Exercise 1.

History, Development, and

Functions of the Standard-Setting
Bodies
You have until October 15 to answer this Exercise.
Hi Hershey, when you submit this form, the owner will be able to see your name and email address.

Required
1.Student Number
Kindly enter your complete student number. Otherwise, the system may not capture your grade.
e.g., 2015-12787-MN-0

2.Which of the following is considered as the language of business

(1 Point)
Marketing
Production
Accounting
Administration
3.Which of the following is true?
I. Accounting is a service activity intended to fulfill a useful information in society;
II. Accounting involves the art of art of recording, classifying and summarizing
transaction and events, and interpreting the results thereof;
III. Accounting is an art but not a science;
IV. Accounting provides quantitative financial information intended to be useful
in making economic decisions.
(1 Point)
I, II, IV
I, II, III, IV
I, II, III
II, III, IV
4.Accounting is an art because
(1 Point)
the necessity of applying creative skill and ability
of accounting theory
 of the existence of a body knowledge governing accounting practice
of accounting standards
5.The information provided by financial reporting pertains to
(1 Point)
individual business enterprises, rather than to industries or an economy as a whole or to
members of society as consumers.
business industries, rather than to individual enterprises or an economy as a whole or to
members of society as consumers.
an economy as a whole and to members of society as consumers, rather than to individual
enterprises or industries.
individual business enterprises, industries, and an economy as a whole, rather than to
members of society as consumers.
6.As used in the definition of accounting, an economic entity may be
(1 Point)
A division within a business enterprise
Any of these
An individual
A business enterprise
7.One objective of financial reporting is to provide
(1 Point)
information about the investors in the business entity.
information about the liquidation values of the resources held by the enterprise.
information that is useful in assessing cash flow prospects.
information that will attract new investors.
8.What is the branch of accounting that makes financial information about an
entity accessible to the creditors and investors?
(1 Point)
Government accounting
Management accounting
Financial accounting
Auditing
9.Financial Accounting can be broadly defined as the area of accounting that
prepares
(1 Point)
 Financial statements to be used primarily by management
General purpose financial statement to be used by parties internal to the entity
Financial statements to be used by investors
General purpose financial statements to be used by parties both internal and external to the
entity
10.Financial accounting is the branch of accounting that focuses on
(1 Point)
special purpose reports of financial position and results of operations
general purpose reports of financial position and results of operations
the various need of statement users
financial statements
11.General-purpose financial statements are the product of
(1 Point)
financial accounting.
managerial accounting.
neither financial nor managerial accounting.
both financial and managerial accounting
12.General-purpose information is
(1 Point)
not intended to satisfy the common needs of individual users.
intended to satisfy the specialized needs of individual users
not intended to satisfy the specialized needs of individual users.
Provided by managerial accounting.
13.Special-purpose financial statements are
(1 Point)
prepared in accordance with Philippine Financial Reporting Framework
prepared in accordance with special-purpose financial reporting framework
prepared for the annual stockholders’ meeting
useful to present and potential equity investors
14.Financial Accounting is concerned with
(1 Point)
Recording financial transactions
Summarizing and presenting financial information on financial reports
 Analyzing the financial reports
All of these
15.Financial accounting emphasizes reporting to
(1 Point)
Creditors and investors
Regulatory bodies
Internal auditors
Management
16.Which of the following is not true?
(1 Point)
Accounting is concerned primarily with quantitative information used by persons who must
make economic decisions among alternative actions.
The branch of accounting concerned with the presentation of financial information to assist
management in planning and controlling operations is called managerial accounting.
Financial accounting emphasizes special purpose information based on presumption that
significant numbers of users need similar information.
Governmental accounting is also known as municipal or fund accounting
17.What is the branch of accounting that serves the information needs of internal
users?
(1 Point)
Management accounting
Cost accounting
Government accounting
Financial accounting
18.The process of identifying, measuring, analyzing, and communicating financial
information needed by management to plan, evaluate, and control an
organization’s operations is called
(1 Point)
managerial accounting.
auditing.
financial accounting.
tax accounting.
19.Managerial Accounting emphasizes
(1 Point)
 Reporting to the Securities and Exchange Commission
Reporting financial information to external users
Developing accounting information for use within an entity
Combining accounting with data processing
20.Which statement is true regarding managerial accounting and financial
accounting?
(1 Point)
Managerial accounting has a future focus
Managerial accounting is generally more precise
The emphasis on managerial accounting is relevance and the emphasis on financial
accounting is timeliness
Managerial accounting need not follow generally accepted accounting principles while
financial accounting must follow GAAP
21.This branch of accounting deals with collection, allocation and control of the
cost of producing specific goods and services.
(1 Point)
Accounting Education
Tax Accounting
Government Accounting
Cost Accounting
22.When Polytechnic University of the Philippines records its transaction and
prepares financial reports, such recording and preparation of reports fall under
what branch of accounting?
(1 Point)
Cost accounting
Management accounting
Accounting education
Government accounting
23.In 2020, Alfonso established his online Face2Face business selling facemasks
and face shield. When he hears that even an online seller needs to register, he
heeds the call of the BIR. When he is about to file his Q1 Income Tax Return, his
friend, Di Carpio, advises him that he could opt to use 8% optional gross income
tax if his gross sales during the year do not exceed P3 million pesos. In order to
manage properly his income tax payments and to determine whether Alfonso is
qualified to use the 8% tax rate, which branch of accounting will help him make
an informed decision,
(1 Point)
Tax Accounting
Financial Accounting
Management Accounting
Government Accounting
24.This branch of accounting deals with the examination of whether the financial
statements are prepared in accordance with the Philippine Financial Reporting
Standards.
(1 Point)
Cost Accounting
Auditing
Accounting Education
Financial Accounting
25.Which among the following is an indirect user of accounting information?
(1 Point)
Lenders of the enterprise
Management of the enterprise
Taxing Authority
Regulatory agency
26.Which of the following is an internal user of a company’s financial
information?
(1 Point)
Long-term creditors of an enterprise
Regulatory agencies
Shareholders of the company
Board of directors
27.Which of the is considered a direct user of accounting information?
(1 Point)
Labor unions
Trade association
Taxing authority
 A regulatory agency
28.Which of the following users of accounting information are both an external
user and a direct user?
(1 Point)
Regulatory bodies
Labor unions
Management
Creditors
29.The objectives of financial reporting for business enterprises are based on
(1 Point)
Reporting on management’s stewardship
Generally accepted accounting principles
The need for profit maximization
The needs of the users of the information
30.What would be the advantage of having all countries adopt and follow the
same accounting standards?
(1 Point)
Comparability.
Lower preparation costs.
Comparability and lower preparation costs
Consistency.
31.Which of the following would not be considered an internal user of accounting
data for the XYZ Company?
(1 Point)
President of the employees' labor union
Merchandise inventory clerk
President of the company
Production manager
32.Which of the following would not be considered an external user of
accounting data for the XYZ Company?
(1 Point)
Customers
Internal Revenue Service Agent
 Creditors
Management
33.Which of the following would not be considered internal users of accounting
data for a company?
(1 Point)
The controller of a company
Salesmen of the company
The president of a company
Creditors of a company
34.Which of the following is an external user of accounting information?
(1 Point)
Finance directors
Managers
Labor unions
Company officers
35.Which one of the following is not an external user of accounting information?
(1 Point)
Regulatory agencies
Investors
All of these are external users
Customers
36.Financial accounting provides economic and financial information for all of the
following except
(1 Point)
creditors.
other external users.
investors.
managers.
37.Which combination of user and type of decision that user will make with the
information is correct?
(1 Point)
Regulatory Agency; Is the company able to pay its debts?
Creditor; Is the company a good investment?
 Investor; Is the company operating within prescribed guidelines?
Bureau of Internal Revenue; Is the company complying with tax laws?
38.What is the information that lenders need from financial statements of
borrowers?
(1 Point)
information on the borrowers’ ability to pay the loan and interest
information on the borrowers’ willingness to pay the loan and interest
information that will enable them to regulate the activities of borrowers
information on the borrowers’ stability and profitability
39.An independent, not-for-profit private sector organization that governs the
activities of the International Accounting Standards Board is the
(1 Point)
International Accounting Standard Committee
Standards Advisory Council
IFRS Foundation
International Financial Reporting Interpretations Committee
40.The body that authors the International Financial Reporting Standards is the
(1 Point)
Financial Reporting Standards Council
International Accounting Standards Board
Accounting Standards Council
International Accounting Standards Committee
41.The International Accounting Standards Board was formed
(1 Point)
To develop a single set of high quality IFRS
To develop accounting standards for countries that do not have their own standard-setting
bodies
To establish accounting standards for multinational entities
To enforce IFRS in foreign countries
42.The IASB declared that the merits of proposed standards are assessed
(1 Point)
From a position of materiality
Based on possible impact on behavior
 Based on arguments of lobbyist
From a position of neutrality
43.The IASB publishes standards called
(1 Point)
International Accounting Standards
International Financial Reporting Standards
Financial Reporting Standards
Statement of Financial Accounting Standards
44.What is the chronological order in the evaluation of a typical standard?
(1 Point)
Exposure draft, Discussion paper, and Standard
Exposure draft, Standard, and Discussion paper
Standard, Discussion paper, and Exposure draft
Discussion paper, Exposure draft, and Standard
45.The IASB employs due process system which
(1 Point)
Identifies the most important issues
Is an efficient system for collecting dues from members
Enables interested parties to express their views on issues under consideration
Requires that all CPAs must receive a copy of IFRS
46.What is due process in the standard-setting by IASB?
(1 Point)
All of these are part of due process in standard-setting
Interested parties can make their views known
Public hearings are held on proposed standards
IASB operates in full view of the public
47.The Financial Accounting Standards Board employs a "due process" system
which
(1 Point)
is an efficient system for collecting dues from members.
identifies the accounting issues that are the most important.
requires that all accountants must receive a copy of financial standards
enables interested parties to express their views on issues under consideration.
48.What is a possible danger if politics plays too big a role in developing IFRS?
(1 Point)
User groups become active
The IASB delegates its authority to elected officials
Individuals may influence the standards
Accounting standards are not truly generally accepted
49.Financial accounting standard-setting
(1 Point)
Can be described as a social process which reflects political actions of various interested
user group as well as a product of research and logic
Is based solely on research and empirical findings
Is democratic in the sense that a majority of accountants must agree with a standard
Is a legalistic process
50.IFRIC Interpretations issued by IASB
(1 Point)
All of these are true about IFRIC Interpretations.
Cover newly identified financial reporting issues not specifically addressed
Cover issues with conflicting interpretations
Are considered authoritative and must be followed
51.Which is the accounting standard setting body in the Philippines at the
present time?
(1 Point)
Financial Reporting Standards Council
Auditing and Assurance Standards Council
International Accounting Standards Committee
Philippine Institute of Certified Public Accountants
52.Which statement is true regarding FRSC?
(1 Point)
The FRSC is created by Professional Regulation Commission upon recommendation of the
Board of Accountancy in carrying out its powers and functions under R.A. 9298.
All of the statements are true.
The Chairman and members of FRSC are appointed by Professional Regulation Commission
upon recommendation of the Board of Accountancy and shall have a term of three years
renewable for another term.
 The FRSC shall be composed of 15 with a Chairman and 14 representatives
53.Based on the Republic Act 9298, the Financial Reporting Standards Council is
composed of
(1 Point)
14 members
13 members
15 members
16 members
54.Which of the following are represented in the Financial Reporting Standards
Council? I Securities and Exchange Commission II Department of Trade and
Industry III Board of Accountancy IV Philippine Institute of Certified Public
Accountants V Bureau of Internal Revenue VI Social Security System
(1 Point)
I, III, IV, and V
I, II, III, V, and VI
I, II, III, IV, V and VI
II, IV, V, and VI
55.All of the following are represented in FRSC, except
(1 Point)
Department of Budget and Management
Commission on Audit
Board of Accountancy
Securities and Exchange Commission
56.The PFRS consist of I. Specific Philippine Financial Reporting Standards (PFRS),
which are adopted from the IFRSs II. Philippine Accounting Standards (PAS),
which are adopted from the IASs III. Philippine Interpretations, which are adopted
from the interpretations of the IFRIC and the SIC IV. Interpretations of the PIC
(1 Point)
I and II
I, II, III, and IV
I only
I, II, and III
57. Which of the following are parts of the due process applied by the Financial
Reporting Standards Council in developing the financial reporting standard? I
Formation of a task force to address the issue II. Publication of the exposure draft
in the official gazette or newspaper of general circulation III. Consideration of
comments on the exposure draft. IV. Approval vote by majority members of the
FRSC members
(1 Point)
I, II, III, and IV
II, III, and IV
I, II and IV
I, III, and IV
58.The process of establishing financial reporting standards is
(1 Point)
A legislative process based on set of laws promulgated by the House of Representatives
A social process, which incorporates political actions of various interest user groups as well
as professional research and logic
A democratic process in that a majority of practicing certified public accountants mut vote of
a proposed standard
Based solely on economic analysis of the effects each standard will have if it is implemented
59.As part of the due process of developing an accounting standard, the Financial
Reporting Standards Council issues exposures draft for comment within a period
of 60 days, unless a shorter period is considered appropriate. How long is this
shorter period?
(1 Point)
Not less than 45 days
Not less than 50 days
It depends on the issue being resolved
Not less than 30 days
60.Once an accounting standard has been established
(1 Point)
The task of reviewing the standard is giving to a national organization of CPAs
The standard is not reviewed
The standard is continually reviewed to see if modification is necessary
No revisions should be made to the standard
61.Generally accepted accounting principles
(1 Point)
 Are accounting principles based on law
Derive their credibility and authority from recognition and acceptance by the accountancy
profession
Derive their authority from regulatory authority
Derive their credibility and authority from law
Submit
This content is created by the owner of the form. The data you submit will be sent to the form owner. Never give out
your password.

Powered by Microsoft Forms

 | 
Privacy and cookies
 | Terms of use