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ACCOUNTING AND REPORTING > Lesson 2 > Flashcards

Lesson 2 Flashcards

1
Q

The business is viewed as a separate entity, distinct from its owner(s). Only the transactions of the business are recorded in the books of accountsThe personal transactions of the business owner(s) are not recorded.

Basic Accounting Concepts

A

Separate entity concept

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2
Q

assets are initially recorded at their acquisition cost.

Basic Accounting Concepts

A

Historical cost concept (Cost principle)

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3
Q

The business is **assumed to continue **to exist for an indefinite period of time.

Basic Accounting Concepts

A

Going concern assumption

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4
Q

Some costs are initially recognized as assets and charged as expenses only when the related revenue is recognized.

Basic Accounting Concepts

A

Matching

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5
Q

The life of the business is divided into series of reporting periods.

Basic Accounting Concepts

A

Reporting Period

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6
Q

Assets, liabilities, equity, income and expenses are stated in terms of a common unit of measure, which is the peso in the Philippines

Basic Accounting Concepts

A

Stable monetary unit

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7
Q

An item is considered material if its omission or misstatement could influence economic decisions.

Basic Accounting Concepts

A

Materiality concept

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8
Q

matter of professional judgment and is based on the size and nature of an item being judged.

Basic Accounting Concepts

A

Materiality

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9
Q

the costs of processing and communicating information should not exceed the benefits to be derived from the information’s use.

Basic Accounting Concepts

A

Cost-benefit

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10
Q

information communicated to users reflect a balance between detail and conciseness, keeping in mind the cost-benefit principle.

Basic Accounting Concepts

A

Full disclosure principle

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11
Q

like transactions are accounted for in like manner from period to period.

Basic Accounting Concepts

A

Consistency concept

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12
Q

The PFRSs are Standards and Interpretations adopted by the FRSC. They consist of the following:

A
  • Philippine Financial Reporting Standards (PFRSs);

Philippine Accounting Standards (PASs); and

Interpretations

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13
Q

Fundamental Qualitative Characteristics

Qualitative Characteristics

A

i. Relevance (Predictive Value, Confirmatory Value, Materiality)
ii. Faithful Representation (Completeness, Neutrality,
Free from error)

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14
Q

Enhancing Qualitative Characteristics

Qualitative Characteristics

A

i. Comparability
ii. Verifiability
iii. Timeliness
iv. Understandability

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15
Q

are the characteristics that make information useful to users.

Fundamental vs. Enhancing

A

fundamental qualitative characteristics

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16
Q

are the characteristics that enhance the usefulness of information

Fundamental vs. Enhancing

A

enhancing qualitative characteristics

17
Q

Information is relevant if it can affect the decisions of users. true or false?

A

true

18
Q

The information can be used in making predictions

Relevance

A

Predictive value

19
Q

The information can be used in confirming past predictions

Relevance

A

Confirmatory value

20
Q

is an ‘entity-specific’ aspect of relevance.

A

Materiality

21
Q

means the information provides a true, correct and complete depiction of what it purports to represent

A

Faithful representation

22
Q

all information necessary for users to understand the phenomenon being depicted is provided.

Faithful representation

A

Completeness

23
Q

information is selected or presented without bias

Faithful representation

A

Neutrality

24
Q

there are no errors in the description and in the process by which the information is selected and applied.

Faithful representation

A

Free from error

25
Q

the information helps users in identifying similarities and differences between different sets of information.

Enhancing Qualitative Characteristics

A

Comparability

26
Q

different users could reach consensus as to what the information purports to represent.

A

Verifiability

27
Q

the information is available to users in time to be able to influence their decisions.

A

Timeliness

28
Q

(a)Reasonable knowledge of business activities; and (b)
willingness to analyze the information diligently.

A

Understandability

29
Q

Is tasked with regulating corporations, including partnership

Relevant regulatory bodies

A

Securities and Exchange commission (SEC)

30
Q

Is tasked in collecting national taxes and administering the provisions of the tax code.

Relevant regulatory bodies

A

Bureau of Internal Reveneu (BIR)

31
Q

Is tasked in regulating banks and other entities performing banking functions

Relevant regulatory bodies

A

Bangko Sentral ng Pilipinas (BSP)

32
Q

Is tasked in regulating cooperatives

Relevant regulatory bodies

A

Cooperative Development Authortiy (CDA)

ACCOUNTING AND REPORTING (8 decks)

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