comparability (Dimensional)
PAS 1 is only suitable for profit-oriented entities
FALSE, non-profit may also use but may need to amend the line-time and financial statement descriptions
It refers to the structured representation of an entity’s financial position and results of its operations
Financial Statements
It refers to a type of financial statement that intends to meet the users common needs and have no right to request tailored information needs
General Purpose Financial Statements
The primary purpose of Financial Statements states that
To provide information of the financial position, financial performance, and cash flows for economic decisions
The secondary purpose of Financial Statements states that
To show results of management’s stewardship over entity’s resources
What are the 6.1 financial statements
- Financial Position
- Profit or Loss and Other Comprehensive Income
- Changes in Equity
- Cash Flows
- Notes (Comparative information)
- Additional statement of financial position (when the situation requires to do so)
Are income statement, profit or loss and other comprehensive income, and comprehensive income the same?
No
This general feature of financial statements refer to faithfully representing the statements and the effects of transaction and proper selection and application of accounting policies
Fair Presentation and Compliance with PFRSs
PAS 1 does not require entities to make an explicit and unreserved statement of such compliance in the notes
False, notes is where the explicit and unreserved statements are found and are required
If a PAS requirement makes an entity’s financial statements misleading, they are not allowed to depart from a PFRS measure
False, they are allowed and also encouraged to follow Regulatory Accounting Principles (RAP)
This general feature of financial statement refers to the entity’s ability to continue in the future with at least and not limited to 12 months
Going Concern
An entity is considered going concern if it has a history of profitable operations and ready access financial resources
True
An entity with material uncertainties may affect its going concern and must not be disclosed in the notes
Ture, but the material uncertainties should be disclosed in the notes
An entity that is no longer a going concern should continue preparing its financial statements in the same basis
False, another basis should be used and shall be disclosed and the reason why the entity is no longer considered a going concern
All financial statements use the accrual basis of accounting
False, Cash Flows require cash basis of accounting
This refers to the class of similar items
Line Item
Dissimilar material items are aggregately presented
False
Immaterial items are individually presented
False, these immaterial items are aggregated
It refers to reflecting the substance of the transaction
Offsetting
Presenting gains and losses from assets net of the related selling expenses is an example of offsetting
True
Deducting allowance for doubtful accounts from accounts receivable is an example of offsetting
False
Presenting a loss from a provision net of a reimbursement from a third part is an example of offsetting
True
Measuring assets net of valuation if offsetting
False
Financial statements are prepared at least annualy
True
If an entity changes its reporting period, the entity shall…
Disclose the following
1. Period Covered
2. Reason
3. Fact that the information presented are not entirely comparable
The PAS 1 requires a minimum of three or each financial statements and related notes
False, only two are required but may entity’s can provide additional information more than minimum requirement
An additional statement of financial position can occur when an entity applies an accounting policy retrospectively
True
When an entity does not create retrospective restatement of items in its financial statement, additional statement of financial position is required
False
When an entity reclassifies items in its financial statements, additional statement of financial position is allowed
True
