FAR1C1

Question 1

What ASC stands for?

Answer 1

Accounting standards council

Question 2

What organization defines accounting as a service activity, its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision?

Answer 2

Accounting standards council or ASC

Question 3

What AICPA stands for?

Answer 3

American Institute of Certified Public Accountants

Question 4

What organization defines accounting as an 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 financial character and interpreting the result thereof?

Answer 4

American Institute of Certified Public Accountants or AICPA

Question 5

What AAA stands for?

Answer 5

American Accounting Association

Question 6

What organization defines accounting as the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of the information?

Answer 6

American Accounting Association or AAA

Question 7

What are the three (3) important points in the definition of accounting according to Accounting Standards Council?

Answer 7

1) Accounting is about quantitative information.
2) The information is likely to be financial in nature.
3) The information should be useful in decision making.

Question 8

What are the three (3) important points in the definition of accounting according to Accounting Standards Council?

1) Accounting is about ** information.
2) The information is likely to be ** in nature.
3) The information should be ** in ** making.

Answer 8

1) Accounting is about quantitative information.
2) The information is likely to be financial in nature.
3) The information should be useful in decision making.

Question 9

What organization’s definition of accounting has stood the test of time?

Answer 9

American Accounting Association or AAA

Question 10

What are the three (3) components in American Accounting Association definition of accounting?

Answer 10

1) Identifying as the analytical component.
2) Measuring as the technical component.
3) Communicating as the formal component.

Question 11

This accounting process is the recognition or nonrecognition of business activities as “accountable” events.

Not all business activities are accountable.

For example, the hiring of employees, the death of the entity president and the entering into a contract are all business activities such events are not accountable because they cannot be quantified or expressed in terms of a unit of measure.

Answer 11

Identifying

Question 12

When is an event accountable or quantifiable?

An event is accountable or quantifiable when it has an *** on assets, liabilities and equity.

In other words, the subject matter of accounting is ** ** or the ** of economic ** and economic ***.

Only economic ** are ** and *** in accounting.

** and ** matters are beyond the *** of accounting.

Answer 12

An event is accountable or quantifiable when it has an effect on assets, liabilities and equity.

In other words, the subject matter of accounting is economic activity or the measurement of economic resources and economic obligations.

Only economic activities are emphasized and recognized in accounting.

Sociological and psychological matters are beyond the province of accounting.

Question 13

What are the two (2) types of economic activities?

Answer 13

1) External transactions
2) Internal transactions

Question 14

What are the two (2) types of economic activities?

1) ** transactions
2) ** transactions

Answer 14

1) External transactions
2) Internal transactions

Question 15

They are also known as exchange transactions, are those economic events involving one entity and another entity.

Answer 15

external transactions

Question 16

What are external transactions?

• They are also known as ** transactions, are those ** events involving one ** and ** entity.

Answer 16

They are also known as exchange transactions, are those economic events involving one entity and another entity.

Question 17

What are the five (5) examples of external transactions?

Answer 17

1) Purchase of goods from a supplier
2) Borrowing money from a bank
3) Sale of goods to a customer
4) Payment of salaries to employees
5) Payment of taxes to the government

Question 18

What are the five (5) examples of external transactions?

1) ** of ** from a supplier
2) ** ** from a bank
3) ** to a **
4) ** of ** to employees
5) ** of ** to the government

Answer 18

1) Purchase of goods from a supplier
2) Borrowing money from a bank
3) Sale of goods to a customer
4) Payment of salaries to employees
5) Payment of taxes to the government

Question 19

They are economic activities that take place entirely within the entity. Production and casualty loss are examples of internal transactions.

Answer 19

Internal transactions

Question 20

What are internal transactions?

They are economic ** that take place entirely within the **. Production and casualty loss are examples of *** transactions.

Answer 20

• They are economic activities that take place entirely within the entity. Production and casualty loss are examples of internal transactions.

Question 21

It is the process by which resources are transformed into products.

Answer 21

Production

Question 22

It is any sudden and unanticipated loss from fire, flood, earthquake and other event

Answer 22

Casualty