Module 1

Question 1

Accounting is a (1)________of (2)__________, (3)__________ , and (4)___ _________economic information to permit informed judgments and decisions by the (5)___________.

Answer 1

1. Process
2. Identifying
3. Measuring
4. Communicating
5. Users of Information

Question 2

Accounting is a 1__________ activity. Its function is to provide 2,_______ information primarily financial in nature about economic 3__________ that is intended to be useful in making 4._________

Answer 2

1. Service
2. Quantitative
3. Entities
4. Economic Decisions

Question 3

is 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 decisions.

Answer 3

Accounting

Question 4

is the art of recording, classifying and summarizing in a significant manner, transactions and events which are in part at least of a financial character and interpreting the result thereof.

Answer 4

Accounting

Question 5

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

Answer 5

Accounting

Question 6

is the art of (1)_________,(2)_________ and (3)_____________ in a significant manner, transactions and events which are in part at least of a (4)____ _________ and (5)________ the result thereof.

Answer 6

1. Recording
2. Classifying
3. Summarizing
4. Financial Character
5. Interpreting

Question 7

It involves systematic methods to perform tasks to achieve objectives.

Answer 7

Accounting is a process

Question 8

the process of recognition or non-recognition of business transactions as accountable events for recording purposes. Note: the event is said to be accountable when it affects the assets, liabilities, equity, income and expenses of a business

Answer 8

Identifying

Question 9

the process of assigning peso value or amount to the identified accountable event

Answer 9

Measuring

Question 10

the process of preparation and distribution of financial reports. The information from different transactions and events identified, processed, measured in accounting information system to produce meaningful reports commonly known as financial statements.

Answer 10

Communicating

Question 11

It consists of definite techniques and its proper application requires the use of creative skills, functions, expertise and judgment.

Answer 11

Accounting is a practical art

Question 12

the preparation of journal entry in the process called journalizing.

Answer 12

Recording

Question 13

the grouping of accounts with similar nature and characteristics

Answer 13

Classifying

Question 14

the preparation of financial reports

Answer 14

Summarizing

Question 15

the analytical function

Answer 15

Interpreting

Question 16

It is a body of knowledge which has been systematically gathered, classified and organized.

Answer 16

Accounting is a social science

Question 17

Accounting is the _____________ because it quantifies and facilitates the communication between the economic entity (business) and the users. These users or decision- makers need information. The more important their decision is, the greater is their need for reliable information. Then, the role of accounting becomes important. The accounting functions to provide relevant information to users serves as the useful basis or guide in making economic sound decisions. Accounting helps the users of to understand the clear picture of the business in financial terms..

Answer 17

language of business

Question 18

are the fund providers of the business

Answer 18

Primary Users

Question 19

are those who provide money, investment, capital or other resources for a business

Answer 19

Investors

Question 20

could be a person, bank or other enterprise that has lent money or extended credit to another party/ies

Answer 20

Lender and Other Creditors

Question 21

are users of financial information other than primary users

Answer 21

Other Users

Question 22

work for others someone who is paid to

Answer 22

Employee

Question 23

an individual or enterprise. that purchases the products of the business.

Answer 23

Customer

Question 24

This types of users (BIR, SEC)

Answer 24

Government and their Agencies

Question 25

relating to people in general

Answer 25

Public

Question 26

Give the 3 Basic Accounting Concept

Answer 26

1. Entity Concept 2. Periodicity Concept 3. Stable Monetary unit Concept

Question 27

each entity should be evaluated separately; it separates owners from the business.

Answer 27

Entity Concept

Question 28

- divides the life of an entity into equal time periods, like month, quarter or years, allows users to obtain timely data for a specific period to serve as a basis of decision making.

Answer 28

Periodicity Concept

Question 29

treats peso amounts as though each peso has the same purchasing power as any other peso at any time; effects of inflation are ignored

Answer 29

Stable monetary unit concept

Question 30

Give the 8 Basic Accounting Principles

Answer 30

1. Objectivity principle 2. Historical Cost 3. Revenue Recognition Principle 4. Expense Recognition Principle 5. Adequate disclosure 6. Materiality 7. Consistency 8. Matching Principle

Question 31

accounting records and statements are based on reliable data and supported by verifiable documentation

Answer 31

Objectivity principle

Question 32

acquired assets should be recorded at their actual cost and not at what management thinks they are worth as at reporting date

Answer 32

Historical cost

Question 33

revenue is to be recognized in the accounting period when goods are delivered or services are rendered or performed

Answer 33

Revenue recognition principle

Question 34

should be recognized in the accounting period in which goods & services are used to produce revenue and not when entity pays for those goods & services

Answer 34

Expense recognition principle

Question 35

requires that all relevant information that would affect the user's understanding and assessment of the accounting entity be disclosed in the financial statements

Answer 35

Adequate disclosure

Question 36

dictates that financial reporting should only be concerned with information that is significant to affect evaluations and decisions.

Answer 36

Materiality

Question 37

dictates that firms should use the same accounting method from period to period to achieve comparability over time within a single enterprise.

Answer 37

Consistency

Question 38

the costs of doing business are recorded in the same period as the revenue they help to generate.

Answer 38

Matching Principle

Question 39

True or False 1. Primary Users are the fund providers of the business. 2. Accounting is both an art and a science. 3. Customers are interested in financial information which enables them to assess the stability and profitability of the company 4.revenue recognition principle states revenue is to be recognized in the accounting period when services are paid for cash 5. Expense recognition principle dictates that expenses should be recognized in the accounting period in which they are incurred 6. In entity concept, the business and the owner are treated as separate and distinct entity. 7. Summarizing function of accounting is the grouping of accounts with similar nature and characteristics 8. Other users are users of financial information other than primary users 9. All events in business are accountable events. 10. Accounting is a social science because it is a body of knowledge which has been

Answer 39

T T F F T T F T F T

Question 40

It is an information system that measures, processes and communicates financial information about an identifiable economic entity

Answer 40

Accounting

Question 41

These are business organizations or units that have an identity separate from those of its owners

Answer 41

Entity Concept

Question 42

It is the process of assigning peso value to the accountable events

Answer 42

Measuring

Question 43

It is the process of preparation and distribution of accounting information to the intended users

Answer 43

Communicating

Question 44

It is the principle stating that accounting records and statements should be based on reliable data and supported by verifiable documentation

Answer 44

Objectivity Principle

Question 45

It is the product or output of accounting process

Answer 45

Financial Statements

Question 46

These are the tangible products which can be sold to the customers of the business

Answer 46

Tangible Goods

Question 47

Information expressed in money.

Answer 47

Quantitative Financial Information

Question 48

This principle which dictates that firms should use the same accounting method from period to period to achieve comparability over time within a single enterprise

Answer 48

Consistency Principle

Question 49

This allows users to obtain timely data for a specific period to serve as a basis of decision making.

Answer 49

Periodicity Concept