Accounting and its environment

Question 1

Is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that are intended to be useful in making economic decisions.

Answer 1

Accounting

Question 2

Is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information.

Answer 2

Accounting

Question 3

Is the art of recording, classifying and summarizing in a significant manner and in terms of money transactions and events which are, in part at least, of a financial character, and interpreting the results thereof

Answer 3

Accounting

Question 4

Types of business:

Answer 4

1. Services
2. Trader
3. Manufacture
4. Raw Material
5. Infrastructure
6. Financial
7. Insurance

Question 5

TYPES OF BUSINESS
Hiring skilled staff and selling their time

Answer 5

Services

Question 6

TYPES OF BUSINESS
Buying a range of raw materials and manufactured goods and consolidating them, making them available for sales in locations near to their customers or online for delivery

Answer 6

Trader

Question 7

TYPES OF BUSINESS
Taking raw materials and using equipment and staff to convert them into finished goods

Answer 7

Manufacture

Question 8

TYPES OF BUSINESS
Buying blocks of land and using them to provide raw materials

Answer 8

Raw materials

Question 9

TYPES OF BUSINESS
Buying and operating assets (typically large assets); selling occupancy often in combination with service

Answer 9

Infrastructure

Question 10

TYPES OF BUSINESS
Accepting cash from depositors and paying them interest; using the money to provide loans to borrowers, charging them fees and a higher rate of interest than the depositors receive

Answer 10

Financial

Question 11

TYPES OF BUSINESS
Collecting of cash from many customers; investing the money to pay the losses experienced by few customers. By understanding the risk accepted and the likelihood of a claim paid

Answer 11

Insurance

Question 12

Forms of business organization.

Answer 12

1. Sole Propriertorship
2. Partnership
3. corporation

Question 13

FORMS OF BUSINESS ORGANIZATIONS
This business organization has a single owner called the proprietor who generally is also the manager. The owner receives all profits, absorbs all losses, and is solely responsible for all debts of the business.

Answer 13

Sole Proprietorship

Question 14

FORMS OF BUSINESS ORGANIZATIONS
A business owned and operated by two or more persons who bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing profits among themselves.

Answer 14

Partnership

Question 15

FORMS OF BUSINESS ORGANIZATIONS
A business owned by its stockholders. It is an artificial being created by operation of law, having the rights of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

Answer 15

Corporation

Question 16

MICRO, SMALL, AND MEDIUM ENTERPRISE
These enterprises are those with assets, before financing, of P3.0 (before P1.5 million or less and employ not more than nine workers.

Answer 16

Micro Enterprise

Question 16

MICRO, SMALL, AND MEDIUM ENTERPRISE
An enterprise that has 10 to 99 workers.

Answer 16

Small Enterprise

Question 17

MICRO, SMALL, AND MEDIUM ENTERPRISE
This enterprise has assets, before financing, of above P15 million to P100 million and employs 100 to 199 workers.

Answer 17

Medium Enterprise

Question 18

ACTIVITIES IN BUSINESS ORGANIZATION
These activities obtain other resources used to produce goods and services. They compete for these resources in financial markets.

Answer 18

Financing Activities

Question 19

ACTIVITIES IN BUSINESS ORGANIZATION
The methods an organization uses to obtain financial resources from financial markets and how it manages these resources.

Answer 19

Financing Activities

Question 20

ACTIVITIES IN BUSINESS ORGANIZATION
Managers use capital from financing activities to acquire other resources, used in the transformation process that is, to transform resources from one form to a different form, which is more valuable, to meet the needs of the people having the right mix of resources is essential to efficient and effective operations.

Answer 20

Investing Activities

Question 21

An ______ business is one that provides goods and services at low costs relative to their selling prices.

Answer 21

efficient

Question 22

An _____ business is one that is successful in providing goods and services demanded by the customers.

Answer 22

effective

Question 23

ACTIVITIES IN BUSINESS ORGANIZATION
It involves the use of resources to design, produce, distribute, and market goods and services. including research and development, design and engineering, purchasing, human resources, production, distribution, marketing, and selling services.

Answer 23

Operating Activities

Question 24

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION Who is the father of accounting?

Answer 24

Fra Luca Pacioli

Question 25

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION In Fra Luca Pacioli’s book, Summa, there are __ short chapters on bookkeeping.

Answer 25

36

Question 26

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION Three essential things to be a successful merchant:

Answer 26

1. Sufficient cash or credit; 2. a good bookkeeper, and 3. an accounting system (to view the business affairs at a glance)

Question 27

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION Three books that Pacioli discusses in the Summa:

Answer 27

1. the memorandum, 2. the journals, and 3. the ledger.

Question 28

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION In Pacioli’s book, he introduces the double entry accounting system in which for every _____ [should give] there exists a _____ [should have or should receive].

Answer 28

debet dare [should give] debet habere [should have or should receive]

Question 29

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION The book where all transactions are recorded, in the currency in which they are conducted, at the time they are conducted. Prepared in chronological order, is a narrative description of the business’s economic events.

Answer 29

Memorandum

Question 30

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION This is the merchant’s private book. The entries made here are in one currency, in chronological order, and in narrative form.

Answer 30

Journal

Question 31

PACIOLI’S DOUBLE-ENTRY BOOKKEEPING AND ITS EVOLUTION Is an alphabetical listing of all the business’s accounts along with the running balance of each particular account.

Answer 31

Ledger

Question 32

Fundamental concepts:

Answer 32

1. Entity Concept 2. Periodicity Concept 3. Stable Monetary Unit Concept 4. Going Concern

Question 33

FUNDAMENTAL CONCEPTS The most basic concept in accounting.

Answer 33

Entity Concept

Question 34

FUNDAMENTAL CONCEPTS This concept allows the users to obtain timely information to serve as a basis for making decisions about future activities. For the purpose of reporting to outsiders, one year is the usual accounting period.

Answer 34

Periodicity Concept

Question 35

FUNDAMENTAL CONCEPT It allows accountants to add and subtract peso amounts as though each peso has the same purchasing power as any other peso at any time. This is the basis for ignoring the effects of inflation in the accounting records.

Answer 35

Stable Monetary Unit Concept

Question 36

FUNDAMENTAL CONCEPTS It is assumed that the entity has neither the intention nor the need to enter liquidation or to cease trading. This assumption underlies the depreciation of assets over their useful lives.

Answer 36

Going Concern

Question 37

CRITERIA FOR GENERAL ACCEPTANCE OF AN ACCOUNTING PRINCIPLES A principle has ______ to the extent that it results in formation that is meaningful and useful to those who need to know something about a certain organization.

Answer 37

relevance

Question 38

CRITERIA FOR GENERAL ACCEPTANCE OF AN ACCOUNTING PRINCIPLES A principle has _____ to the extent that the resulting information is not influenced by the personal bias or judgment of those who furnish it. It connotes reliability and trustworthiness. It also connotes verifiability, which means that there is some way of finding out whether the information is correct.

Answer 38

Objectivity

Question 39

CRITERIA FOR GENERAL ACCEPTANCE OF AN ACCOUNTING PRINCIPLES A principle has ______ to the extent that it can be implemented without undue complexity or cost. These criteria often conflict with one another. In some cases, the most relevant solution may be the least objective and the least objective, and the least feasible.

Answer 39

feasibility

Question 40

BRANCHES OF ACCOUNTING Is the accountancy profession’s most significant service to the public.

Answer 40

Auditing

Question 41

BRANCHES OF ACCOUNTING -Auditing An _____ is the independent examination that ensures the fairness and reliability of the reports that management submits to users outside the business entity.

Answer 41

external audit

Question 42

BRANCHES OF ACCOUNTING -Auditing ______ performs routine tasks and undertakes detailed checking of the company’s accounting procedures.

Answer 42

Internal auditors

Question 43

BRANCHES OF ACCOUNTING -Auditing ______ are likely to go in for much more selective testing.

Answer 43

External auditors

Question 44

BRANCHES OF ACCOUNTING Is a mechanical task involving the collection of basic financial data. The data are first entered in the accounting records or the books of accounts and then extracted, classified, and summarized in the form of an income statement, balance sheet, and cash flow statement.

Answer 44

Bookkeeping

Question 45

BRANCHES OF ACCOUNTING Is focused on the recording of business transactions and the periodic preparation of reports on financial position and results of operations.

Answer 45

Financial Accounting

Question 46

BRANCHES OF ACCOUNTING Is a relatively new branch of accounting that has grown rapidly over the last 30 years. Are responsible for setting financial objectives, making plans based on those objectives, obtaining the finance needed to achieve plans, and generally safeguarding all the financial resources of the entity.

Answer 46

Financial Management

Question 47

BRANCHES OF ACCOUNTING It incorporates cost accounting data and adapts them for specific decisions that management may be called upon to make. A system that incorporates all types of financial and non-financial information from a wide range of sources.

Answer 47

Management Accounting

Question 48

BRANCHES OF ACCOUNTING It includes the preparation of tax returns and consideration of the tax consequences of proposed business transactions or alternative courses of action.

Answer 48

Taxation/Tax accounting

Question 49

BRANCHES OF ACCOUNTING Is concerned with the identification of the sources and uses of resources consistent with the provisions of city, municipal, provincial or national laws.

Answer 49

Government Accounting