1. Under PFRS 9, financial assets are classified
a. on the basis of the entity’s business model only.
b. based on the nature of the financial assets, i.e., debt or equity instrument.
c. as financial assets subsequently measured at FVPL, FVOCI (election), FVOCI (mandatory) or
Amortized cost.
d. all of these
2. According to PFRS 9, if an asset or a liability measured at fair value has a bid price and an ask price,
the price within the bid-ask spread that is most representative of fair value in the circumstances is
used to measure fair value. Bid price is
a. the maximum price at which market participants are willing to sell an asset.
b. the maximum price at which market participants are willing to buy an asset.
c. the minimum price at which market participants are willing to sell an asset.
d. the price that an entity will incur to bid farewell to an asset.
3. The following are taken from the records of Lunch Co. as of year-end.
Cash
10,400
Investment in subsidiary
44,000
Accounts receivable
12,000
Treasury shares
44,800
Allowance for bad debts
(1,600)
Investment in bonds
9,600
Note receivable
4,000
Land
112,000
Interest receivable
1,600
Building
208,000
Claim for tax refund
9,600
Accum. depreciation
(52,000)
Advances to suppliers
Investment property
Inventory
60,000
Biological assets
24,000
Prepaid expenses
4,000
Intangible assets
56,000
Petty cash fund
Deferred tax assets
10,400
Investment in associate
16,000
Sinking fund
16,000
