Quiz (Fundamental Accounting Concepts and Principles; The Accounting Equation)

1.

o Japanese Financial Reporting Standards

o Spanish Standards.
o international standards, called the International Financial Reporting Standards (IFRS)issued by the International
Accounting Standards Board (IASB) which is based in the U.K.
o U.S. GAAP.

2.

o Going concern
o Accrual basis
o Consistency
o Reporting period

3.

o Comparability
o Verifiability
o Understandability
o Timeliness

4.

o Single entity concept.

o Going concern concept.
o Matching principle.
o Historical cost concept.

5.

o Cooperative Development Authority

o Security and Exchange Commission
o Bureau of Internal Revenue
o Bangko Sentral ng Pilipinas

6.

o All of the choices

o Current value
o Fair value
o Value in use

7.
o Allowance for bad debts
o Accounts receivable
o Bad debts expense
o Notes receivable

8.

o Prepaid rent
o Travel expense
o Used Rental
o Rent expense

9.

o size.
o qualitative characteristics.
o verifiability.
o timeliness.

10.

o The term "IFRIC" generally includes "IFRS".

o The term "IFRS" generally includes "IAS".
o The term "IAS" generally includes "IFRS".
o The term "IAS" generally includes "IFRIC".

11.

o Materiality
o Going concern
o Stable monetary unit
o Separate entity concept

12.

o Faithful representation
o Materiality
o Historical cost
o Free from error

13.

o Accounting standards
o Accounting concepts
o Accounting laws and regulations
o Accounting principles

14.

o Using the same accounting treatment for similar items from period to period.
o Recording sales revenue when a sale occurs rather than when the sale price is collected.
o Treating the business as a separate entity from its owner.
o Measuring assets at their acquisition cost.

15.

o Materiality.
o Going concern
o Stable monetary unit.
o Separate entity concept.

16.

o ASSETS: P920,000 = LIABILITIES: P710,000 + EQUITY: P290,000 + INCOME: P440,000 - EXPENSES:

P520,000
o ASSETS: P870,000 = LIABILITIES: P310,000 + EQUITY: P240,000 + INCOME: P470,000 - EXPENSES:
P150,000
o ASSETS: P890,000 = LIABILITIES: P240,000 + EQUITY: P240,000 + INCOME: P600,000 - EXPENSES:
P190,000
o ASSETS: P740,000 = LIABILITIES: P530,000 + EQUITY: P170,000 + INCOME: P1,900,000 - EXPENSES:
P1,860,000

17.

o Adding together of assets, liabilities, equity, income or expenses that have shared characteristics.
o Determining where an item should be presented in the financial statements
o Capturing for inclusion in the statement of financial position of the statement(s) of financial performance, an
item that meets the definition of one of the elements of the financial statements - an asset, a liability, equity,
income or expenses
o Sorting assets, liabilities, equity, income or expenses on the basis of shared characteristics

18.

o total increases in net assets other than revenues

o total receipts of cash in excess of the historical costs of the assets being sold
o total receipts of cash
o total revenues

19.
o ₱40M
o ₱80M

o ₱70M
o ₱60M

20.

o Relevance
o Timeliness
o Faithful Representation
o Comparability

21.

o Utilities expense.
o Notes payable.
o Interest expense.
o Prepaid rent.

22.

o SEC.
o CDA.
o BIR.
o BSP.

23.

o ₱125M
o ₱95M
o ₱85M
o ₱135M

24.

o Insurance expense
o Government expense
o Utilities expense
o Taxes and licenses

25.

o 320,000
o 360,000
o 900,000
o 380,000

26.

o Matching principle
o Historical cost concept
o Separate entity concept
o Going concern

27.

o Either predictive and confirmative value, or both

o Both predictive and confirmative value
o Only predictive in value
o Only confirmative in value

28.

o Total income of ₱630,000 and loss of ₱150,000

o Total income of ₱360,000 and profit ₱120,000
o Total income of ₱630,000 and profit of ₱150,000
o Total income of ₱580,000 and loss of ₱100,000

29.

o Money expense
o Cash
o Cash payable
o Cash expense

30.

o All three statements are concerned with the financial position of a business at a particular time.
o The balance sheet.
o The income statement.
o The statement of cash flows.
31.

o Time period
o Periodicity
o Reporting period
o All of these

32.

o Service fees
o Sales
o Gains
o Interest income

33.

o The enhancing qualitative characteristics can convert non-useful information to useful information.
o Neutrality means information is selected or presented with bias to increase the probability that the information
will be received favorably by the users.
o Free from error means the information contained in the financial statements is perfectly accurate in all respects.
o Information that is not capable of affecting the decisions of users is considered irrelevant.

34.

o Relevance
o Timeliness
o Comparability
o Verifiability

35.

o Choosing a potentially unfavorable outcome over a potentially favorable one.

o Doing nothing in cases of uncertainty.
o Deliberately understating assets and income and deliberately overstating liabilities and expenses.
o Choosing a potentially favorable outcome over a potentially unfavorable one .

36.

o Materiality
o Going concern
o Cost-benefit or Cost constraint
o Relevance

37.
 o Owner’s drawing
o Owner’s equity
o Salaries payable
o Interest expense

38.

o Philippine Financial Reporting System (PFRS)

o Philippine Financial Reporting Standards (PFRS).
o Philippine GAAP.
o Filipino Accounting Standards (FAS).

39.

o Only statement II is true.

o Neither statement I nor II is true.
o Both statements I and II are true.
o Only statement I is true
40.

o A portion of an entity
o A single entity
o More than one entity
o I, II, and III
o None from the given choices

41.

o Rent expense
o Interest Expense
o Travel expense
o Cost of sales

42.

o Immediately after it is issued

o For annual reporting periods beginning on or after 1 January 2020, with early application permitted
o None of the given choices
o Never - the conceptual Framework is only used by the International Accounting Standards Board

IDENTIFICATION:
a Separate entity
b Going concern
c Time period
d Stable monetary unit
e Historical cost concept
f Accrual basis of accounting
g Matching
h Prudence
i Materiality
j Cost-benefit
k Full disclosure
l Consistency
m N/A

43. TSR Company has paid the 2 years advanced rent required in their building space lease contract, total payment
was recognized as expense in the year it was paid. ---f matching
44. In 2018, Lisa Corporation has purchased a piece of land for P1,000,000. After 3 years, in 2021, the land was
determined to have appraised in market value for which the owners would like for such increase in value to be
reflected in the financial report --- e
45. Rose, a businesswoman, is using her car for both business and personal use. However, in the company’s
accounting record, the full cost of the car was included --- a
46. The death of the company president will surely affect the company’s operation. For this reason, the company’s
manager would like to instruct the company accountant to make a loss provision of which expected loss be based
on his estimates ---- a None
47. Jennie, an accountant, has provided the business owners with a financial report for the year 2020; however, due
to lack of time, she was only able to record and summarize transactions for a 10-month period in 2021, for which
the financial report was based --- c
48. Haruto owns two businesses, a restaurant and a water refilling station. Since for tax purposes, both businesses
would be taxed under Haruto’s TIN number, he has maintained only 1 book for both businesses --- a
49. Mr. Tuan, a Chinese businessman, records only those sales that are made in cash --- f
50. After the determination of the income of his business, Mr. Jihoon withdraws all the income earned by his
business. It was his belief that the business might be bankrupt next period that he, better enjoys the fruits of his
business operation ---- b
51. Somi, the beautician, has imported some supplies from Japan. Due to the fluctuation in foreign currency
exchange rate, her accountant has recorded such transactions in its yen equivalent, while all records are
denominated in peso --- d
52. Jisoo, the accountant of BP Company, has not prepared any financial statements for her company since its
inception --- c
IDENTIFICATION:
53.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

54.
o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

55.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

56.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

57.
o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

58.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

59.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

60.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
 o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

61.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

62.

o Predictive value
o Confirmatory value
o Materiality
o Completeness
o Neutrality
o Free from error
o Comparability
o Verifiability
o Timeliness
o Understandability
o Cost-benefit constraint
o N/A

IDENTIFICATION

a Asset
b Liability
c Equity
d Income
e Expense
Withdrawal or Drawing --- c
Loans payable --- b
Interest payable --- b
Building ---- a
Salaries payable --- b
Cash --- a
Equipment --- a
Service income --- d
Accounts payable --- b
Notes payable ---- b
 Land ---- a
Machineries ---- a
Automobile ---- a
Furniture --- a
Owner's Investment ---- c
Utilities expense --- e
Supplies --- a
Interest expense --- e
Rent expense --- e
Accounts receivable --- a
IDENTIFICATION

Increase, decrease, or NE (have No Effect)

A company paid the salaries of its employees A(-) L(-) E(_)
A firm renders services on account A(_) L(+) E(+)
Acquisition of machines on account A(+) L(+) E(+)
Acquisitions of machine in cash (
Payment of amount due to suppliers
The company was able to collect receivables
Owner withdrew cash for personal use
Purchase of supplies on account
The owner invested additional cash
Receipt of proceeds from bank loan
A company paid the salaries of its employees
A firm renders services on account
Acquisition of machines on account
Acquisitions of machine in cash
Payment of amount due to suppliers
The company was able to collect receivables
Owner withdrew cash for personal use
Purchase of supplies on account.
The owner invested additional cash
Receipt of proceeds from bank loan
A company paid the salaries of its employees
Acquisitions of machine in cash
The company was able to collect receivables
A company paid the salaries of its employees
Acquisitions of machine in cash
The company was able to collect receivables
OPEN ENDED:

What is the ending amount of Liabilities?

130,000

What is the amount of Withdrawals?

5,000
What is the ending amount of Net Income or Loss?
10,000 loss

What is the ending amount of Equity?

220,000

What is the ending amount of Net Income or Loss?

25,000

What is the ending amount of Assets?

500, 000

What is the ending amount of Liabilities?

70,000

What is the amount of Additional Investments?

20,000