Accounting quiz (Introduction to accounting) PDF

Preview

Summary

Activity 1 True or False. Read the following items below and analyzes whether the statement is correct or incorrect. Write the word TRUE if the statement is correct and write FALSE if the statement is incorrect. (1 point each) 1. All events and transactions of an entity are recognized the books of a...

Description

Activity 1 True or False. Read the following items below and analyzes whether the statement is correct or incorrect. Write the word TRUE if the statement is correct and write FALSE if the statement is incorrect. (1 point each) 1. All events and transactions of an entity are recognized the books of accounts. 2. The accounting process of assigning numbers, commonly in monetary term, to the economic transactions and events is referred to as classifying. 3. The basic purpose of accounting is to provide information about economic activities intended to be useful in making economic decision. 4. Financial accounting is the branch of accounting that focuses on general purpose reports of financial position and operating results known as the financial statements. 5. General purpose financial statements are those statements that cater to the common and specific needs of a wide range of external users. 6. The financial statements are the only source of information when making economic decisions. 7. All information presented in the financial statements are sourced from the accounting records of the entity. 8. Entity A’s accounting period starts on July 1 and ends on June 30 of the following year. Entity A uses a fiscal year period. 9. Once promulgated, accounting standards are never changed. 10. The entity’s management is responsible for the selection of appropriate accounting policies, not the accountant. Answers 1. FALSE 2. FALSE 3. TRUE 4. TRUE 5. FALSE 6. TRUE 7. TRUE 8. TRUE 9. TRUE 10. TRUE 11. TRUE QUIZ 1 MULTIPLE CHOICE: Read carefully the items below and choose the letter of the correct answer. (1piont each) 1. It refers to the process of incorporating the effects of an accountable event in the statement of financial position or the statement of profit or loss and other comprehensive income through a journal entry. a. Realization c. Recognition b. Derecognition d. Posting 2. All a. b. c. d. e.

of the following are events considered as exchange or reciprocal transfer, except Purchase of investment in equity securities Sale of equipment for non-interest bearing note Subscription of the entity’s own equity instrument (i.e., contributions by owners) Exchange of a note payable for an account payable Borrowing of money from a bank

3. All a. b. c.

of the following are events considered nonreciprocal transfers, except Declaration of cash dividends d. Imposition of fines Declaration of stock dividends e. Theft Payment of accounts payable

4. These are events involving an entity and another external party. c. Transactions a. External events b. Internal events d. Life events 5. It is the accounting process of assigning numbers, commonly in monetary terms, to the economic transactions and events.

a. Analyzing

c. Classifying

b. Measuring

d. Interpreting

6. What is the basic purpose of accounting? a. To provide quantitative financial information about economic activities. b. To provide all information that users need in making economic decisions. c. To provide qualitative financial information about economic activities intended to be useful in making economic decisions. d. To provide quantitative financial information about economic activities intended to be useful in making economic decisions. 7. Accounting provides which type of information? a. Quantitative c. Qualitative d. All of these b. Financial information 8. General purpose financial statements are a. Those statements that cater to the common and specific needs of a wide range of external users. b. Those statements that cater to the common needs of a wide range of external users and internal users. c. Those statements that cater to the common needs of a limited range of external users. d. Those statements that cater to the common needs of a wide range of external users. 9. External users are those a. Who do have the authority to demand financial reports tailored to their specific needs. b. Who do not have the authority to demand financial reports tailored to their common needs. c. Who do not have the authority to demand financial reports tailored to their specific needs. d. Who belong to countries other than the domicile country of the reporting entity 10. The primary objective of financial reporting is to provide a. Information about economic resources, claims to these resources, and changes in them. b. Information useful for investment and credit decisions. c. Information useful in predicting future cash flows. d. All of these 11. Which of the following statements is false? a. Accountable events are those that have an effect in an entity's assets, liabilities, equity, income or expenses. b. The term “recognition” as used in accounting refers to the process of incorporating the effects of an accountable event in the statement of financial position or the statement of profit or loss and other comprehensive income through a memo entry. c. External events are those that involve the reporting entity and an external party. d. The Board of Accountancy consists of a chairperson and six members. 12. Which of the following statements is true? a. In current practice, accounting provides only quantitative information that is useful in making economic decisions. b. External users are those who do not have the authority to demand financial reports tailored to their specific needs. c. Under the stable monetary unit assumption, the owners of the business and the business are viewed as a single reporting entity. Therefore, the personal transactions of the owners are recorded in the books of accounts. d. The practice of accountancy in the Philippines is regulated under R.A. 9892. 13. Which of the following statements correctly refer to the accounting process? I. Measuring is the accounting process of analyzing business activities as to whether or not they will be recognized in the books. II. Recognition refers to the process of including the effects of an event in the totals of the statement of financial position or the statement of profit or loss and other comprehensive income through memo entries. III. Disclosure of events in the notes to financial statement without including their effect in the totals of the statement of financial position or statement of profit or loss and other comprehensive income is not an application of the recognition principle. IV. An accountable event is an event that has an effect on the assets, liabilities or equity of an entity and its effect can be measured reliably....