Test Question For Exam Chapter 1 To 6

FUNDAMENTAL OF ACCOUNTING BUSINESS & MANAGEMENT 1- PRE-FINAL
Name:__________________________________________________
Grade/Section:__________________ Date:____________
A. DIRECTION: Choose the letter that corresponds to the correct answer. Circle the letter that corresponds to
your answer:
1. Which of the following correctly defines accounting?
A. It is a process involving one business function only to over
see tax collection entities.
B. It is a systematic recording of financial transaction.
C. It is incomprehensive process of recording business
transaction.
D. It is a process of analyzing only transactions to over sight
business agencies.
2.. Which of the following is not one of the designations of an accountant?
A. Certified Management Accountant
B. Certified private accountant
C. Certified public accountant
D. Certified General Accountant
3. Which of the following is the components of accounting?
A. Analyzing C. Summarizing
B. Reporting D. All of the above
4. Which of the following handles basic accounting functions of a business?
A. Bookkeeper C. Supervisor
B. Human resources officer D. Branch manager
5. What kind of reports provide the information captured by the accounting system?
A. Financial Statements C. Income Statement
B. Balance Sheet D. Portfolio
6. Which of the following ways are done by accounting departments as ways of monitoring the money of the
firm?
A. By dealing with payroll and taxes
B. By analyzing transaction patterns
C. By recording transactions
D. All of the above
7. The development of accounting is closely related to the following; except:
A. Business acquisition
B. Taxation
C. Trading activities of temples
D. Early auditing systems
8. It is based laws enacted through a highly political legislative
Process.
A. Tax accounting C. Management Accounting
B. Auditing D. Accounting education
9. It refers to the preparation of general-purpose financial
Statements.
A. Managerial C. Financial Accounting
B. Accounting Research D. Cost Accounting
10. Report on the total cost of materials and labor used in the production?
A. Cost Accounting C, Financial Accounting
B. Government Accounting D. None of the above
11. The accounting guideline that requires financial statement information to be supported by independent,
unbiased evidence other than someone's belief or opinion is the:
a. Business entity principle b. Monetary unit principle
c. Going-concern principle d. Cost principle e. Objectivity principle
12. The principle that requires every business to be accounted for separately and distinctly from its owner or
owners is known as the:
a. Objectivity principle b. Business entity principle
c. Going-concern principle d. Revenue recognition principle e. Cost principle
13. The rule that requires financial statements to reflect the assumption that the business will continue
operating instead of being closed or sold, unless evidence shows that it will not continue, is the: 37 This
Teaching Guide is a donation by CHED to DepEd. It is for reference purposes only.
a. Going-concern principle b. Business entity principle
c. Objectivity principle d. Cost Principle e. Monetary unit principle
14. To include the personal assets and transactions of a business's owner in the records and reports of the
business would be in conflict with the:
a. Objectivity principle b. Realization principle
c. Business entity principle d. Going-concern principle e. Revenue recognition principle
15. The objectivity principle:
a. means that information is supported by independent, unbiased evidence
b. means that information can be based on what the preparer thinks is true
c. means that financial statements should contain information that is optimistic
d. means that a business may not re-organize revenue until cash is received
16. Marian Mosely is the owner of Mosely Accounting Services. Which accounting principle requires Marian to
keep her personal financial information separate from the financial information of Mosely Accounting Services?
a. Monetary unit principle b. Going-concern principle
c. Cost principle d. Business entity principle
17. Which of the following accounting principles would require that all goods and services purchased be recorded
at cost?
a. Going-concern principle b. Continuing-concern principle
c. Cost principle d. Business entity principle
B. Matching. Match the following words with their definition: Put your answer the space provided.
a. Going concern principle k. Financial Accounting u. Monetary unit
b. Objectivity principle l. Financial v. Time period
c. Matching principle m. Managerial w. Materiality
d. Materiality principle n. Tax Accounting x. Objectivity
e. Time period principle o. Auditing Internal
f. Cost principle p. Auditing External
g. Disclosure principle q. Accounting
h. Monetary unit principle r. Cost Accounting
i. Accrual accounting principle s. Government Accounting
j. Conservatism principle t. Business entity
___________________ 1. All relevant information should be included in the financial reports.

___________________ 2. In case of doubt, assets and income should not be overstated.
___________________ 3. Assume that the company will continue indefinitely.
___________________ 4. All transactions should be supported by unbiased evidence.
___________________ 5. Expenses should be recorded in the period when the revenue is generated.
___________________ 6. Minimal costs incurred should be recorded as an expense.
___________________ 7. A Philippine company should report financial statements in pesos.
___________________ 8. A barber who performs services for a client should record revenue.
___________________ 9. Statement of Financial position should be recorded as of December 31, 2015.
___________________ 10. A company that purchases furniture should record it at its acquisition price.
___________________11. Is the broadest branch and is focused on the needs of external users.
___________________12. Preparation of general-purpose financial statements
___________________13. Evaluation of the performance of a sales department
___________________14. Develop standards to address a new business set up
___________________15. Review tax compliance of the business
___________________16. Evaluate whether a branch of the business complies with the collection and deposit
policy of the company .
___________________17. Review whether the financial statements are presented fairly and in compliance with
accounting standards.
___________________18. Report on the spending of government funds
___________________19. Report on the total cost of materials and labor used in the production
___________________20. The owner-manager bought a computer for personal use. The invoice was given to the
accountant who recorded it as an asset of the business.
___________________21. The statement of financial position of a company included an equipment purchased
from Japan for 350,000 yen. It was reported at that amount in the statement of financial position while all the
other assets were reported in Philippine pesos.
___________________22. No financial statements were prepared by Michael Go for his business. He explained
that he will prepare the statements when he closes the business, which he predicts to take place after 20 years.
___________________23. Aside from owning a shoe store, Albert operates a canteen. The assets of the canteen are
reported in the statement of financial position of the shoe store.
___________________24. Purchased a hammer at a cost of PHP500. This was recorded as an asset and expense to
decrease its value by PHP50 per year for 10 years.
___________________25. A food company ordered a machine needed in the assembly line of its production
department. Upon order, the machine was immediately listed as one of its assets.
C. Fill out the blank matrix on the board.
ITEM Sole Proprietorship Partnership Corporations Cooperatives

1. Number of
Possible
Owners
2. Management
(who
manages the
business)
3. Termination
of the
business
4. Government
agency
assigned
primarily to
regulate
5. Transfer of
Ownership
6. Liability of
Owners
D. Ask them to identify if it is a service, merchandising, manufacturing business or hybrid:

1. Provides services to customers
2. Sells goods to customers
3. Raw materials are available
4. Goods to be sold are purchased from a supplier
5. Goods to be sold are produced by the company itself
6. Supplies are used, no goods to be sold
7. Bakery
8. Barber shop
9. Cellphone store
10. Abenson appliances
E. DESCRIBE EACH TRANSACTION AND MAKE IT BALANCE.
Date ASSETS LIABILITIES OWNER’s EQUITY

Cash Supplies Equipment
Bal. 60,000 7,500 300,000 75,000 292,500
1
2
3
4
5
6
7
1. The owner invested cash of PHP150,000 from providing services.

2. Purchased equipment at PHP20,000 for cash.
3. The owner withdrew cash of PHP112,500 and paid in cash.
4. The company purchased supplies on account of Php5,000.
5. The owner withdrew cash of PHP15,000 and paid in cash.
6. Paid liabilities worth PHP53,000.
7. The owner withdrew supplies worth PHP8,000.
God bless student!

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What are the main components of accounting?

What are the main principles of accounting?

FUNDAMENTAL OF ACCOUNTING BUSINESS & MANAGEMENT 1- PRE-FINAL

___________________ 1. All relevant information should be included in the financial reports.

C. Fill out the blank matrix on the board.

ITEM Sole Proprietorship Partnership Corporations Cooperatives

D. Ask them to identify if it is a service, merchandising, manufacturing business or hybrid:

E. DESCRIBE EACH TRANSACTION AND MAKE IT BALANCE.

Date ASSETS LIABILITIES OWNER’s EQUITY

1. The owner invested cash of PHP150,000 from providing services.

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