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FUNAC Prelims > Chap 1 > Flashcards

Chap 1 Flashcards

1
Q

It is a service activity. The activity utilizes the complete process of identifying, measuring, and communicating financial information to formulate reports that will be used to provide relevant information to perform decision-making.

A

Accounting

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2
Q

It represents the wealth or finance of the business which is composed of its properties or assets.

A

Net Worth

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3
Q

First three parts of the Accounting Cycle found in the bookkeeping:

A

Track down business activities from the time cash is used to transact,

Analyze, calculate, and record business activities (transactions), and

Prepare progress reports through making financial reports.

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4
Q

used for census or the registry of people living in a province to serve as a guide for collection of taxes.

A

Bookkeeping

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5
Q

He wrote the first mercantile book “Libro de Larte dela Mercatura” in 1458.

A

Benedetto Cotrugli

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6
Q

Father of Modern Accounting.

A

Luca Pacioli

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7
Q

He introduced the concept of double-entry bookkeeping through his first printed exposition titled “Summa de Arithmetica” in 1594.

A

Luca Pacioli

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8
Q

Primary users or parties inside the company. Those stakeholders that are directly involved in managing the business.

A

Internal Users

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9
Q

Secondary users or parties outside the company. Those individuals that are indirectly involved in managing the business.

A

External Users

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10
Q

Writing down financial activities
chronologically
transaction.

A

Recording

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11
Q

Recording is writing down financial activities ________ after analyzing each transaction.

A

chronologically

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12
Q

Grouping recorded transactions or financial activities into specific account classifications.

A

classifying

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13
Q

Process of preparing financial reports that is used for decision-making by the users of accounting information.

A

Summarizing

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14
Q

Interpretation of reports based on the provided Financial Statements and presentation of this information in a qualitative and quantitative form.

A

Interpreting

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15
Q

An economic unit that engages in buying and selling of goods or rendering services to other people.

A

Business

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16
Q

The business is owned and operated by one person only.

A

Sole Proprietorship

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17
Q

Most small businesses in different industries are _____-owned businesses.

A

sole proprietorship

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18
Q

A business is owned by two or more individuals that are called partners. Each partners decided to contribute knowledge and cash and non-cash assets to start up a business with the intent of dividing the profit eventually

A

Partnership

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19
Q

This is a type of business which is created through a separate legal entity that is owned by more than one individual called shareholders/stockholders.

A

Corporation

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20
Q

This type of business organization is not managed by the owner, but by the Elected Board of Directors (BOD) that are sometimes shareholders too.

A

Corporation

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21
Q

Operation involves rendering service for a fee to customers.

A

Service

22
Q

Engaged in the buying and selling of goods or merchandise to customers.
The products sold are already manufactured and ready to use.

A

Merchandising/Trading

23
Q

Take part in the production of items or the purchase of raw materials and processing them into finished products to be sold for cash.

A

Manufacturing

24
Q

Performs more than two of the abovementioned business operations.

A

Hybrid Business

25
Q

Aspects of Accounting

A

Recording, Classifying, Summarizing, Interpreting

26
Q

Types of Business Organization

A

Sole Proprietorship, Partnership, Corporation

27
Q

Types of Business Operations

A

Service, Manufacturing, Merchandising/Trading, Hybrid Business

28
Q

The set of rules to be followed by the business.

A system that an entity utilizes to collect, store,
and manage its financial data.

A

Accounting Information System

29
Q

It states that the advantages enjoyed must outweigh its cost.

A

Cost-Benefit

30
Q

It prescribes that information must be reported promptly and must be useful for the user to make a right decision and conclusion.

A

Relevance

31
Q

It advises that the AIS System to be used by the business must be designed to fit the unique characteristics of the overall company.

A

Compatibility Principle

32
Q

It suggests that the company system should
allow and adapt for changes when needed.

A

Flexibility Principle

33
Q

It prescribes that the business’ AIS must have good internal control.

A

Control Principle

34
Q

Enumerates the methods and procedures necessary to monitor the activities of the business to ensure efficient operation

A

Internal Control

35
Q

It refers to the device used to record the changes, either increase or decrease, in the accounting elements. Similar transactions are grouped together under one account.

A

Account

36
Q

Classified and presented according to liquidity with the most liquid by those with lesser liquidity.

A

Assets

37
Q

Realized in the normal operating cycle (1 Year) Held Primarily for trading purposes.

Cash, Cash Equivalents, Marketable Securities, Receivables, Accrued Income, and Prepaid Expenses

A

Current Assets

38
Q

Long-term assets with a full value that cannot be recognized until after one year.

Long term investments, Property, Plant, Equipment (P.P.E), and Intangible Assets

A

Non-Current Assets

39
Q

A present obligation arising from a past event and a settlement is expected.
Economic Obligations.

A

Liabilities

40
Q

Payables to be settled within one (1) normal operating year. It does not have
an unconditional
settlement.

A

Current Liabilities

41
Q

Obligations needed to be settled for more than one (1) accounting period.
Mortgage Payable, and Bonds Payable. Not expected to be paid immediately.

A

Non-current Liabilities

42
Q

Includes the interest of the owner in the business, claims of the owner on the assets of the business. Economic Residual

A

Owner’s Equity

43
Q

Represents the original and additional investment of the owner to business.

A

Capital

44
Q

Represents the withdrawals made by the owner of the business in cash or other assets.

A

Drawing

45
Q

or Temporary Account – containing the next income or loss – used at the end of the period to close nominal accounts.

A

Income Summary

46
Q

Refers to the cash earned or generated by the business in performing services or delivering goods.

A

Revenue

47
Q

Represents an inflow of cash or assets for service rendered or merchandise sold.

A

income

48
Q

Income that does not come from the normal course of business

A

Gain

49
Q

It refers to the cost or charges incurred in the process of generating or earning revenue. Reduction in the value of an asset as it is used.

A

Expenses

50
Q

Major Accounts

A

Assets, Liabilities, Owner’s Equity, Revenue, Expenses

FUNAC Prelims (3 decks)

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