MAS
The point where Total Contribution Margin equals Total Fixed Costs.
A) Margin of Safety B) Break-even Point
C) Relevant Range D) Degree of Leverage
Entity A and Entity B form a Joint Venture (JV). Entity A contributes cash of ₱400,000 for a 40% interest. The JV earns ₱100,000 profit and pays ₱20,000 dividends. What is the carrying amount of the Investment in JV? Use Equity Method.
Under the Equity Method: Initial Investment: ₱400,000 (+) Share in Profit (100,000 X 40%): ₱40,000 (-) Share in Dividends (20,000 X 40%): (₱8,000) Carrying Amount: ₱432,000
These contracts are valid until they are annulled by a proper action in court.
A) Rescissible B) Voidable
C) Unenforceable D) Void
If the auditor increases the acceptable level of Detection Risk, what happens to the amount of substantive testing?
A) Increases B) Decreases
C) Remains the same D) Becomes zero
Under the TRAIN Law, the Estate Tax is no longer based on a graduated schedule. It is now fixed at this flat rate based on the net estate.
A) 12% B) 8%. C) 10%. D) 6%
The discount rate that results in a Net Present Value (NPV) of zero.
A) Cost of Capital B) Hurdle Rate
C) Internal Rate of Return D) Simple ROI
When preparing consolidated FS, intercompany sales of inventory must be eliminated to avoid overstating which two accounts?
A) Assets & Equity B) Sales & Cost of Goods Sold C) Cash & Payables D) Goodwill & NCI
Which law protects depositors from bank insolvency up to 1,000,000?
A) AMLA B) PDIC Law
C) Truth in Lending Act D) Secrecy of Bank Deposits
These are tests designed to verify the operating effectiveness of controls.
A) Substantive Tests B) Tests of Controls
C) Dual-purpose Tests D) Analytical Procedures
The Deduction: In computing the Net Estate of a Filipino citizen, how much is the maximum allowable deduction for the Family Home?
10,000,000
A cost that remains constant per unit regardless of changes in activity level.
A) Fixed Cost B) Variable Cost
C) Mixed Cost D) Step Cost
This method of process costing assumes that the units in Beginning WIP are completed first.
A) Weighted Average B) LIFO
C) FIFO D) Specific Identification
Under the Cooperative Code, what is the minimum number of persons required to organize a Primary Cooperative?
Primary Cooperative is fifteen (15) natural persons who are Filipino citizens.
An auditor issues this type of opinion when there is a pervasive limitation on the scope of the audit.
A) Adverse B) Qualified
C) Disclaimer D) Unmodified
Starting January 1, 2023 (and applicable in 2025), if an employee has a taxable income of ₱500,000, what is their basic tax due? (Hint: The bracket is ₱22,500 + 20% of the excess over ₱400,000).
52,500
Future Bright Corp. is considering purchasing a new machine for ₱800,000. The machine has a useful life of 5 years with no salvage value. The project is expected to produce annual net cash inflows of ₱250,000. The company’s cost of capital is 10%.
Task: Calculate the Net Present Value (NPV) of the project. (PV of an ordinary annuity of 1 for 5 periods at 10% is 3.79)
Identify Cash Flows: Annual Inflow = ₱250,000; Initial Investment = ₱800,000.
Calculate PV of Inflows: 250,000 x 3.79 = 947,500
Subtract Investment: 947,500 - 800,000
Final Answer: ₱147,500 NPV
In a partnership, if the articles of co-partnership do not specify how losses are shared, how are they distributed?
A) Equally B) Based on Capital
C) Same as Profit Sharing D) To the Industrial Partner only
A contract where the ownership of a thing is transferred for a price certain in money or its equivalent.
A) Agency B) Pledge C) Sale D) Loan
The five fundamental principles of Ethics
1. Integrity, 2. Objectivity, 3. Professional Competence and Due Care, 4. Confidentiality, and 5. Professional Behavior.
Gross Compensation Income (PH) :₱800,000
Business Gross Sales(PH) : ₱2,000,000
Business Expenses(PH) : ₱800,000
Dividend from a Domestic Corp :₱50,000
Freelance Income(US) :₱500,000
Foreign Business Expenses(US) :₱100,000
Interest from Bank Account(JAPAN) :₱20,000
Find the Total Taxable Income,Basic Tax due, FWT and Tax Liability.
Total Global Taxable Income:₱2,420,000
Basic Tax Due: ₱528,500
Final Withholding Tax (Dividends):₱5,000
Total Tax Liability for the Year:₱533,500
Alpha Manufacturing produces "Gadget X" with a total unit cost of ₱100, consisting of:
Direct Materials: ₱40
Direct Labor: ₱20
Variable Overhead: ₱15
Fixed Overhead (Allocated): ₱25
Alpha has excess capacity. A foreign distributor offers to buy 5,000 units at a special price of ₱85 per unit. To fulfill the order, Alpha will incur additional shipping costs of ₱5 per unit.
Task: Should Alpha accept the special order? Calculate the incremental profit or loss to justify your answer.
Identify Relevant Costs (Variable Only):
Direct Materials: ₱40
Direct Labor: ₱20
Variable Overhead: ₱15
Additional Shipping: ₱5
Total Relevant Cost per unit: ₱80
Calculate Contribution per Unit: Special Price (85) - Relevant Cost (80) = ₱5 .
Calculate Total Incremental Profit: $5,000 x ₱5.
Final Answer: Accept the order; it results in an incremental profit of ₱25,000
On Dec 1, 20X1 a PH company buys equipment for $10,000. Spot rates: Dec 1 ($1 = ₱50); Dec 31 ($1 = ₱52). Settlement is Jan 30. What is the Foreign Exchange (FX) Gain/Loss for the year-end?
Liability on Dec 1: $10,000 X 50 = ₱500,000 Liability on Dec 31: $10,000 X 52 = ₱520,000 Result: ₱20,000 FX Loss (since the liability increased).
The minimum number of incorporators required to form a corporation under the Revised Corporation Code.
One
An auditor uses a Reliability Factor of 3.0 for a 95% confidence level. Tolerable misstatement is ₱100,000. The population is ₱2,000,000. Calculate the Sample Size.
Sampling Interval =Tolerable Misstatement/Reliability FactoR = 100,000/3.0 = 33,333
Sample Size = Population Value/Sampling Interval = 2,000,000/33,333
Sample SIZE: 60 units
In 2024/2025, the Philippines began implementing a 12% VAT on Digital Services. Name two examples of non-resident digital service providers that are now covered by this (e.g., streaming or apps).
Netflix, Disney+, Google, Spotify, or Canva