Republic of the Philippines

Department of Education
Region 02 SCORE
Division of Cagayan
CAGAYAN NATIONAL HIGH SCHOOL
QUIZ 1
FUNDAMENTALS OF ACCOUNTANCY, BUSINESS AND MANAGEMENT 2

NAME:________________________________________ GRADE/SECTION:_____________________________

TEST 1. TRUE OR FALSE. Write TRUE if statement is correct, otherwise write FALSE.
1. The basic purpose of accounting is to provide information that is useful in making economic decisions.
2. Financial statements are the structured representation of an entity’s financial position and results of operation.
3. Information on financial position is primarily provided by the statement of financial performance.
4. The elements directly related to the measurement of financial position in the balance sheet are assets, liabilities, and
equity.
5. Financial position simply refers to the condition of an entity’s assets, liabilities and equity and their interrelationships.
6. A constructive obligation arises from future business practices or published policies that have created a valid
expectation on the part of others that you will pay them.
7. Accounts Receivable is usually assumed as trade receivable unless there is evidence to the contrary.
8. Economic benefits means the potential of a resource to provide you with cash, directly or indirectly.
9. Trade payables are obligations arising from sale of inventory in the ordinary course of business.
10. Some receivables and payables are presented as current in the Statement of financial position even if they are
collectible or payable beyond 12 months.
TEST 2. IDENTIFICATION. Write the word or phrase that is defined or indicated.
11. Obligations expected to be liquidated through use of current assets.
12. Statement showing financial condition at a point in time.
13. The end product of accounting process.
14. The exclusive right to enjoy or to prevent others from enjoying the economic benefits of resource.
15. If a certain resource provides economic benefits in only one accounting period, it is not an asset but
____________________.
16. An account used to record advance payment made to suppliers for purchase of inventory that have not yet been
delivered by the supplier.
17. Line item consisting of goods held for sale in the ordinary course of business.
18. Line item consisting of the portion of a long term loan that is maturing within 12 months from the end of reporting
period.
19. Line item consisting of loans with original term of 1 year or less.
20. The caption used to describe a group of accounts with similar nature.
TEST 3. MULTIPLE CHOICE. Write the letter of the best answer. Use CAPITAL LETTERS ONLY.
21. Information on financial performance is provided by
A. Statement of changes in equity C. Statement of financial position
B. Statement of Cash Flows D. Statement of Profit or Loss
22. Information on changes in financial position is provided by
A. Statement of changes in equity C. Statement of financial position
B. Statement of Comprehensive Income D. Statement of Profit or Loss
23. Which of the following are the elements of financial statements?
I. Assets II. Liabilities III. Equity IV. Income V. Expenses
A. I, II, III B. IV, V C. I, II, III, IV D. I, II, III, IV, V
24. The following terms are used synonymously with “equity” except
A. Capital B. Net Assets C. Net worth D. Revenues
25. The elements directly related to the measurement of statement of financial position
I. Assets II. Liabilities III. Equity IV. Income V. Expenses
A. I, II, III B. IV, V C. I, II, III, IV D. I, II, III, IV, V
26. Which of the following are the elements of statement of comprehensive income?
I. Assets II. Liabilities III. Equity IV. Income V. Expenses
A. I, II, III B. IV, V C. I, II, III, IV D. I, II, III, IV, V
27. The following are examples of current assets except
A. Prepaid Insurance B. Cash C. land D. Trade Receivable
28. The following are examples of current liabilities except
A. Unearned Income B. Utilities payable C. Salaries payable D. Accumulated Depreciation
29. Prepaid Assets and Accrued liabilities are normally classified as
A. Current Asset; Current liability C. Current Asset; Noncurrent Liability
B. Noncurrent Asset; Current Liability D. Noncurrent Asset; Noncurrent Liability
30. Which of the following statements does not correctly describe an asset?
A. It is a result of future event C. there is an inflow of future economic benefits
B. It may either be current or noncurrent D. it may either be tangible or intangible

Prepared by: AR-JAY C. ROMERO