Accounting is a process of recording, Only business activities that can be

An activity carried out by a business to

_______, analyzing, ________, and measured in dollars and cents are
provide goods and services in exchange
reporting of financial information to the recorded. This is accordance with the
for money is known as a __________.
stakeholders of the business. __________ concept.

Personal financial activities of the Transactions are recorded based on Transactions should be recorded in
owner of a business are not recorded in reliable and verifiable information. This accounts at their original cost shown in
the books of the business. This complies is in accordance with the __________ source documents. This practice
with the ________ concept. concept. complies with the __________ concept.

An audit is the independent

examination that ensures the fairness A business transaction is the occurrence One characteristics of a corporation is
and reliability of the reports that of an event or of a condition that must that its owners are personally liable for
management submits to users outside be recorded. any losses incurred by the business.
the business entity.

The set of guideline and procedures

that constitutes acceptable accounting Classification reduces the effects of The liability of corporate stockholders is
practice at a given time is GAAP, which numerous transactions into useful limited to the amount of their
stands for generally accepted groups or categories. investment.
accounting process.

Most members of the accountancy

The terms bookkeeping and accounting A corporation is an economic unit that is
profession are Certified Public
are synonymous. legally separate from its owners.
Accountants.

Manufacturing companies buy raw

The entity concept states that the
The personal liability of a partner is materials, convert them into products
transactions of different entities should
limited to the amount of his investment. and then sell the products to other
not be accounted for together.
companies or to final consumers.

A partnership is a business is owned and

operated by two or more persons who
The Philippine accountant considers as
Accounting is often characterized as the bind themselves to contribute money,
the common unit of measure for all
“language of business” property or industry to a common fund,
business transactions.
with the intention of dividing the profits
among themselves.

For accounting purposes, a business and Summarization reduces the effects of

A partnership is always owned by two
its owner are considered as one and the numerous transactions into useful
individuals.
same. groups or categories.
Stable Monetary Unit Business Transaction Classifying, Summarizing

Historical Cost Objectivity Entity

False True True

False True False

True False False

True True False

True True True

True False False

 For reporting purposes, the personal
Government accounting deals solely All members of the accountancy
assets and debts of a business owners
with the identification of the sources of profession are Certified Public
should be combined with the assets and
resources consistent with laws. Accountants.
debts of the business.

Accounting is a service activity whose

A separate legal entity organized in
function is to provide quantitative
A corporation is a business owned by its accordance with codes and laws and in
information about economic entities
stockholders. which ownership is divided into shares
that is intended to be useful in making
of stock is referred to as a corporation.
economic decisions.

Krishna started a speech therapy center. Which of the following is a trading

She also sells professional books on business?
A process considered as Bookkeeping.
speech development. What is the A clinic, a law firm, a pharmacy, a
nature of her business? telecommunications company.

A sole proprietor has limited risk with A business which prepares financial The __________ concept assumes that
respect to the amount of resources he statements every year is following the the business has an indefinite economic
invests in his business. __________ concept. life.

To which are of accounting are

Which for of business organization is
Define accountancy with simple terms. generally accepted accounting
characterized by limited liability?
principles primarily relevant?

Which of the following is not one of the Which accounting concept should be
three types of business activities? Partnership is not a separate legal entity considered if the owner of a business
Investing, Financing, Marketing, from the partners themselves. takes goods from inventory for his
Operating personal use?

Which accounting concept states that Which of the following accounting

omitting or misstating this information concepts means that similar items Assets are usually valued under what
could influence users of the financial should receive a similar accounting basis?
statements? treatment?

Accountants employed by a particular

The financial accounting process
The measurement, processing and business firm or not-for-profit
provides information about economic
communication of financial information organization, perhaps as chief
activities of an enterprise for a specific
about an identifiable economic entity is accountant, controller or financial vice
accounting period that is shorter that
accounting. president, are said to be engaged in
the life of the enterprise.
___________.
 True True False

True True True

A pharmacy Service and Trading Recording

Going Concern Periodicity False

Measuring economic activities and

Financial Accounting Sole Proprietorship and Partnership
preventing fraud

The business entity concept True Marketing

Historical Cost Consistency The materiality concept

Going Concern Public Accounting True

 Which accounting process is the The ______ is a document that shall
The consistency standard of reporting recognition or non-recognition of NOT be submitted in support of the
requires that- business activities as accountable requirements in the recognition or non-
events? recognition of business activities.

The basic purpose of accounting is to During the lifetime of an entity,

provide quantitative financial accountants produce financial
The skills needed to be developed by
information about a business enterprise statements at arbitrary points in time in
Filipino accountants are-
that is useful in making rational accordance with which basic accounting
economic decision. concept?

Which accounting concepts states that

Stating assets and liabilities and changes
an accounting transaction should be
The financial statements should be in them in terms of a common financial
supported by sufficient evidence to
stated in terms of a common financial denominator is a prerequisite in
allow two or more qualified individuals
denominator measuring financial position and
to arrive at essentially similar
periodic net income.
conclusion?

Carrying out professional A professional accountant should be Proponents of historical costs maintain
responsibilities diligently and in straightforward and honest in all that in comparison with all other
accordance with applicable technical professional and business relationships. valuation alternatives for general
and professional standards is This is in consonance with the purpose financial reporting, statements
descriptive of the principle of- fundamental principle of- prepared using historical cost are more-

This principle requires relevant

information to form part of financial The principle of objectivity include the The concept of matching is best
statements for decision-making concept of- demonstrated by-
purposes.

Accounting changes are often made and

the monetary impact is reflected in the The main function is to establish and
The measurement phase of accounting
financial statements of an entity even improve accounting standards that will
is accomplished by-
though, in theory, this may be a be generally accepted in the Philippines.
violation of the accounting concept of-

The periodicity concept involves

Which are of public accounting means
dividing the life of ac business entity
the examination of financial statements Accountants do not recognize that the
into accounting periods of equal length
by a CPA for the purpose of expressing value of the peso changes over time.
thus enabling the financial users to
an opinion as the fairness of the this concept is called the-
periodically evaluate the results of
statements?
business operations.

They encompass the conventions, rules The Filipino accountants should possess The concept of the accounting entity is
and procedures necessary to define knowledge to enable to compete applicable whenever accounting is
what accepted accounting practice is. internationally. involved.
 The effect of changes in accounting
School Identification Card Identifying
upon income be properly disclosed.

Intellectual skills, Interpersonal Skills,

Periodicity True
Communication skills.

Unit of Measure Stable Monetary Unit Objectivity

Objective Integrity Professional competence and due care

Associating effort with accomplishment Verifiability Materiality

Philippine Institute of CPAs Processing data Consistency

True Stable monetary unit concept External Auditing

General Knowledge, Organizational and

Business Knowledge, Information Generally Accepted Accounting
True
Technology Knowledge, Accounting Principles
Knowledge