Accounting 103

Question 1

Types of Business Organizations:

Answer 1

1.Sole/single Proprietorship
2.Partnership
3.Corporation
4.Cooperatives

Question 2

Is a form of business Organizations managed by an elected board of directors.

Answer 2

CORPORATION

Question 3

Is a business owned and managed by one person.

Answer 3

Sole/Single Proprietorship

Question 4

Is an association of small producers and consumers who come together voluntarily to form a business Wich they own, manage, and patronize.

Answer 4

COOPERATIVES

Question 5

A form of business owned and managed by two or more people

Answer 5

PARTNERSHIP

Question 6

Types of Business Activities:

Answer 6

Service
Trading/Merchandising
Manufacturing

Question 7

Is a type of business engaged in buying and selling of goods.

Answer 7

Trading/Merchandising

Question 8

Is engaged in the production of items to be sold. It involves the purchasing and converting of raw material to finished goods

Answer 8

MANUFACTURING

Question 9

These are rules and procedures that serve as guide in the practice of accounting

Answer 9

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(GAAP)

Question 10

Comprises the methods used by a business to keep records of it’s financial activities and to summarize these accounts in periodic according reports

Answer 10

ACCOUNTING SYSTEM

Question 11

Fundamental concepts:

Answer 11

1.Entity Concept
2.Periodicity
3.Going-concern

Question 12

Is the concept behind providing financial accounting information about the economic activities of an enterprise for a specified time periods.

Answer 12

PERIODICITY

Question 13

Is a concept assumes that the business enterprise will continue to operate indefinitely.

Answer 13

GOING CONCERN

Question 14

The business enterprise as separate and distinct from its owners and from other business enterprise.

Answer 14

ENTITY CONCEPT

Question 15

Classifications of accounting period:

Answer 15

A. Calendar year
B. Fiscal year

Question 16

A twelve month period that starts on any month of the year than January and ends twelve months after the starting period.

Answer 16

FISCAL YEAR

Question 17

States that all business transactions that will be entered in the accounting reports must be duly supported by verifiable evidence

Answer 17

OBJECTIVITY PRINCIPLE

Question 18

States that income should be recognized at the time it is earned such as when goods are delivered or when services have been rendered.

Answer 18

ACCRUAL PRINCIPLE

Question 19

Means that all properties and services acquired by the business must be recorded at their original acquisition cost

Answer 19

HISTORICAL COST

Question 20

This refers to the relative importance of an item or event

Answer 20

ADEQUATE DISCLOSURE

Question 21

To record returns of customers

Answer 21

SALES RETURNS

Question 22

Discounts given to customers who pay early

Answer 22

SALES DISCOUNT

Question 23

Amount of goods bought during the current accounting period

Answer 23

PURCHASES

Question 24

The actual cos of merchandise that the company was able to sell.

Answer 24

COST OF GOODS SOLD

Question 25

To record returns of customers

Answer 25

SALES RETURNS

Question 26

Total amount of revenue that the company was able to generate from selling products.

Answer 26

SALES

Question 27

To record early payments by the company to the suppliers.

Answer 27

PURCHASE DISCOUNT

Question 28

The amount of inventory at the beginning of the accounting period.

Answer 28

BEGGINING INVENTORY

Question 29

To record merchandise returned by the company to their supplier

Answer 29

PURCHASE RETURNS

Question 30

Used to record transportation costs of merchandise purchased by the company.

Answer 30

FREIGHT IN

Question 31

Total cost of inventory unsold at the end of the accounting cycle

Answer 31

ENDING INVENTORY