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ETEEAP > Accounting for Non-Accountants > Flashcards

Accounting for Non-Accountants Flashcards

1
Q

It is an information system that provides financial reports to users about economic activities of the business

A

Accounting

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2
Q

A way to record the events related to the business that affects its resources and obligations

A

Accounting

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3
Q

The language of business

A

Accounting

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4
Q

A process of identifying, recording and communicating economic information that is useful in making economic decisions.

A

Accounting

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5
Q

The accountant analyzes each business transaction and identifies whether the transaction is an “accountable event” or “non-accountable event.”

A

Identifying

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6
Q

The accountant recognizes (i.e., records) the “accountable events” he has identified. This process is called “journalizing.” After journalizing, the accountant then classifies the effects of the event on the “accounts.” This process is called “posting.”

A

Recording

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7
Q

At the end of each accounting period, the accountant summarizes the information processed in the accounting system in order to produce meaningful reports.

A

Communicating

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8
Q

Types of infoirmation provided by accounting

A
  1. Quantitative Information
  2. Qualitative Information
  3. Financial Information
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9
Q

To provide external users with information that is useful in making investment and credit decisions

A

Function of Accounting in Business

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10
Q

To provide internal users with information that is useful in managing the business.

A

Function of Accounting in Business

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11
Q

At the start of the period, a business has total assets of ₱500,000 and total
liabilities of ₱300,000. During the period, the business earned total income
of ₱1,000,000 and total expenses of ₱640,000. No additional investments or
withdrawals were made by the owner. Total assets at the end of the period
were ₱830,000. How much is the total liabilities at the end of the period?

A

270,000

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12
Q

The output of an accounting system is (are)

A

Accoutning reports

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13
Q

Entity A has an interest-bearing note payable. At the end of the period,
Entity A would most probably recognize which of the following?

A

Interest Expense

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14
Q

Which of the following is not considered a manufacturing business?
a. San Miguel Pure Foods
b. Apple
c. Banco de Oro
d. Toyota

A

Banco de Oro

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15
Q

Which of the following is most likely not considered a merchandising
business? Pharmacy, Department Store, Rice Wholesaler or Movie Theater?

A

Movie Theater

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16
Q

It is the left side of an account.

A

Debit

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17
Q

It is the right side of an account.

A

Credit

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18
Q

The accounting standards in the Philippines are called

A

Philippine Financial Reporting Standards (PFRSs)

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19
Q

Entity A’s equipment was lost due to theft. How will Entity A record this
event?

A

Charge the carrying amount of the lost equipment as loss.

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20
Q

The beginning equity is ₱5,000. If total income for the period is ₱8,000
while total expenses are ₱6,000, how much is the ending balance of
equity?

A

7,000

21
Q

Entity A purchased inventories for ₱100,000. Entity A expects to sell the
inventories for ₱120,000 and therefore records the inventories at ₱120,000
rather than at ₱100,000. Which of the following accounting principles is
violated?

A

historical cost

22
Q

This represents the value of inventories that have been sold during the
accounting period.

A

Cost of sales

23
Q

An event is considered an accountable event if

A

it has an effect on the assets, liabilities, equity, income or expenses
of the entity

24
Q

The start-up capital of a business consisted of ₱1,000,000 cash provided by
the business owner and an additional ₱250,000 from a bank loan. The total
start-up assets of the business therefore is

A

1,250,000

25
Q

Accounting is often called the “language of business” because

A

it is fundamental to the communication of financial information

26
Q

A term best describe the basic purpose of accounting?

A

To provide information about a reporting entity that is useful in
making economic decisions.

27
Q

Accounting is a body of knowledge which has been systematically
gathered, classified and organized.

A

Accounting as a social science

28
Q

Mang Kulas Company sells “balut,” “penoy,” “taho,” and barbeque. At the
same time, Mang Kulas Company also offers spa, manicure, pedicure, and
armpit hair removal to its customers. Mang Kulas Company is referred to
as a

A

Hybrid business

29
Q

Recording is the accounting process in which financial statements
are prepared. True or False

A

False

30
Q

At the start of the period, a business has total assets of ₱500,000 and total
liabilities of ₱300,000. During the period, the business earned total income
of ₱1,000,000 and incurred total expenses of ₱640,000. No additional
investments or withdrawals were made by the owner. How much is the
total equity at the end of the period?

A

560,000

31
Q

The branch of accounting that deals with providing financial information
to external decision-makers is

A

Financial accounting

32
Q

How much is the income if the total expense is P360,00 and loss is P40,000

A

320,000

33
Q

A business exported goods and collected the sale price in U.S. dollars.
When financial statements are prepared, the business translates the
dollars into pesos. The business is applying which of the following
accounting principles?

A

Stable monetary unit

34
Q

income is recorded in the period it is earned and expense is
recorded in the period it is incurred, irrespective of when cash is
received or paid.

A

Accrual basis

35
Q

Not a characteristic of an asset

A

b. It causes an outflow of economic benefits when it is settled.

36
Q

A business has total assets, total liabilities, and total equity of ₱100,000,
₱70,000 and ₱30,000, respectively, at the beginning of the period. During
the period, total liabilities decreased to ₱40,000. The business reported
profit of ₱50,000 for the period. How much is the ending total assets?

A

120,000

37
Q

Which of the following is not a service business? Hospital, Accounting Firm, Bakery, bank

A

Bakery

38
Q

Which of the following is not a balance sheet account? Owner’s drawing, Accounts Payable, Cash or Salaries Expense

A

Salaries Expense

39
Q

Which of the following is one of the fundamental qualitative
characteristics? Relevance, Comparability, Understandability, Timeliness

A

Relevance

40
Q

Mr. Van owns a butcher shop, a restaurant, and a catering business.
Separate financial statements are prepared for each business independent
of the other businesses. What accounting principle or assumption is being
applied in this situation?

A

Separate entity assumption

41
Q

Revenues earned from rendering services are recorded in this account.

A

Service Fees

42
Q

This branch of accounting focuses on catering to the information needs of
internal users.

A

Management accounting

43
Q

External users of general-purpose financial statements include all of the
following except

A

Owners who are directly involved in managing the business

44
Q

This account is used to record the investments of the business owner to
the business.

A

Owners Capital

45
Q

This account is used to record payments received from customers prior to
the delivery of goods or rendering of services.

A

Unearned Income

46
Q

The business acquires equipment. The business allocates the equipment’s
cost over the equipment’s useful life, instead of expensing it right away.
The portion of the equipment’s cost that is expensed during the period is
recorded as

A

Depreciation Expense

47
Q

A listing of all account titles

A

Chart of Accounts

48
Q

The ending equity is ₱9,000. If total income for the period is ₱5,000 while
total expenses are ₱8,000, how much is the beginning balance of equity?

A

12,000

49
Q

Under this concept, the life of the business is divided into series of
reporting periods. Thus, businesses normally prepare financial statements
at least annually.

A

Time Period

ETEEAP (4 decks)

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