Lahat na

Question 1

An entitiy formed for the purposes of carrying on commercial enterprises

Answer 1

Organization

Question 2

Interested in information about the stability and profitability of employers
and information which enables them to assess the ability of the enterprise to provide
remuneration, retirement benefits and employment opportunities.

Answer 2

Employees

Question 3

Interested in information about the continuance of an enterprise especially
when they have a long-term involvement with, or are dependent on, the enterprise.

Answer 3

Managers

Question 4

Need information to help them determine whether they should buy, hold or
sell their investments.

Answer 4

Investors

Question 5

Interested in the allocation of resources and,
therefore, the activities of the enterprise. Require information in order to regulate the
activities of the enterprise, determine taxation policies, and as the basis for national
income and similar statistics.

Answer 5

Government and Regulatory Agencies

Question 6

Interested in information that enables them to determine whether their loans
and related interest will be paid when due.

Answer 6

Lenders

Question 7

refer to a common set of accounting principles,
standards, and procedures issued by the Financial
Accounting Standards Board (FASB).

Answer 7

Generally accepted accounting principles (GAAP)

Question 8

The personal transactions of the owner are
separate from that of the business he/she
owns

Answer 8

Accounting Entity

Question 9

The company will continue operating
indefinitely until the foreseeable future,
and that company closure is not
imminent.

Answer 9

Assumption of Going

Concern

Question 10

Providing financial accounting information for
specified period of time
Transactions are summarized and reported at
regular time intervals

Answer 10

Time period or Periodicity Concepts

Question 11

Transactions are express in a monetary unit of
measure
Financial in nature
are recorded with the corresponding amount
expressed in the country’s currency.

Answer 11

Monetary Unit

Principles

Question 12

Also known as the historical cost.

Means that all properties and services
acquired by the business must be recorded at
their original acquisition cost.

Amount shown in financial statements are
historical cost

Answer 12

Cost Principle

Question 13

States that ALL material facts that will
significantly affects the financial statement
must be indicated

Sufficient information for informed
judgements

Answer 13

Full Disclosure
Principle

Question 14

Established in recognition of the fact that
there is a cause-and-effect relationship
between revenue and expense.

Answer 14

Matching
Principle

Question 15

Income should be recognized at the time it is
earned such as when goods are delivered or
when service has been rendered and NOT when
the business receive the payment

Answer 15

Accrual Principle
(INCOME)

Question 16

Expenses should be recognized at the time it is
incurred such as when goods and services are
actually used and NOT at the time when the
entity pays for those goods and services.

Answer 16

Accrual Principle

(EXPENSE)

Question 17

Means that financial reporting is only
concerned with information significant
enough to affect decisions.

Answer 17

Materiality

Question 18

In situation where there are two
possibilities, choose the one that will have
the least favorable effect on the financial
statement.

Answer 18

Conservatism Principle

Question 19

Assets – Liabilities

Answer 19

Owner’s Equity

Question 20

Assets - Owner’s Equity

Answer 20

Liabilities

Question 21

LIABILITIES + OWNER’S
EQUITY

Answer 21

ASSETS

Question 22

different example of assets:

Answer 22

Cash
Accounts Receivables
Notes Receivables
Inventories
Prepaid Expenses
Equipment
Furniture and Fixtures
Vehicles
Land and Building

Question 23

Resources owned
by the business

Answer 23

ASSETS

Question 24

Financial obligations
of the business

Answer 24

LIABILITIES

Question 25

Right of the owner
on the assets of the
business

Answer 25

OWNER’S
EQUITY or capital

Question 26

different example of liabilities:

Answer 26

Accounts Payables
Notes Payables
Salaries Payable
Taxes Payables
Interest Payables
Mortgage Payable

Question 27

gross inflow of economic benefits
during the period arising in the course of
ordinary activities of an enterprise when
these inflows result in increase on equity
other than those relating to contributions
from owners.

Example: Sales Income, Sales Revenue,
Service Income, Service Revenue, and
the likes.

Answer 27

REVENUE or
INCOME

Question 28

-costs incurred to produce revenue. It is the
“gross outflow of economic benefits during
the period arising in the course of ordinary
activities when these outflows result in
decrease on equity, other than those relating
to distributions to owners.

examples
Salaries Repairs and Maintenance
Rent Representation
Utilities Communication
Depreciation …and many others

Answer 28

EXPENSES

Question 29

DEBIT:

Answer 29

Assets
Expenses
Withdrawals

Question 30

CREDIT

Answer 30

Liabilities
Capital
Income

Question 31

A listing of the names of the accounts that a company
has identified and made available for recording
transactions.

Answer 31

Chart of Accounts

Question 32

The owner of the business bought a car for personal use. The invoice
was given to the accountant who recorded it as the asset of the business.

Answer 32

Business Entity
Concept

Question 33

Purchased an equipment at a cost of P100,000 which was immediately
recognized as an expense even if the equipment’s useful life is 5 years.

Answer 33

Matching Principle

Question 34

No financial statements were prepared by Sonia Santos for her business.
She explained that she will prepare the financial statements when she
closes the business which she predicted to take place after thirty years.

Answer 34

Periodicity Concept

Question 35

The company included an equipment purchased from Europe. It was
reported in the statement of financial position at 2,500 Euros. All other
assets were reported in Philippine Pesos.

Answer 35

Monetary Unit
Principle