Introduction

Question 1

Give the definition of Accounting according to the Accounting Standards Council.

Answer 1

Accounting 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.

Question 2

What is the basic accounting equation?

Answer 2

Revenue - Expenses = Net Income

Question 3

Four natures of Accounting and why it is said as so.

Answer 3

Art - because it is a designed process with an output
Financial - because we are always talking about how much
Process - step-by-step procedures to write financial reports
Information system - record-keeping methodologies

Question 4

What are the five functions of Accounting?

Answer 4

1. Maintenance of systematic records
2. Financial results of entity communicated
3. Meeting legal requirements
4. Protect assets of business
5. Assistance to management

Question 5

Who is the Father of Accounting?

Answer 5

Luca Bartolomeo de Pacioli

Question 6

The branch of accounting that records business transactions and report the operations of the company in totality.

Answer 6

Financial Accounting

Question 7

Which branch of accounting is concerned with collecting financial information to be used by the management for decision-making?

Answer 7

Management Accounting

Question 8

This branch of accounting talks about the sacrifices, costs, and/or expenses of the company.

Answer 8

Cost Accounting

Question 9

This branch of accounting is concerned with the disposition and receipt of public funds or funds of the government which can be used to generate public infrastructures.

Answer 9

Government Accounting

Question 10

This branch of accounting is concerned with the verification, checking, and correction of financial statements.

Answer 10

Auditing

Question 11

A subdivision of Auditing that is concerned with checking the operations of the company if it is in line with the management policies of the company.

Answer 11

Internal Auditing

Question 12

A subdivision of auditing wherein a third party auditor verifies the financial statements of a company for accuracy and to determine whether it is correct or not.

Answer 12

External Auditing

Question 13

This branch of accounting deals with computation of taxes, filing of taxes, and how to properly report tax information. It reports the totality of the process of taxation.

Answer 13

Tax Accounting

Question 14

This branch of accounting teaches accounting, finance, and other technical and related subjects to students.

Answer 14

Accounting Education

Question 15

This branch of accounting is concerned in the application of research information to accounting subdivisions.

Answer 15

Accounting Research

Question 16

What are the two subcategories of Accounting Research?

Answer 16

Academic Accounting Research and Economic/Industrial Accounting Research

Question 17

What are the two subcategories of Auditing?

Answer 17

Internal and External Auditing

Question 18

This subcategory of accounting research applies accounting research findings in the academe.

Answer 18

Academic Accounting Research

Question 19

This subcategory of accounting research applies accounting research results in the industry.

Answer 19

Economic/Industrial Accounting Research

Question 20

Two major types of users of accounting information:

Answer 20

Internal and External Users

Question 21

Users that provide capital to the business and assesses if the company needs additional funding.

Answer 21

Owners

Question 22

These users need financial information because they plan and organize the firm, and use these information for decision-making.

Answer 22

Managers

Question 23

These accounting information users looks at the financial information to keep track of investments.

Answer 23

Investors

Question 24

These users are people that the company will borrow money from if they lack funds. They also assess the company’s financial situation with regards to financial obligations.

Answer 24

Creditors

Question 25

Users that are curios about the business continuity.

Answer 25

Customers

Question 26

Users that assess the company’s stability and ability to sustain employment.

Answer 26

Employees

Question 27

Users curious about the company’s ability to purchase supplies.

Answer 27

Suppliers

Question 28

These users look at financial information to assess company’s ability to pay tax due, and compliance to laws on tax and obligations.

Answer 28

Tax authorities

Question 29

Users that assess financial rules and regulations, as well as the company’s compliance to public accountability.

Answer 29

Government

Question 30

Users that are curious about the new, current, and rising business trends.

Answer 30

General Public

Question 31

It is an unincorporated business that just has only one owner.

Answer 31

Sole proprietorship

Question 32

Business organization with two or more persons that establish a contract to contribute money, property, or industry to a common fund, with the agreement to divide the profits among themselves.

Answer 32

Partnership

Question 33

An artificial being created by operation of law, have rights to succession, and the powers, attributes, and properties expressly authorized by law or incidental to its existence.

Answer 33

Corporation

Question 34

It is a people-centered enterprise owned, controlled, and run by and for their members to realize their common economic, social, and cultural needs and aspirations.

Answer 34

Cooperatives