4. SMEs (Students Guide)

BALIUAG UNIVERSITY CPA REVIEW REVIEW 2016-2017 2 016-2017 THEORY OF ACCOUNTS

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SMALL AND MEDIUM-SIZED ENTITIES (SMEs)

1. Which of of the followin following g terms terms is not descript descriptive ive of SMEs? SMEs? a. Priv Privat ate e ent entit itie ies s b. List Listed ed com compa pani nies es c. Small Small and and medium medium-si -sied ed entit entities ies d. !on-publicl !on-publicl" " accountab accountable le entities entities #. Which of the the following following entities entities ma" describe describe its $nancial $nancial statements statements as being in compliance with P%&S for SMEs? a. Metrop Metropolit olitan an 'an( 'an( and )rust )rust *ompan *ompan" " b. Philippine Philippine Long Long +istance +istance )elephon )elephone e *ompan" *ompan" c. SM ,rou ,roup p of *om *ompa pani nies es d. !one !one of the the abo above ve . n which which of the following following situation situations s can entit" entit" that that does not have have public accountabilit" claim compliance with the P%&S for SMEs? a. )he entit" entit" prepares prepares its $nancial $nancial statements statements in accordanc accordance e with the P%&S b. )he entit" entit" prepares prepares its $nancial $nancial statements statements in accordanc accordance e with the P%&S/ e0cept that it applies the reuirement of P%&S for SMEs for amortiation of intangible with indeterminate useful life c. )he entit" entit" prepares prepares its $nancia $nanciall statements statements in accorda accordance nce with with the P%&S for SMEs d. n bot both h cases cases ' and and * 2. 3n entit" entit" that is not publicl" publicl" accountab accountable le must ma(e ma(e an e0plicit e0plicit and unreserved statement of compliance with the P%&S for SMEs a. f the entit" entit" complies complies with all all the reuirement reuirements s of P%&S for for SMEs b. f the entit" entit" complies complies with the the ma4orit" ma4orit" of the reuirem reuirements ents of %&S %&S for SMEs c. f the entit" entit" complies complies with the the ma4orit" ma4orit" of the reuirem reuirements ents of the the full %&S/ e0cept that it applies a particular reuirement of P%&S for SMEs for a particular $nancial statement element d. f the the entit" entit" complies complies with with the full P%&S P%&S 5. 3ll of the the following following can can be classi$e classi$ed d as SMEs/ SMEs/ e0cept e0cept a. *ommercial *ommercial ban( with assets of P P million million b. Manufactur Manufacturing ing entit" entit" with total total liabilitie liabilities s of P million million c. Merchandisi Merchandising ng compan" compan" with with total total assets assets of P56 million d. %o %ood od and beverage beverage chain chain with total total liabilities liabilities of P#56 million million 7. n which which of the following following situation situations s can an entit" entit" that that does not not have public accountabilit" claim compliance with the P%&S for SMEs in its $nancial statements? a. )he entit" entit" prepares prepares its $nancia $nanciall statements statements in accorda accordance nce with with local ta0 reuirements that are substantiall" the same as the P%&S for SMEs

BALIUAG UNIVERSITY CPA REVIEW 2016-2017 THEORY OF ACCOUNTS

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b. )he entit" prepares its $nancial statements in accordance with local ta0 reuirements that are/ e0cept in name/ word-for-word the same as full P%&S c. )he entit" prepares its $nancial statements in accordance with local ta0 reuirements that are/ e0cept in name/ word-for-word the same as the P%&S for SMEs d. n both cases ' and * above 8. 'ased on Philippine SE* rules/ which of the following entities would not normall" ualif" as SMEs? a. Entities with total assets between P million and P56 million b. Entities with total liabilities between P million and P#56 million c. Public utilit" companies or holders of secondar" licensed issued b" a regulator" agenc" d. Entities that are not in the process of $ling %S for purposes of issuing an" class of instrument in a public mar(et 9. Which set of standards shall be used b" small publicl"-listed entities? a. %ull P%&S b. P%&S for SMEs c. Either %ull P%&S of P%&S for SMEs d. %ull P%&S/ P%&S for SMEs/ or an" acceptable accounting basis :. ;nder Section 2 of P%&S for SMEs/ one of the following is not among the three specialied activities a. 3griculture b. E0tractive activities c. nsurance d. Service concessions 16. %or small and medium entities/ >S&E ma" under certain conditions replace which two