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Activity Worksheet 001

This document is an activity worksheet for EL students in an accounting course, detailing various questions related to accounting concepts, principles, and financial statements. It includes multiple-choice questions, essay prompts, and true/false statements for students to complete. The worksheet is structured to assess understanding of accounting fundamentals and requires submission via CANVAS.

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Mark Lovie De La Cruz
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26 views4 pages

Activity Worksheet 001

This document is an activity worksheet for EL students in an accounting course, detailing various questions related to accounting concepts, principles, and financial statements. It includes multiple-choice questions, essay prompts, and true/false statements for students to complete. The worksheet is structured to assess understanding of accounting fundamentals and requires submission via CANVAS.

Uploaded by

Mark Lovie De La Cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BAACCEN

ACTIVITY WORKSHEET FOR EL STUDENTS


PROFESSOR: Alberto S. Malquisto, Jr. No. 001
Unit 1 & 2: Introduction to Accounting, Business Organizations, and Accounting
Concepts & Principles and Overview of Basic Financial Statements
Name: __Mark Lovie D. De La Cruz_________________________ SECTION CODE: __200_______

Please read the required activities carefully and make sure you understand the facts before you begin
answering. Please submit your answers through CANVAS ASSIGNMENTS using MS Word or PDF.

Your file name should be similar to this example: MALQUISTO_ASSIGNMENT001

I. Read each item carefully. Select the correct/best answer for each of the following questions and
write the letter of your choice on the space provided.

__ a 1. The following are the external users of general-purpose financial statements,


except:
a. Board of directors
b. Creditors
c. Government
d. suppliers

__ c 2. What phase of accounting involves routine and mechanical writing of business


transaction?
a. Summarizing
b. Posting
c. Recording
d. Classifying

__ d 3. All of the following sets a partnership business apart from a sole proprietorship
business except:
a. Number of owners
b. Capital accounts used
c. Distribution of business profits/losses
d. The rule of debit and credit being used

__ c 4. Which of the following CANNOT be reflected in the accounting records in


accordance with the Accounting Entity Assumption?
a. Acquisition of new furniture for business use
b. Additional investment to the business
c. Private vacation in an island
d. Payment of salaries and wages to employees

__ d 5. For a financial information to be faithfully represented, the following must be met,


except:
a. The information must be neutral.
b. The information must be complete.
c. The information must be free from material error.
d. The information must include non-financial matters.

Page 1 of 4
__ d 6. Determine which of these statements is true.
a. An income is recognized when payment is received according to accrual
basis assumption.
b. Partnership business can only be established by a maximum of two (2)
individuals.
c. The company management cannot be considered as a user of financial
information because it is the one that provides the same information.
d. Accounting can be used in making economic decisions.

__ a 7. Which does not belong to the group?


a. Relevance
b. Verifiability
c. Comparability
d. Understandability

__ c 8. Revenues differ from other types of income in such a way that:


a. Revenues are from incidental transactions.
b. Revenues may or may not be recorded upon the option of the business owner.
c. Revenues are derived from the normal operation of the business.
d. Revenues are credited when they are earned.

__ b 9. The following are characteristics of a relevant financial information, except:


a. The information must have predictive and confirmatory value.
b. The information leaves the decision maker no room to choose from.
c. The information offers a difference between or among alternatives.
d. The information can affect the decision to be made.

__ a 10. Determine the false statement from the choices.


a. Accounting involves matters that are both financial and non-financial in
nature.
b. Under the new corporation code, a single person can establish a corporation.
c. For an accounting information to be understandable, one must have
reasonable background in accounting.
d. The conceptual framework of accounting serves as a theoretical foundation
that assists the standard-setting body in developing new and reviewing
existing reporting standards.
__ c
11. Which of the following users of financial information is concerned about the
profitability of each division in a company?
a. Company management
b. Government
c. Investors
__ c d. Suppliers & other trade creditors

12. The Monetary Unit Assumption tells us that:


a. Business enterprises are assumed to have a long life.
b. Information presented must be free from material error.
c. The standard measuring unit for recording business transactions in our
country is the Philippine peso.
__ d d. Income is only recorded when payment is received.

13. If you are a user of financial information and you are after of the company's
ability to meet its interest payments on time, you must be a/ an:
a. Investor
b. Supplier
c. Employee
d. Lender

Page 2 of 4
__ c 14. Under Accrual Basis Assumption,
a. an income item is recognized when collected from the customer/client and
expenses are recognized when paid.
b. only expenses are recognized in order not to overstate the capital.
c. income is recognized when earned and an expense is recognized when
incurred regardless of when they are received or paid.
d. financial statements are prepared on a periodic basis.

__ d 15. Which arrangement is correct relative to the accounting cycle?


a. Journalizing, Posting, Financial Statement preparation, Adjustments
b. Posting, Post-closing Trial Balance, Adjustments, Journalizing
c. Adjustments, Reversing Entries, Posting, Journalizing
d. Journalizing, Posting, Unadjusted Trial Balance, Adjustments

II. Essay – Supply your answers for each situation. Your answers must not exceed seven (7)
sentences.

A. Choose one (1) accounting assumption, concept, or principle and explain how you can apply it
in your business by citing an example. (5 pts)
-Single entity concept is a basic concept in accounting which states that the owner and entity are
separate economic units, thus transactions of different entities should not be accounted for
together and should be evaluated separately. For example, I, the business owner, withdraw cash
from my bank account for vacation, it will be recorded separately from the business since it does
not involve in any business-related transactions.

B. Qualify this statement: Accounting is the language of business (5 pts)

- Accounting is referred to as the language of the business because it is the communication


link between the entity and the users of financial information. The financial information can
be provided after going through the accounting process from analyzing the transactions to
preparation of financial statements, in which users can determine the business’s
performance, results of operation, cash flows, and changes of owner’s capital. That is why
accounting is the language of the business because it provides financial information about
the business.

C. If you are to choose, what type of business would you have? Sole proprietorship, Partnership,
or Corporation? Explain why. (5 pts)
- If I were to choose what type of business I would form, it would be sole proprietorship
because it is easy to form and manage; further, unlike the other business forms, sole
proprietorship does not require higher capital to start, and the owner can freely control or
manage the business on his own. Most importantly, the profits will be all for the owner since
he is the sole owner of the business.

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III. Write the word TRUE for each correct statement; otherwise, write FALSE.

1. The income__ FALSE


statement reflects the performance of the business for a given period.
_
2. Assets represent inflow of economic benefit while liabilities represent outflow of benefits upon
their settlement.
__ TRUE _
3. There is net income when the total amount of expenses is equal to
__ FALSE the total amount of revenues.
_ 4. Owner’s withdrawals increase the capital account.
5. Paying for an asset acquired shall be reflected on the face of the
__ FALSE statement of cash flows.
_
6. The income statement reports information for a specific period
__ TRUE _
covered showing the revenues and expenses.
__ TRUE _ 7. The Statement of Financial Position (balance sheet) of a business
that has been in operation for more than 1 year will show balances
of accounts ONLY for the current year.
__ TRUE _
8. Information on equity/ capital can ONLY be found in the Balance
Sheet.
9. Expenses are the cost of operations incurred by the company in
__ FALSE
generating income.
_
10. The statement of changes in equity provides information about the
__ TRUE _ increases or decreases in the capital due to withdrawals, additional
investments, net income, or net loss.

Page 4 of 4

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