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1st Year - First Sem (Finals) > FAR > Flashcards

FAR Flashcards

1
Q

A physical count of inventory is usually taken

A

at the end of fiscal year

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2
Q

The periodic inventory system is used commonly by companies that sell

A

Low priced, high volume merchandise

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3
Q

Gross margin equals the difference between net sales and

A

COGS

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4
Q

A trade discount is

A

not shown anywhere

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5
Q

A merchandiser will earn an operating income of ZERO when

A

Operating expenses = Net Sales

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6
Q

Who shoulders the transpo cost:

FOB destination

A

Seller

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7
Q

Who shoulders the transpo cost:

FOB shipping point

A

Buyer

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8
Q

Net sales minus Cost of Sales

A

Gross Profit

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9
Q

Gross profit plus or minus Income or Expenses

A

Profit

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10
Q

System that records Low priced, High volume merchandise

A

Perpetual inventory

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11
Q

The inventory account is continuously updated

A

Perpetual

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12
Q

Amount deducted from the catalog price for an item of merchandise is called

A

Trade discount

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13
Q

Which account is used in Periodic but not in Perpetual inventory system

A

Purchases

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14
Q

COGS

A

Net purchase+ Beginning inventory+Transportation - Ending inventory

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15
Q

Profit

A

Net Sales - COGS - Expenses

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16
Q

If beginning and ending inventory is ignored profit would be

A

Understated

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17
Q

The amount of Cost of goods available for sale during the year depends on the amounts of

A

Beginning inventory and net purchases

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18
Q

When a seller of merchandise inventory allowed a customer a reduction from the original price for defective goods the seller will issue to the customer a

A

Credit Memo

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19
Q

When the seller advances the transportation costs and the terms of sales are FOB Shipping point the seller records the payment of transportation costs by debiting

A

Accounts Receivable

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20
Q

Net Sales - COGS

A

Gross Profit

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21
Q

T or F

There is no need for physical inventory count in the perpetual inventory system.

A

True

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22
Q

T or F

The operating cycle involves the purchase and sale of merchandise inventory as well as the subsequent collection of cash

A

True

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23
Q

T or F

A business can shorten its operating cycle by increasing its percentage of cash sales and reducing its percentage of credit sales

A

True

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24
Q

Net Purchase + Transportation In

A

Net Cost of Purchases

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25
Q

Accounts that would not appear on a worksheet that uses periodic inventory system

A

COGS

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26
Q

The closing entries for a merchandising entity using the perpetual inventory system do not affect the

A

Merchandise inventory account

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27
Q

Which of the following accounts would not be closed by a merchandising entity that uses perpetual inventory system?

A

Merchandise inventory account

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28
Q

Which account is closed by debiting the account

A

Purchase Returns and Allowances

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29
Q

Alibangbang and Sol decided to go business together They started the essential terms of their agreement along with their rights and duties. Alibangbang and Sol created an

A

Articles of Partnership

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30
Q

Cabrera inherited a large amount of money from his parents. Cabrera wishes to start his own business in Batangas. His lawyers encourage him to make it a corporation. What disadvantage of a sole proprietorship are the lawyers trying to avoid

A

Unlimited Liability

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31
Q

The person who assumes full co-ownership of a partnership including unlimited liability is a

A

General Partner

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32
Q

The partner who can lose only what he has invested in a business is the

A

Limited Partner

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33
Q

A budding entrepreneur wants to start a business but is unsure of the legal form suited for her. Short of cash, she has to take the form that is least expensive and most flexible in terms of decision making and implementation. Which would you recommend?

A

Sole Proprietorship

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34
Q

Jumawan loves to cook. She receives unqualified praise whenever she prepares a meal for someone. Encouraged by these compliments and eager to put her culinary talents to good use, Jumawan decides to open a boutique restaurant in Dumaguete City. Since she plans to maintain complete control of the business, she will most likely organize it as

A

Sole Proprietorship

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35
Q

Penetrante owns and operates a large hardware store in Cabanatuan City that employs about forty-five personnel. She delegates some of the decision making to two supervisors. Penetrante’s business is organized as

A

Sole Proprietorship

36
Q

Burgos, Del Mundo and Gonzales are partners in an accounting firm with each partner owningan equal share of the business. Del Mundo died suddenly of a heart attack. What will most likelybecome of the partnership

A

Burgos and Gonzales will be able to purchase Del Mundo’s interest from his estate

37
Q

Non –cash assets invested into a partnership are recorded at their

A

Fair Market Value

38
Q

Essence of Partnership

A

Divide Profit and Loses

39
Q

Kinds of Partner

One is liable to the extent of his separate property after all the assets of the partnership are exhausted

A

General Partner

40
Q

Kinds of Partner

One who is actually not a partner but who represents himself as one.

A

Nominal partner or partner by estoppel

41
Q

Kinds of Partner

One who is designated to wind up or settle affairs of partnership after dissolution

A

Liquidating Partner

42
Q

Kinds of Partner

One who does not take active part in the business of the partnership though may be known as a partner

A

Silent Partner

43
Q

Kinds of Partner

One who does not take active part in the business of the partnership and is not known as a partner

A

Dormant Partner

44
Q

Kinds of Partner

One who takes active part in the business of the partnership but is not known to be a partner by outside parties.

A

Secret Partner

45
Q

Kinds of Partner

One who is liable only to the extent of his capital contribution. He is not allowed to contribute industry or services only.

A

Limited Partner

46
Q

Kinds of Partner

One who contributes money or property to the common fund of the partnership

A

Capitalist Partner

47
Q

Kinds of Partner

One who contributes his knowledge or personal service to the partnership

A

Industrial Partner

48
Q

Kinds of Partner

One whose partners appointed as manager of the partnership

A

Managing Partner

49
Q

One which failed to comply with all the legal requirements for its establishment

A

De facto partnership

50
Q

One which has complied with all the legal requirements for its establishment

A

De jure partnership

51
Q

The price which an asset or liability could be exchanged in a current transaction between knowledgeable, unrelated willing parties.

A

Fair Value

52
Q

Estimated amount that a willing seller would receive from a financially capable buyer for the sale of the asset in a free market.

A

Fair market value

53
Q

is a person who takes initiative in founding and organizing the corporation and receives consideration therfor.

A

Promoter

54
Q

All incorporators are

A

corporators

55
Q

not all corporators are

A

incorporators

56
Q

These shares entitle the holder to certain advantages or benefits over the holders of ordinary shares.

A

Preference Shares

57
Q

Share One without any value appearing on the face of the certificate of stocks

A

No par value shares

58
Q

Shares. One in which a specific amount is fixed in the articles of incorporation and appearing on the certificate stock.

A

Par value shares

59
Q

The minimum issue price of the shares

A

Par value shares

60
Q

Minimum stated value of a no par value share

A

P5

61
Q

These shares entitle the holder to an equal pro rata division of profits without any preference.

A

Ordinary shares

62
Q

Shares. may be issued by the corporation when expressly provided in the articles of incorporation.

A

Redeemable shares

63
Q

A stock that has been issued by the corporation as fully paid and later reacquired but not retired.

A

Treasury shares

64
Q

Those issued to promotors as compensation in promoting the incorporation.

A

Promotion shares

65
Q

A stock which is convertible or changeable from one class to another class.

A

Convertible shares

66
Q

Government organization registered ( Corporation and Partnership)

A

SEC
Securities and Exchange Commission

67
Q

81.What is the primary disadvantage of both a sole proprietorship and a partnership that a corporation overcomes?

A

Unlimited Liability

68
Q

A corporation whose stock can be purchased by anyone and is traded in stock markets is known as a

A

Open corporation

69
Q

The arbitrary value assigned to a share of stock is called

A

Par value

70
Q

The owners of shares in a stock corporation

A

shareholders

71
Q

FOB destination

A

Credir Accounts Payable

72
Q

Freight Collect

A

Buyer

73
Q

starting capital of partnership to register

A

3K

74
Q

it enjoys the right of succession

A

corporation

75
Q

perpetual existence

A

Corporation

76
Q

artificial being

A

corporation

77
Q

the subscription that is failed to payed

A

deliquent

78
Q

Corpus

A

Corporation

79
Q

kita ng shares

A

Dividends

80
Q

The directors of a corporation are responsible

A

for declaring dividends

81
Q

The difference between issued shares and outstanding shares of stock is

A

Treasury stock

82
Q

Which of the following are changed when a corporation buys equipment for cash?

A

Current Assets

83
Q

The purchase of treasury ordinary shares

A

Decreases issued ordinary shares

84
Q

When shares without par value are sold

A

the proceeds shall be credited to Share capital

85
Q

In a partnership liquidation, the final cash distribution to the partners should be made in accordance with the

A

safe payments computations

86
Q

The accumulated balance of periodic earnings, net of dividend distributions, prior period adjustments and other capital adjustments.

A

Retained earnings

87
Q

In accounting for liquidation of a partnership, cash payments to partners after all outside creditors’ claims have been satisfied, but before final cash distribution, should be according to

A

safe payments computations

1st Year - First Sem (Finals) (2 decks)

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