Documente Academic
Documente Profesional
Documente Cultură
2. The basic purpose of the conceptual framework is (choose the incorrect one)
a. To assist the FRSC in developing accounting standards.
b. To assist prepares of financial statements in applying accounting standards.
c. To assist the FRSC in reviewing and adopting international accounting standards.
d. To assist the Board of Accountancy in promulgating rules and regulations affecting the
pratice of accountancy in the Philippines.
3. Financial accounting can be broadly defined as the area of accounting that prepares
a. General purpose financial statements to be used by parties internal to the entity only.
b. Financial statements to be used by investors only.
c. General purpose financial statements to be used by parties both internal and external
to the entity.
d. Financial statements to be used primarily by management.
5. Which of the following statements best describes the term “financial position”?
a. The net income and expenses of an entity.
b. The net of financial assets less liabilities of an entity.
c. The potential to contribute to the flow of cash and cash equivalents to the entity.
d. The assets, liabilities, and equity of an entity.
10. The overriding criterion by which accounting information can be judged is that of
a. Usefulness for decision making
b. Freedom from bias
c. Timeliness
d. Comparability
11. Which requires that information not be biased in favor of one group of users to the detriment
of others?
a. Relevance
b. Reliability
c. Verifiability
d. Neutrality
13. Which statement is incorrect concerning constraints on relevant and reliable information?
a. In achieving a balance between relevance and reliability, the overriding consideration
is how best to satisfy the economic decision-making needs of users.
b. The balance between benefit and cost is a pervasive constraint rather than a
qualitative characteristics.
c. The cost of providing information should exceed the benefits derived from the
information.
d. To provide information on a timely basis, it may often be necessary to report before
all aspects of a transaction or event are known, thus impairing reliability.
15. Users are assumed to have a reasonable knowledge of business and economic activities and
accounting and a willingness to study the information with reasonable diligence.
a. Relevance
b. Reliability
c. Understandability
d. Comparability
17. Financial statements portray the financial effects of transactions and other events by
grouping them into broad classes according to their economic characteristics. These broad
classes are termed as the
a. Elements of financial statements.
b. Features of accounting
c. Accounting constraints
d. Concepts of capital and capital maintenance
18. An asset is
a. A resource controlled by the entity as a result of past events and from which future
economic benefits are expected to flow to the entity.
b. A present obligation of the entity arising from past events the settlement of which is
expected to result in an outflow from the entity of resources embodying economic benefits.
c. The residual interest in the assets of the entity after deducting all of its liabilities.
d. Equivalent to all financial resources of the entity.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
22. When economic benefits are expected to arise over several accounting periods and the
association with income can only be broadly or indirectly determined, expenses are recognized
on the basis of
a. Strict matching
b. Systematic and rational allocation
c. Immediate recognition
d. Realization
Accounting Process
1. It is the means by which an entity records and stores the financial and managerial
information from its transactions so that it can retrieve and report the information in an
accounting statement.
a. Accounting control
b. Internal control
c. Accounting system
d. Double entry system
3. A chart of accounts is
a. A subsidiary ledger
b. A listing of all account titles
c. A general ledger
d. A general journal
4. Which of the following types of accounts measure economic flows over a period of time?
a. Real accounts
b. Nominal accounts
c. Mixed accounts
d. Control accounts
7. Debits
a. Increase assets and decreases expenses, liabilities, revenue and equity.
b. Increase assets and equity, and decreased liabilities, expenses, and revenue.
c. Decrease assets and expenses, and increase liabilities, revenue and equity.
d. Increase assets and expenses, and decrease liabilities, equity and revenue.
10. Which of the following must be met before an event should be recorded?
a. The event must be an arm’s length transaction.
b. The event must be repeatable in a future period.
c. The event must be measurable in financial terms.
d. The event must be disclosed in the reported notes.
12. It is a working paper that lists all the entity’s general ledger accounts and their account
balances
a. Trial balance
b. General ledger
c. Worksheet
d. Chart of accounts
15. which of the following errors would be detected when a trial balance is properly prepared?
a. An amount that was entered in the wrong account.
b. A transaction that was entered twice.
c. A transaction that was omitted.
d. None of the above.
18. Which of the following would not be a correct form for an adjusting entry?
a. A debit to revenue and a credit to liability.
b. A debit to an expense and a credit to a liability.
c. A debit to a liability and a credit to a revenue.
d. A debit to an asset and a credit to a liability.
20. The trial balance debit or credit amount of each account is combined with the amount of any
debit or credit adjustment to that account to determine the new balance of the account. This
process is known as
a. Footing
b. Cross footing
c. Balancing
d. Totaling
23. The adjusting entry for income earned but not yet collected will
a. Increase liability
b. Increase asset
c. Decrease asset
d. Decrease liability