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Scaly's Study > FABM Chapter 1 Reviewer > Flashcards

FABM Chapter 1 Reviewer Flashcards

1
Q

The one that defined “Accounting” as a service activity.

A

The Accounting Standards Council (ASC)

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2
Q

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

A

Accounting

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3
Q

The one that defined “Accounting” as 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.

A

The Committee on Accounting Terminology of the American Institute of Certified Public Accountants (AICPA)

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4
Q

______________ in its Statement of Basic Accounting Theory defined “Accounting” as the process of identifying, measuring, and communicating economic information to permit informed judgment and decision by users of the information.

A

The American Accounting Association (AAA)

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5
Q

As the process of identifying, measuring, and communicating economic information to permit informed judgment and decision by users of the information.

A

Accounting

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6
Q

Shows a list of the resources, debts and capital of the enterprise as of the date of reporting

A

Balance sheet/Statement of Financial Position

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7
Q

Shows the income, expense and
the net result of operations over a period of time up to the date of reporting cash inflows and
cash outflows

A

Income Statement/Statement of Comprehensive Income

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8
Q

Shows the changes in the cash position: of the enterprise for the period

A

Statement of Cash Flows

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9
Q

Shows a summary of the changes in the capital of the enterprise during the period

A

Statement of Change in Equity

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10
Q

Shows additional disclosures of certain information
which are useful to users of financial statements in understanding the information in the
financial statements

A

Notes to the financial statements

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11
Q

Will record these transactions in the
accounting journal, classify them in the ledger,
and compile them into financial statements

A

Accounting

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12
Q

Shows the income earned, expenses incurred and
the net results of operations for the period.

A

The income statement

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13
Q

Would be favorable because it will increase the capital or wealth of the business.

A

Net Income

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14
Q

Would be unfavorable because it will decrease the capital of the business.

A

Net loss

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15
Q

this pertains to inflows of wealth to the business from the selling of goods or services to customers or clients or other events.

A

Income

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16
Q

This pertains to outflows of resources, depletion of resources, or incurrences of obligations that will require future outflows of resources in the conduct of business. Expenses are costs making income.

A

Expense

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17
Q

Shows a summary of the changes in the capital of the
business.

A

The statement of change in equity

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18
Q

Is considered the lifeblood of business. Information on cash is very essential to users.

A

Cash

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19
Q

Shows the changes in
the cash position of the business.

A

Cash Flow Statement

20
Q

Pertains to properties or resources of the business

A

Assets

21
Q

Pertains to debts or obligations of the business

A

Liability

22
Q

Pertains to the capital or residual interest of the owner/s of the business; Equity is total assets less total liabilities.

A

Equity

23
Q

Pertains to the ability of the enterprise to raise cash and hence pay off the debt in the short term while.

A

Liquidity

24
Q

Pertains to the ability to pay off the debt in the long term.

A

Solvency

25
Q

discuss the accounting policies (i.e. accounting methods or principles) adopted as the
basis of preparation of the financial statements including
informative disclosures on the break-downs of items in the
various statements.

A

Notes to the financial statements

26
Q

The need for accounting started because people needed to:

A

Record business transactions because people have the
normal tendency to forget things.

Know if they were successful financially.

Know how many assets they owned and how much liability
they owed.

27
Q

They made clay tokens in various shapes and with various markings to indicate different products. Before shipping their goods, a trader would take one token for each item in the shipment and encase the tokens in a ball of clay called a “bollae” (pronounced “bowl-eye”) meaning bowl. The buyer would match the
tokens with the items in the shipment to verify that everything was accounted for

A

Middle East (ancient Mesopotamia, Egypt, and Babylon)

28
Q

They made clay tokens in various shapes and with various markings to indicate different products. Before shipping their goods, a trader would take one token for each item in the shipment and encase the tokens in a ball of clay called a “______________” (pronounced “bowl-eye”) meaning bowl. The buyer would match the
tokens with the items in the shipment to verify that everything was accounted for

A

Bollae

29
Q

advanced tablets, whose markings and signs provided tallies,
recorded inventory, counts and transactions, and distinguished
inventory items.

A

The Bronze Age and Iron Age and the Far East

30
Q

Was created around 1760 B.C. in Babylon. Among its purposes, it standardized weights and measures and provided guidance on commercial transactions
and payments.

A

The Code of Hammurabi

31
Q

The introduction of double-entry bookkeeping which is defined as any bookkeeping system in which there was a “debit” and “credit” entry for each transaction.

A

13th century

32
Q

Latin word for debits is ______ (meaning to owe) or _____ (what is due or something owed)

A

Debere or Debitum

33
Q

While, credit is _________ (to entrust) or __________ (something entrusted to another or la loan)

A

Credere or Creditum

34
Q

The oldest surviving record in the
English language contains an annual
description of rents, fines, and taxes due to the
King of England, beginning 1130 to 1830.

A

Pipe Roll

35
Q

He is called the father of accounting and bookkeeping;

A

Luca Pacioli

36
Q

He was the first to describe the system of debits and credits in journals and
ledgers;

A

Luca Pacioli

37
Q

Luca Pacioli wrote a book entitled Summa de arithmetica, geometria, proportioni et
proportionalita.

A

Luca Pacioli

38
Q

Suggested the seven (7) key ingredients before a formal accounting

A

Ananias Charles Littleton

39
Q

focuses on the recording of financial data relating to business
operations in a significant and orderly manner. It covers procedural

A

Bookkeeping

40
Q

is broader in scope. It calls for a greater understanding of
records obtained from bookkeeping and an ability to analyze and interpret
the information provided by bookkeeping records. Accounting is concerned
with the summarizing phase of accounting data.

A

Accounting

41
Q

provides necessary data for accounting and accounting starts
where bookkeeping ends.

A

Bookkeeping

42
Q

The power to change ownership exists and there is a need to record the transaction.

A

Private Property

43
Q

Wealth is productively employed so that transactions are important enough to make their recording worthwhile and cost effective.

A

Capital

44
Q

The exchange of goods on a high level to motivate someone to devise a
formally organized system that could be applied universally to record
transactions.

A

Commerce

45
Q

The use of future goods where money is exchanged for goods with no detail
of who the customer was, this existence of buying and selling that would
lead to the need of a formally organized system that could be applied
universally to record credit transactions.

A

Credit

46
Q

A mechanism for making a permanent record in a common language

A

Writing

47
Q

There needs to be a common denominator for exchange.

A

Money

Scaly's Study (43 decks)

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