SVFC BS Accountancy - 2nd Set Online Resources SY20-19 1st Semester PDF

SAINT VINCENT DE FERRER COLLEGE AUGUST 2019
BS ACCOUNTANCY (1st semester SY 2020-2019) Part 2

ONLINE RESOURCES by Prof. Hector Santos Jr., CPA, MBA
AUDITING THEORY
I. Topic(s):
Republic Act 9298
II. Learning Objective(s):

To understand the rules and regulations covering Republic Act 9298, otherwise known as
Philippine Accountancy Act of 2004
III. Rundown
Please read and understand the other file entitled “RA 9298.pdf”
IV. Recommended Reference(s):

1. Text Book - Auditing Theory by Salosagcol
2. Text Book – Assurance Principle by Cabrera
3. Text Book Auditing & Assurance Services - David Ricchiute
4. Internet
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Copyright of Prof. Hector U. Santos Jr., CPA, MBA
This online resource is intended solely to whom it is authorized to receive it. If you are not the intended recipient you are hereby notified that
any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be
unlawful.
MANAGEMENT ADVISORY SERVICES
I. Topic(s):
Managerial Accounting and Cost Concepts
II. Learning Objective(s)

(after studying the topic, you should be able to):
1. Identify the major differences and similarities between financial and managerial accounting.
2. Identify and give examples of each of the three basic manufacturing cost categories.
3. Distinguish between product costs and period costs and give examples of each.
4. Prepare an income statement including calculation of the cost of goods sold.
5. Prepare a schedule of cost of goods manufactured.
6. Understand the differences between variable costs and fixed costs.
7. Understand the differences between direct and indirect costs.
8. Understand cost classifications used in making decisions: differential costs, opportunity costs,
and sunk costs.
III. Rundown
1. Please watch below link to know and understand the topic

https://www.youtube.com/watch?v=70h_MSyLVbs
https://www.youtube.com/watch?v=AgbANu1f8H0
2. Please see attached slide entitled
https://www.slideshare.net/duonghoang2709/chapter-1-39083832

1. Managerial Accounting by Garrison
2. Managerial Accounting by Kieso Weyganth
3. Managerial Accounting by local authors
4. Internet
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THEORY OF ACCOUNTS
I. Topic(s):
Presentation of Financial Statements
II. Learning Objectives:

Understand concepts of Presentation of Financial Statements
III. Rundown
1. Please read the latest textbook version of “Financial Accounting Volume 1” by Valix
2. Also read Philippine Accounting Standard 1
Important things to remember

Going concern
When preparing financial statements, management shall make an assessment of an
entity’s ability to continue as a going concern. Financial statements shall be prepared on a going
concern basis unless management either intends to liquidate he entity or to cease trading, or has
no realistic alternative but to do so.
Accrual basis of accounting

An entity shall prepare its financial statements, except for cash flow information, using
the accrual basis of accounting.
.
Materiality and aggregation
Each material class of similar items shall be presented separately in the financial
statements. Items of a dissimilar nature or function shall be presented separately unless they are
immaterial.
Offsetting
Assets and liabilities, and income and expenses, shall not be offset unless required or
permitted by a Standard or an Interpretation.
Comparative information
Except when a Standard or an Interpretation permits or requires otherwise, comparative
information shall be disclosed in respect of the previous period for all amounts reported in the
financial statements.
Identification of the financial statements

The financial statements shall be identified clearly and distinguished from other
nformation in the same published document. Each component of the financial statements shall
be identified clearly.In addition, the following information shall be displayed prominently,
andrepeated when it is necessary for a proper understanding of the information presented.
Reporting period
Financial statements shall be presented at least annually. When an entity’s
balance sheet date changes and the annual financial statements are presented for
a period longer or shorter than one year, an entity shall disclose, in addition to
the period covered by the financial statements.
Balance sheet
Current/non-current distinction
An entity shall present current and non-current assets, and current and
non-current liabilities, as separate classifications on the face of its balance sheet except when a
presentation based on liquidity provides information that is reliable and is more relevant.
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Current assets
An asset shall be classified as current when it satisfies any of the following
criteria:
(a) it is expected to be realized in, or is intended for sale or consumption in, the
entity’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realized within twelve months after the balance sheet
date; or
(d) it is cash or a cash equivalent unless it is restricted
from being exchanged or used to settle a liability for at least twelve months
after the balance sheet date.
All other assets shall be classified as non-current.
Current liabilities
A liability shall be classified as current when it satisfies any of the following
criteria:
(a) it is expected to be settled in the entity’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within twelve months after the balance sheet date; or
(d) the entity does not have an unconditional right to defer settlement of the
liability for at least twelve months after the balance sheet date.
An entity shall disclose the following, either on the face of the balance sheet or in the notes:
(a) for each class of share capital:
(i) the number of shares authorized;
(ii) the number of shares issued and fully paid, and issued but not fully
paid; (iii) par value per share, or that the shares have no par value;
(iv) a reconciliation of the number of shares outstanding at the beginning
and at the end of the period; (v) the rights, preferences and restrictions attaching to that class
including restrictions on the distribution of dividends and the
repayment of capital; (vi) shares in the entity held by the entity or by its subsidiaries or
associates; and (vii) shares reserved for issue under options and contracts for the sale of shares,
including the terms and amounts;
Profit or loss for the period

All items of income and expense recognized in a period shall be included in profit or loss
unless a Standard or an Interpretation requires otherwise.
The notes to financial statements shall:

(a) present information about the basis of preparation of the financial
statements and the specific accounting policies
;
(b) disclose the information required by IFRSs that is not presented on the face
of the balance sheet, income statement, statement of changes in equity or
cash flow statement; and
(c) provide additional information that is not presented on the face of the
balance sheet, income statement, statement of changes in equity or cash
flow statement, but is relevant to an understanding of any of them.
Disclosure of accounting policies

An entity shall disclose in the summary of significant accounting policies:
(a) the measurement basis (or bases) used in preparing the financial
statements; and
(b) the other accounting policies used that are relevant to an understanding of the financial
statements.
An entity shall disclose, in the summary of significant accounting policies or other notes, the
judgments, apart from those involving estimations, that management has made in the process of
applying the entity’s accounting policies and that have the most significant effect on the amounts
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recognized in the financial statements.
Key sources of estimation uncertainty

An entity shall disclose in the notes information about the key assumptions concerning
the future, and other key sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
In respect of those assets and liabilities, the notes shall include details of:
(a) their nature; and
(b) their carrying amount as at the balance sheet date.
Income Statement
 it is a formal statement showing the performance of the entity for a given period of time.
 it is primarily measured in terms of the level of income earned by the entity through the
effective and efficient utilization of its resources.
Approaches in the income performance of an entity
1. Capital Maintenance Approach means that net income occurs only after the capital used
from the beginning of the period is maintained.
2. Transaction Approach
 it is the conventional or traditional preparation of income statement
 this approach of computing net income or loss requires the determination of how
much income was earned during the year and how much expense is incurred in
earning the revenue.
 it is also the direct result of the application of the principle of matching costs with
revenues.
Income is the increase in economic benefit during the accounting period in the form of inflow or
increase in asset or decrease in liability that results in increase in equity, other than contribution
from equity participants.
Sources of Income
a. Sales of merchandise to customers
b. Rendering of services
c. Use of entity resources
d. Disposal of resources other than products
Expense is the decrease in economic benefit during the accounting period in the form of outflow
or decrease in asset or increase in liability that results in decrease in equity, other than
contribution from equity participants.
Expenses include the following:

e. Cost of sales
f. Distribution costs or selling expenses
g. Administrative expenses
h. Other expenses
i. Income tax expense

Latest Edition - Financial Accounting 1 by Conrado Valix
Philippine Accounting Standards
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BUSINESS LAW
I. Topic(s):
Law on Business Transactions - Obligations
II. Learning Objective(s):

1. To learn about the sources of obligation and their concepts
2. To learn kinds of obligations in general and under Civil Code
3. To learn specific circumstances affecting obligation in general
4. To learn duties of an obligor to give, to do and not to do
5. To learn extinguishment of obligation
III. Rundown
Please read the latest textbook version of “Obligation and Contract” by Hector S. De Leon

Latest Edition - “Obligation and Contract” by Hector S. De Leon
Latest Edition - “Obligation and Contract” by Suarez
Civil Code
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ONLINE ASSESSMENTS
Reminders:
1. Should be submitted using excel format on or before January 15, 2020 exclusively to
saintvincentdeferrercollege@yahoo.com
2. Answers should follow below format for easy checking
a. Mutiple Choice
Multiple
Choice AT TOA MAS BL
1 a a b a
2 c a a a
3 a a b a
4 c a a a
5 a a b a
6 c
7 a
8 a
9 c
10 a
b. True or False
True or
False AT TOA MAS BL
1 True False True False
5 True False
6 True False
7 True False
8 True False
9 True False
10 True False
c. Identification
True or
False AT TOA MAS BL
Management
1 PSA GAAP Accounting Obligatio
2 AASC
3
4
5
6
7
8
9
10
d. Problem Solving
– must write/type the solution and answer.
e. Fill in the blanks
– must write the question and answer
3. Excell file should have a file name which consists of surname, first name and part
number (Example: SantosHectorPart1, DelaCruzJuanPart1, etc.)
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QUESTIONS:
(Multiple Choice, Computation & Identification)
Auditing Theory
1. Who is permitted by law to practice accountancy?

a. A corporation whose stockholders are all CPAs
b. A partnership of nonCPAs
c. A corporation whose stockholders are all nonCPAs
d. A partnership of CPAs with non-CPA staff
2. The following statements relate to the RA 9298:

I. Firm is an organization engaged in the practice of public accountancy and must be
consist of more than one staff member
II. Partnership is a professional partnership engaged in the practice of public accountancy
which is formed in accordance with Philippine laws, either as a general partnership or a
limited liability partnership, and must be registered with the Securities and Exchange
Commission
III. Foreigners who become Filipino due to naturalization process can take the CPA Board
Examination
State whether the foregoing statements are true or false.

a. All of the statements are true. c. Only two of the statements are true.
b. Only one of the statements is true. d. All of the statements are false.
3. To qualify as having fully passed the CPA licensure examination, a candidate must obtain
75% in majority of the subjects.
CPA’s Continuing Professional Education is now known as Continuing Professional

Development.
a. True, True c. True, False

b. False, True d. False, False
4. As of date, what it is the one and only accredited professional organization of CPA in the
Philippines.
5. SGV & Co., KPMG, Isla Lipana and Delloite can be a CPE provider? True or False?
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Management Advisory Services
1. Barrack Inc. manufactures laser printers within a relevant range of production of 50,000 to 70,000
printers per year. The following partially completed manufacturing cost schedule has been prepared:
Number of Printers Produced

70,000 90,000 100,000
Total costs:
Total variable costs $350,000 (d) (j)
Total fixed costs 630,000 (e) (k)
Total costs $980,000 (f) (l)
Cost per unit:
Variable cost per unit (a) (g) (m)
Fixed cost per unit (b) (h) (n)
Total cost per unit (c) (i) (o)
On the above cost schedule, please provide the answers for letter (b), (e), and (o) only.
2. A production supervisor's salary that does not vary with the number of units produced is an
example of a fixed cost. True or False?
Cost behavior refers to the manner in which a cost changes as the related activity changes. True
or False?
The fixed cost per unit varies with changes in the level of activity. True or False?
3. Variable costs are costs that remain constant in total dollar amount as the level of activity changes.
True or False?
Direct materials and direct labor costs are examples of variable costs of production. True or False?
Rental charges of $40,000 per year plus $3 for each machine hour over 18,000 hours is an example
of a fixed cost. True or False?
If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution
margin ratio is 60%. True or False?
4. Given the following cost and activity observations for Wondrous Company’s utilities, use the high-
low method to calculate Wondrous’ variable utilities costs per machine hour.
Cost Machine Hours
March $3,100 15,000
April 2,700 10,000
May 2,900 12,000
June 3,500 18,000
a. $10.00
b. $.67
c. $.63
d. $.10
5. The Jamestown Company sells a product for $150 per unit. The variable cost is $60 per unit, and
fixed costs are $270,000. Determine the (a) break-even point in sales units, and (b) break-even points
in sales units if the company desires a target profit of $36,000.
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Theory of Accounts
1. Which of the following is not a required to be presented as minimum information on the face
of the balance sheet, according to PAS 1?
b. Investment property
c. Investment, accounted for under equity method
d. Contingent Liability
e. Biological assets
2. Which of the following would be classified in a different major section of a balance sheet from
the others?
a. Subscribed common stock
b. Stock investment in subsidiary
c. Common stock
d. Stock dividend payable
3. The balance sheet provides information about each of the following items, except
a. Financial flexibility of the entity
b. Operating capability of the entity
c. Results of the entity’s operations
d. Entity’s liquidity
4. What do you call a debit retained earnings balance?

a. Capital deficiency
b. Deficit
c. Losses
d. Retained losses
5. An expense is recognized immediately in the income statement

I. When expenditure produces no future economic benefits.
II. When cost incurred ceases to quality for recognition as an asset in the balance sheet.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
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Business Law
1. Joint obligation is one where part of obligation is to be paid or fulfilled proportionately

by the different debtors and/or is to be demanded proportionately by the different
creditors
Solidary obligation is one where each of the debtors is bound to render, and/or each of
the debtors has a right to demand entire compliance with the prestation
a. True, True b. True, False c. False, True d. False, False
2. Period is an certain event
Condition is a partially certain event
3. Generally, may an action for future fraud be waived?
Generally, may an action for future negligence be waived?
4. A solidary debtor obtained a remission of the whole obligation. Is he entitled to

reimbursement from his co-debtors?
In case of fault or delay of a solidary debtor, are others debtors liable?
5. Which of the following is not a special form of payment

a. Application of payment b. Dation in payment c. Payment by cession
d. Tender of payment and consignment
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SAINT VINCENT DE FERRER COLLEGE AUGUST 2019

BS ACCOUNTANCY (1st semester SY 2020-2019) Part 2

II. Learning Objective(s):

IV. Recommended Reference(s):

MANAGEMENT ADVISORY SERVICES

II. Learning Objective(s)

1. Please watch below link to know and understand the topic

IV. Recommended Reference(s):

II. Learning Objectives:

Important things to remember

Accrual basis of accounting

Identification of the financial statements

Profit or loss for the period

The notes to financial statements shall:

Disclosure of accounting policies

recognized in the financial statements.

Key sources of estimation uncertainty

Approaches in the income performance of an entity

Expenses include the following:

IV. Recommended Reference(s):

II. Learning Objective(s):

IV. Recommended Reference(s):

1. Who is permitted by law to practice accountancy?

2. The following statements relate to the RA 9298:

State whether the foregoing statements are true or false.

CPA’s Continuing Professional Education is now known as Continuing Professional

a. True, True c. True, False

Management Advisory Services

Number of Printers Produced

4. What do you call a debit retained earnings balance?

5. An expense is recognized immediately in the income statement

1. Joint obligation is one where part of obligation is to be paid or fulfilled proportionately

a. True, True b. True, False c. False, True d. False, False

2. Period is an certain event

Condition is a partially certain event

a. True, True b. True, False c. False, True d. False, False

3. Generally, may an action for future fraud be waived?

Generally, may an action for future negligence be waived?

a. True, True b. True, False c. False, True d. False, False

4. A solidary debtor obtained a remission of the whole obligation. Is he entitled to

In case of fault or delay of a solidary debtor, are others debtors liable?

a. True, True b. True, False c. False, True d. False, False

5. Which of the following is not a special form of payment

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