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Basic Accounting > Basic Accounting - theories & meanings > Flashcards

Basic Accounting - theories & meanings Flashcards

1
Q

a legally-recognized organizational entity existing within an economically free country designed to sell goods and/or provide
services to consumers

A

Business

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2
Q

Aims to earn income or profit through the provision of goods

and/or services to consumers

A

Profit-oriented enterprise

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3
Q

Aims to achieve socio-civic or charitable aims

A

Non-profit-oriented enterprise

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4
Q

Forms of Business Enterprises (according to nature of operations)

A
  1. Service business or service concern-
  2. Merchandising business or trading concern
  3. Manufacturing business or manufacturing concern-
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5
Q

Simplest form of business and provides services to clients or customers in exchange for fees, rent, interest, or royalties

A

Service business or service concern-

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6
Q

Purchase goods from suppliers and, without altering the state of the goods bought, sell the same at a higher price than cost

A

Merchandising business or trading concern

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7
Q

Involves the most complex activities and actually

produces the goods that it sells to customers

A

Manufacturing business or manufacturing concern

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8
Q

LEGAL FORMS of Business/ Business Ownership

A

Sole Proprietorship
Partnership
Corporation
Cooperatives

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9
Q

Defined by International Cooperative Alliance’s Statement on
Cooperative Identity as “autonomous associations of persons united voluntarily to meet their common economic, social,
and cultural needs and aspirations through jointly owned and democratically controlled enterprises”

A

Cooperatives

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10
Q

Most complex form of Business Organizations

A

Corporation

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11
Q

Person who invests in a corporation

A

Shareholder

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12
Q

Evidence of the number of shares purchased Governed by the Corporation Code of the Philippines Management of operations of the corporation is centralized in the corporation’s board of directors

A

Certificate of stock

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13
Q

An association of two or more persons who bind themselves to
contribute money, property, or industry to a common fund with the intention of dividing the profits among themselves.
- Partnerships are governed by the Civil Code of the Philippines

A

Partnership

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14
Q

Most basic legal form of business and has only one owner

A

Sole Proprietorship

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15
Q

Decisions which affect the resources it controls and the obligations of the business to other enterprises

A

Economic decisions

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16
Q

A summary of all the transactions of the business over a period of time. Most important financial information comes from accounting

A

Financial information

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17
Q

the art of recording, classifying and
summarizing, in a significant manner, and in
terms of money, transactions and events which
are in part at least of a financial character, and
interpreting the results thereof (Institute of Certified Public Accountants)

A

accounting

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18
Q 
Is a service activity. Its function is to
provide quantitative information,
primarily financial in nature, about
economic entities, that is intended to
be useful in making economic
decisions (Accounting Standards Council)
A

accounting

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19
Q 
Service function to management. It
basically processes raw data and
converts them to meaningful
information that will be useful for
decision-making
A

accounting

20
Q 
Is the process of identifying, measuring
and communicating economic
information to permit informed
judgement and decision by users of
the information (American Accounting Association)
A

accounting

21
Q

to supply
financial information to users of the information
to help them make informed judgements and
better decisions

A

Basic purpose of Accounting

22
Q

procedural or mechanical aspect
of accounting and involves set-up, update and
maintenance of accounting records. It can be
done by properly trained non-accountants

A

bookkeeping

23
Q

interpretation of information
recorded under bookkeeping. Practice of
accountancy can be done only by certified public
accountants

A

accounting

24
Q

Republic Act of Accountancy

A

Republic Act No. 9298, the Philippine Accountancy Act of 2004

25
Q

creates Professional Regulatory
Board of Accountancy which enforces the
provisions of the Philippine Accountancy Act. It is
also granted the right to issue, suspend, revoke
or reinstate CPA certificates for the practice of the
profession

A

Article II

26
Q

Candidates who fail _________ examinations
shall be disqualified from taking another exam
unless they submit evidence to the satisfaction of
the Board that they enrolled an completed at
least 24 units of subject given in the licensure
examination

A

2 complete examinations

27
Q

Sectors of Accounting practice

A

Public Practice
Commerce or Industry
Education
Government

28
Q

This sector includes
individual practitioners, small accounting
firms, medium sized and multinational accounting firms that render independent professional accounting services to the
public. CPAs charge professional fees for
these services. Examples are the Auditing, Tax services and Management and consulting services

A

Public Practice

29
Q 
most common service
provided by CPAs and involves
independent examination of financial
statements for the purpose of
expressing an opinion on the fairness
of these statements
A

Auditing

30
Q

includes the preparation
of tax returns for various clients,
provision advice on tax matters and
representation of clients in tax cases

A

tax services

31
Q 
involves providing
advisory/consulting services on
matters of accounting, finance,
business policies, organization
procedures, budgeting, product costing
and the conduct of operations
A

management and consulting services

32
Q 
Accountants are employed in various
positions such as: vice-president for
finance, chief accountant, cost
accountant, internal auditor or budget
officer. The highest accounting officer of a
business organization is known as the
controller. Accountants in commerce and
industry assist management in planning
and controlling a company’s operations
A

Commerce and Industry

33
Q

This area employs accountants as
professors, reviewers or researchers. They
take steps to clarify and address emerging
accounting issues encountered by
accountants in other sectors. They share
results of discussion and research with
colleagues in other sectors. Educators also
prepare aspiring CPAs for the Licensure
Examinations

A

Education

34
Q 
Accountants may be hired as staff,
auditor, budget officer or consultant in
government units like the Commission on
Audit, Bureau of Internal Revenue,
Department of Finance, Department of
Budget and Management, and the
Securities and Exchange Commission
A

Government

35
Q

he wrote a book containing discussions on the double-
entry bookkeeping system entitled Summa de Arithmetica, Geometria, Proportioni et
Proportionalita (Everything about
Arithmetic, Geometry, Proportions and
Proportionality), summary of the existing
mathematical knowledge at the time. Considered as Father of Double-Entry
Bookkeeping

A

1494, Friar Luca Pacioli

36
Q

Fields of Accounting

A 
Financial Accounting 
Management Accounting
Cost Accounting 
Tax Accounting 
Government Accounting
37
Q 
encompasses
the process of analyzing, classifying,
summarizing and communicating all
transactions involving receipt and
disposition of government funds and
property and interpreting the results
thereof. Focus is the proper custody,
disposition and accounting for public funds
A

Government accounting

38
Q

has two aims:
compliance with tax laws and minimizing
the company’s tax bill through legal
means

A

tax accounting

39
Q

measures a business’
costs to help management in controlling
expenses

A

cost accounting

40
Q 
concerned
with financial reporting for internal users
(management) and users have control
over the accounting system and can
specify precisely the type of reports
needed for use in decision-making
A

management accounting

41
Q

focuses on
preparation of general-purpose financial
statements with the aim of meeting most
of the needs of the external users

A

financial accounting

42
Q

comprises the accounting principles and
processes, standards and underlying assumptions
that are used in preparing financial statements

A

Generally Accepted Accounting Principles (GAAP)

43
Q

official accounting standard setting body
in the Philippines. The primary task of FRSC is to
improve and establish accounting standards that
will be generally accepted in the Philippines

A

Financial Reporting Standards Council (FRSC)

44
Q

The FRSC issued this and this
constitutes the generally accepted accounting
standards observed in the Philippines

A

Philippine Financial Reporting Standards

PFRS

45
Q

PFRS includes

A

Philippine Accounting Standards
PFRS
Philippine Interpretations developed by
Philippine Interpretations Committee

Basic Accounting (3 decks)

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