ISA1

• Documentary stamp tax, underwriting costs, and newspaper publication fees directly related to the issuance of shares are recognized as deductions from equity


  True
• The right of succession allows the transfer of share capital entirely at the shareholders' discretion, which does not affect the corporation's existence.


  True
• Subscription receivable is reported as a current asset if it is collectible within twelve months from the end of the reporting period.


  True
• Property, plant, and equipment held for distribution to shareholders are measured in the statement of financial position at the lower of the fair value and their carrying value.

  True
• Retained earnings may not be increased as a result of share capital transactions.

  True
• Subscription receivable is reported as a current asset if it is collectible within the twelve months from the end of the reporting period.


  True
• Corporate creditors ordinarily have recourse only to corporate assets in satisfaction of their claims.


  True
• statement that is true when comparing corporations and partnerships

  Unlike shareholders, general partners may have liability beyond their capital balances.
• The shareholders or members indicated in the Articles of Incorporation, originally forming and composing the corporation, and who are signatories thereof, are called

  Incorporators
• Share dividends declared and distributed

  Decrease the earned capital but increase the contributed capital
• Share issue costs are:

  Charged against the share premium from related issuance
• ABC Corporation declared a 10% bonus issue on November 15, 2025, distributable on December 31, 2025 to shareholders of record as of November 30, 2025. Total shareholders' equity


  Is not affected by the declaration and issuance of the bonus issue
• The number of treasury shares is equal to the difference between

  Issued shares and outstanding shares
• What are the effects, respectively, on total shareholders' equity of the acquisition and subsequent resale of treasury shares at more than their cost?

  Decrease, Increase
• Losses on the sale of treasury shares are reflected in

  Additional paid-in capital and retained earnings.
• What is the pro-rata distribution of earnings to the shareholders of a corporation?

  Dividends
• if it is collectible beyond twelve months from the end of the reporting period, subscription receivable is reported as?

  Contra-shareholders equity account
• Which of the following are the basic rights of a shareholder of an ordinary share?

  • The right to vote
  • The right to receive a proportionate share of assets in corporate liquidation
  • The right to subscribe to additional issue of shares of stock
• In a sale of delinquent shares at a public auction, the highest bidder is one who is

  Willing to pay the unpaid subscription price, the expenses related to delinquent shares, and accrued interest in exchange for the lowest number of shares
• On April 1, 2023, authorized ordinary shares were sold on a subscription basis at a price in excess of par value. 20% of the subscription price was collected On June 1, 2023, the remaining 80% of the subscription price was collected. Additional paid in capital would increase on


  April 1, 2023
• The amount that a shareholder would receive for each share owned in the event of corporate liquidation, assuming assets are realized and liabilities are settled at carrying amounts, is known as

  Book value per share
• A corporation reports the sale of some of its shares to a shareholder in its financial statements, and the shareholder reports the same transaction as an investment. Therefore,

  No accounting concept has been violated
• The "gain" on sale (reissuance) of treasury shares is

  Credited to share premium
• The purchase of treasury shares

  Decreases shares outstanding
• Treasury shares are recorded at


  Cost regardless of whether they are acquired at above or below par value
• Costs incurred to sell shares of stock (i.e., share issue costs) shall be debited to

  Share premium
• A primary element that distinguishes accounting for corporations from accounting for other legal forms of business organization (e.g., partnerships) is that

  The corporation draws sharper distinction in accounting for sources of capital
• not a characteristic of a corporation?

  Nontaxable entity
• which organization is responsible for setting International Financial Reporting Standards?

  International Accounting Standards Board (IASB)
• To qualify as generally accepted, accounting principle must

  Usually guide corporate managers in preparing financial statements, which will be understood by widely scattered stockholders.
• What is meant by comparability when discussing financial accounting information?

  Information that is measured and reported in a similar fashion across companies.
• It is the process of incorporating in the statement of financial position or the statement of comprehensive income an item that meets the definition of an element of the financial statements.


  Recognition
• pertains to relevance?


  Capable of making a difference to the decisions made by the users.
• When two or more qualified individuals, working independently, can reasonably develop similar conclusions from the complete set of financial statements prepared by the entity, which enhancing qualitative characteristic was satisfied?

  Verifiability
• The major objective of applying consistency in accounting policies is

  To promote comparability between financial statements of different reporting periods.
• financial statement that presents the entity's financial performance during a particular reporting period?

  Statement of Comprehensive Income
• an ingredient of relevance?

  Predictive value
• Company A issuing its annual financial reports within one month of the end of the year is an example of which enhancing quality of accounting information?

  Timeliness
• Under this concept, capital is regarded as the net assets or equity of an enterprise

  Financial concept
• Information is neutral if it

  is free from bias toward a predetermined result.