Chapter 1

Question 1

_________ is a service activity.

Answer 1

Accounting

Question 2

to provide quantitative information that is primarily financial in nature, about economic entities, intended to be useful in making
economic decisions

Answer 2

Function of Accounting

Question 3

An ___________ provides services and
furnishes quantitative information expressed in terms of money that is useful to the users of the
accounting information.

Answer 3

accountant

Question 4

The information is outlined into reports called ______________ and
served as a basis for making important economic decisions.

Answer 4

financial statements

Question 5

The users of the accounting information are categorized as either

Answer 5

internal or external

Question 6

Branches of Accounting

Answer 6

Management Accounting

Financial Accounting

Question 7

Areas of Accounting

Answer 7

Public, Private, Government, Accounting In Education

Question 8

_________________ are decision makers who have no direct access to the information provided
by the operations of the company.

Answer 8

External users

Question 9

____________________ represent the managers or the decision makers
of an entity and they need the accounting information for the continued operation of their
business.

Answer 9

Internal users

Question 10

________ are influenced with the returns from their investments and to decide whether
to make additional investments, hold or sell their shares of stocks.

Answer 10

Investors

Question 11

______,______,________ need accounting information to help in their decision
whether to extend credit or loans being applied by businesses.

Answer 11

Suppliers, Lenders, Creditors

Question 12

Accounting is based on a double entry system which means that a business transaction
has a dual effect when recorded.

Answer 12

True

Question 13

Business transactions are recorded in at least ____ accounts.

Answer 13

two

Question 14

are needed to serve as a basis for recording the transactions.

Answer 14

Documents

Question 15

The two books of

accounts, where transactions are recorded, are

Answer 15

the journal and ledger

Question 16

The double-entry
accounting system has specific rules of debit and credit for recording the transactions in the
accounts. _______ is the left side of an account while ________is the right side.

Answer 16

debit, credit

Question 17

transactions are first recorded in the book of

original entry called the general journal and the process is known as

Answer 17

journalizing

Question 18

The ___________ should show the elements of the financial statements which shall be used in recording
the transactions.

Answer 18

chart of

accounts

Question 19

_____________ are sometimes used by businesses that are designed for
recording a single type of transaction that occurs frequently.

Answer 19

Special journals

Question 20

The format and the number of

special journals used will depend on the nature of the business.

Answer 20

True

Question 21

The most common special

journals include the

Answer 21

cash payment, cash receipt, purchase and sales journal

Question 22

The __________________ will be used for entries that cannot be recorded in the
special journals such as adjusting and closing entries.

Answer 22

general journal