FAR CHAPTER 1

Question 1

what is acccounting

Answer 1

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

Question 2

the accountant classifies the effects of the events on the “accounts”. This process is called

Answer 2

posting

Question 3

refers to the process of recording the accounts or
transactions of the entity, normally ends with the preparation of
the trial balance. It does not require the interpretation of the significance of
the information processed.

Answer 3

bookkeeping

Question 4

covers the whole processes of identifying,
recording and communicating information to the interested users.

Answer 4

accounting

Question 5

those who are directly involved in managing the entity.

Answer 5

internal users

Question 6

those who are not directly involved in managing the entity.

Answer 6

external users

Question 7

the information designed to meet the common needs of most statement users. It is provided by financial
accounting and is prepared primarily for external users.

Answer 7

general purpose accounting information

Question 8

is information designed to meet the specific needs of a particular statement users. It is provided by management accounting or other branches of accounting and is primarily prepared of the internal users.

Answer 8

special purpose accounting information

Question 9

when was the first systematic record keeping dealing with the “Double Entry Recording System” was formulated by Fra Luca Pacioli,

Answer 9

1494

Question 10

double entry recording system was formulated by

Answer 10

fra luca pacioli

Question 11

pacioli’s book

Answer 11

summa di arithmetica geometria proportioni and proportionista on nov 10,1494

Question 12

father of modern day accounting

Answer 12

fra luca pacioli

Question 13

– is the branch of accounting that focuses on general purpose financial statements

Answer 13

financial accounting, is governed by the PFRS philippine financial reporting standards

Question 14

are the structured representation of an entity’s financial position and results of its
operations. They are the end products of the Accounting process and by the means it arrived to the
information gathered and being communicated to the intended users.

Answer 14

financial statements

Question 15

– includes the financial statements plus other information provided outside the financial
statements that assists in the interpretation of a complete set of financial statements or improves users’
ability to make efficient economic decisions.

Answer 15

financial reports

Question 16

– involves the accumulation and communication of information for use
by internal users. An offshoot of management accounting is management advisory services which
includes services to clients on matters of accounting, finance, business policies and organizational
procedures, production costs, distribution and many other forms of management activities.

Answer 16

management accounting

Question 17

refers accounting for the government and its instrumentalities,
focusing attention on the custody of the public funds, the purpose or purposes of which those funds are
committed, and the responsibility and accountability of the individuals entrusted with these funds.

Answer 17

government accounting

Question 18

involves the inspection of an entity’s financial statements or business processes to
ascertain their correspondence with an established criteria.

Answer 18

auditing

Question 19

is the preparation of tax returns and rendering of tax advice, such as the
determination of tax consequences of certain proposed business endeavors.

Answer 19

tax accounting

Question 20

is the systematic recording and analysis of costs of materials, labor and
overhead incidental to the production of goods or of rending of service.

Answer 20

cost accounting

Question 21

– refers to the teaching accounting and accounting-related subjects in an
organized learning environment. It is a process of facilitating the acquisition of knowledge and skills
regarding one or more of the other branches of accounting.

Answer 21

accounting education

Question 22

– pertains to the careful analysis of economic events and other variables to understand their impact on decisions. It involves a wide range of topics.

Answer 22

accounting research

Question 23

is an activity where goods and services are exchanged for a monetary exchange. A
person engaged in business is called an entrepreneur or businessman.

Answer 23

business

Question 24

– it is a business in which it is owned by only one individual. It is the most
common form and simplest form of a business organization.

Answer 24

sole proprietorship

Question 25

a business that is created and owned by two or more individuals who
entered into a contract to carry on the business and divide among the profit and loss among
themselves.

Answer 25

partnership

Question 26

sole proprietorship is registered with the

Answer 26

DTI department of trade and industry

Question 27

A partnership is registered with the

Answer 27

Securities and Exchange Commissions (SEC)

Question 28

owned by more that one individual.

created by operation of law rather than a contract.

represented by shares of stock.

an artificial being or juridical person, acknowledged as a entity separated from its owners.
Therefore, can transact, have its own properties, incur its own obligations, and as well as be sued or it can sue also.

Answer 28

corporation

Question 29

A corporation is registered with the

Answer 29

Securities and Exchange Commissions (SEC)

Question 30

also owned by more than one individual. However, a cooperative is formed in
accordance with the provisions _____

Answer 30

cooperative, philippine cooperative code of 2008

Question 31

cooperative is registered with the

Answer 31

Cooperative Development Authority (CDA).