Casambros, Hannah Cathrina Q.

ACT 225
1. a. 7,150,000
b. The type of operation that May Perez’s business have is a service business and the form of her business is sole
proprietorship.
c. May is a graduate of culinary arts and an OFW working in a hotel in London so basically while working as an OFW in
London she wasn’t able to enhance her skills in culinary arts and she was given an opportunity to start up a business
since she was able to save 100,000 pounds and since pastry is her expertise, it would be a waste if she won’t make use
of her skills.
2. a. The form of business of the second venture is partnership and the type of operation is service business.
b. The primary source of the capital is the owner, while the second source of capital is a relative, friend, bank or
cooperative.
c. The additional assets that they will need to buy are cars, land & buildings, furniture, etc. 5,000,000 capitals will not be
sufficient for her to expand her business and put up a Tour and Travel Agency.
3.
1.B, C 6. B
2. B 7. C
3. A 8. C
4. A, B, C 9. C
5. C 10. B, C

4. 1. A 5. a. Controlling, 6. 1. C 8. a. Relevance 9. a. Interpreting

2. C Human resource 2. C b. Compatibility b. Analyzing
3. E b. Decision making, 3. C c. Control c. Reporting
4. D Production 4. A d. Flexibility d. Data Gathering
5. D c. Planning, Finance 5. A e. Cost-benefit e. Classifying
d. Controlling,
Human resource
e. Directing, Sales
10. According to Accounting Information System, financial data that affects the specific business will be accumulated or
gathered in the first phase. Systematic analyzing or encoding of accounting data based on documents received will be
the phase 2. Phase 3 of AIS will be determining/ classifying how information affects value of the specific business. Lastly,
the data financial information in a condensed format to be better understood by the statement users will be
summarized or reported before interpreting or evaluating the reported financial information to allow statement users to
make informed decisions about the business.
11. a. Maamo’s travel agency net worth is P300,000 while Maganda’s beauty parlor net worth is P200,000.
b. Maamo’s travel agency return on equity is P33.33 while the return on assets is P20. Maganda’s beauty parlor return
on equity is P50 while the return on assets is P25.
c. Maamo’s travel agency is more solvent because the higher the net worth, the more solvent the business is, and they
are more profitable than Maganda’s beauty parlor.
12. The revised total assets of Gary’s business would be P1,100,000 and the net worth to the owner is P600,000. Willy
P750,000 will be sufficient to buy the business of Gary.
GUIDE QUESTIONS
22. International products, partnerships between foreign and domestic businesses, and foreign investors certainly, e-
commerce and globalization have reached every nation. In the present, the world has international trade and high-
powered information technology have helped the world get smaller. The development of advanced electronic gadgets
has altered many aspects of modern life, including manufacturing, transmission, and design.
The way you go about your business and where you dine have both been significantly impacted by technology. WIFI
allows you to observe and communicate with suppliers and customers in the virtual market. With teachers and students
interacting in a virtual classroom, education has also gone online. Trade obstacles have been removed, there is free
movement of products and services around the world, and the market has expanded and become more diverse (trade
internationalization). Goods must therefore accommodate the many cultures, values, and customs of individuals living in
various regions of the world. Due to the sale of goods and services across borders, business laws and taxes need to be
examined and updated.
23. To adapt, one must invent, reinvent, retool, retrain, and go digital. The phrases are digital and inventive items.
Create innovative items; smart watches are one example of this check the vital signs (heart rate, blood pressure and
sugar). We must understand that whatever a creative mind perceives as a problem also has a solution. We now even
have online conferences, meetings, and classes.
24. I should have strong interpersonal, communication, and intellectual abilities, as well as honesty, a positive attitude,
moral principles, competence, and a critical mind as a businessperson in the twenty-first century. Additionally, I want to
be adjustable, imaginative, and flexible. I ought to be able to communicate with others so, people can understand me,
plainly. I must be able to successfully complete each task or function given to me, and I must be conscious of
environmental changes. Accept these modifications and make the necessary changes. I need to be imaginative and open
to new concepts. I need to be critical in my thinking and be able to see and define the issue.
25. Many hats are worn by a certified public accountant. A management consultant offers management advice on many
delicate issues such as analysis, design, review, and installation of an accounting information system, financial planning,
profit planning, operation, and cost controls.
26. To be an effective company officer, the skills that a businessperson or accountant must posses are effective
communication skills, integrity, positive attitude, adaptability and flexibility, creative and innovative, critical mind,
interpersonal and intellectual skills, stronger qualities, resiliency, discernment, and collaborative teamwork.
27. Auditor, tax, and management consultants are among the employment options in public accounting. Financial
accountant, controller or chief information officer, budget officer, internal auditor, electronic data processing head or
cost accountant, and tax auditor are all career options in industry accounting. Government and Not for Profit Accounting
is another career field where one works as accountant, auditor, budget officer or electronic data processing head of any
of the government agencies, religious organizations, labor unions, colleges, universities, trade associations and many
others. Lastly, there are career opportunities in research and education, including professor of accounting and
accounting reviewer.
28. The CPA Licensure Examination, often known as the CPALE, must be passed before one can practice their profession.
The following criteria must be met in order to be eligible for the CPALE under the 2004 Accountancy Act. Before
practicing accounting and auditing, certified public accountants must pass the licensing exam, register, and obtain a
license. Candidate requirements include being a citizen of the Philippines, having excellent morals, and possessing a
degree. Bachelor of Science in Accounting, or its equivalent, from a recognized university academy or a college. In order
to pass the licensing test and get a license to practice, Candidate must receive a seventy-five percent (75%), without a
grade any subject scoring lower than 65%.
The candidate must enroll in a refresher course in any authorized accountancy program before retaking the license
examination if they are unable to pass it after two attempts. The registrant will also receive a professional identification
card in addition to a certificate of registration. When creating documents to be signed, used, or issued in conjunction
with the practice of their profession, certified accountants need both. lists the restrictions, vested rights, and
prohibitions that apply to the practice of accounting. requires individual certified public accountants (CPAs), as well as
businesses and partnerships of CPAs, to possess an accreditation certificate.
29. Intermediate Accounting involves the preparation and interpretation of financial statements primarily intended for
external users such as the investors, lenders, suppliers, government, and customers. Cost Accounting deals with
recording, classifying and summarizing the details of materials, labor and overhead necessary to produce and sell a
product or service. Management Accounting deals with financial and non-financial information primarily for managers
and other internal users to assist them in planning, directing and controlling the affairs of the business. Accounting
information are used to evaluate performance, determine, analyze and control cost and cost behavior to achieve the
target profit, prepare operating and capital budgets, and design and install accounting info system.
30.
a) external auditor - A company's financial records are e) budget officer - The Budget Officer enforces budgeting
examined by an external auditor, who then presents their and financial record-keeping procedures that ensure
findings. The external auditor oversees conducting audits effective coordination of various departmental, grant,
of operations, checking financial accounts for fraud and and designated accounts, maintains accurate data
errors, reporting findings, and making recommendations. regarding the cost center's financial status, instructs the
b) accountant - A company's financial data is processed direct supervisor concerning financial choices, helps the
and tracked by an accountant, a business specialist. direct supervisor and the cost center's department heads
Accountants organize and examine financial data. They with allocation and expense estimations, and creates a
make sure that everything is recorded and accurate by variety of operational and financial findings.
carefully tracking all money that enters and leaves a f) management consultant - Management consultants
business. Payroll and invoicing are two daily financial assist businesses in problem-solving, value creation,
tasks that accountants handle. They also develop budgets maximizing growth, and enhancing operational efficiency.
to plan for future business decisions based on financial They assist an organization in developing any specialty
reporting and analyses. talents that it may be lacking by using their business skills
c) controller - A controller's responsibilities include to offer unbiased advise and experience. The strategy,
supervising financial reporting, assisting with the creation structure, management, and operations of a company
of operating budgets, and carrying out crucial payroll- will be your main focus. Your responsibility is to discover
related tasks. The controller is responsible for a variety of choices for the organization, make recommendations for
duties, such as creating budgets and overseeing crucial change, and offer advice on extra resources to carry out
organizational budgeting plans. These covers gathering, your ideas.
analyzing, and combining financial data. Although the g) internal auditor - An internal auditor is a member of
controller position generally does not maintain the staff who independently and impartially assesses the
annual budget performance of the corporation. An internal auditor's job
d) tax officer - Your main responsibility as the tax is to compile accurate and pertinent information about
accountant will be to suggest legal and law-compliant tax the company. A company's senior leadership and board
plans that will benefit our company's financial health. of directors can think of an internal auditor as their eyes
You'll oversee filing tax forms, deciphering tax laws, and ears. Their tasks could be from any department
keeping an eye on market developments, and producing within the company, but the audit committee should set
tax reports. the priorities for them.
h) fraud examiner - Investigating claims of fraud, waste,
or abuse made against our business by clients is one of
the duties of the fraud investigator. reviewing and
investigating the relevant material to produce a
professional report with recommendations after
analyzing the claim's overall factual framework.

31. The Board of Accountancy was established by Republic Act 3105, which governed the accounting profession on
March 17, 1978. It is entrusted with creating and disseminating a set of professional standards and ethics for the
practice of the accounting profession and is under the purview of the PRC. By administering exams to CPA candidates,
awarding certificates to board passers, registering and suspending members, having conversations with accountancy
students, examinees, and accountants, and holding seminars to keep CPAs up to date on current accounting and
business standards and policies, it continuously monitors the practice of accountancy in the Philippines.
On October 26, 1936, SEC was founded by C.A. 83. Its job is to protect everyone's interests, especially those of capital
market participants (stocks and bonds). It controls how partnerships, corporations, organizations with operating
licenses, and foreign businesses conducting business in the nation conduct their business. It examines and registers
company-issued securities. In addition to monitoring brokers, dealers, transfer agents, investment firms, and other
market participants, it assesses financial position and performance. It makes sure that investors receive complete and
accurate information about publicly traded companies and safeguards them against manipulators and underhanded
transactions.
32. Education Technical Council – it is tasked to assist the BOA in matters in involving curriculum-making, teaching
standards, monitoring the progress of accountancy programs and evaluating the performance of educational institutions
offering accountancy.
Continuing Profession Education Council - it conducts several seminars to update the accountants' competency in the
following areas: Enabling Laws, Rules and Regulations, Accounting Practice Standards, Ethics and Governance,
Environment of the Practice and Personal Profession Development.
Financial Reporting Standard Council - Advise the Minister on matters relating to financial reporting standards; and.
Consult with the Minister on the making of regulations establishing financial reporting standards.
Quality Review Council – it was created to review the quality control measures set up by the CPAs to ensure quality of
audit of financial statements.
Philippine Interpretation Committee - The FRSC (Financial Reporting Standards Council) formed the Philippine
Interpretations Committee (PIC) in August 2006 to assist the FRSC in establishing and improving financial reporting
standards in the Philippines. The role of the PIC is principally to issue implementation guidance on PFRSs (Philippine
Financial Reporting Standards).
33. The Framework is a pervasive structure which sets the boundaries of the accounting practice with its basic rules,
objectives and assumptions. The framework provides formation of accounting standards which prescribe the nature of
financial reporting. With the Financial Reporting Standards and the Framework, statement users are assured of reliable
financial reports and relevant financial information since these are assembled based on acceptable practices and rules
and regulations set up by authoritative accounting bodies duly supervised by government regulatory agencies.
34. The mission of International Accounting Standards Board is to develop IFRS Standards that bring transparency,
accountability and efficiency to financial markets around the world. Their work serves the public interest by fostering
trust, growth and long-term financial stability in the global economy.
Investors and other market participants can make wise economic decisions thanks to the improved worldwide
comparability and quality of financial information brought about by IFRS Standards. By closing the information gap
between capital suppliers and the persons with whom they have committed their funds, IFRS Standards improve
accountability. Our Standards include the details required to hold management accountable. IFRS Standards are also
extremely important to authorities across the world as a source of information that is similar across borders. IFRS
Standards improve capital allocation by assisting investors in recognizing opportunities and dangers around the globe.
This increases economic efficiency. The employment of a single, well-respected accounting language saves capital costs
for organizations and lowers the price of worldwide reporting.
35. Good governance is the process of directing the affairs of the firm with a view of upholding standards amd
protecting interest of all stakeholders. Good governance has been codified by the SEC with a view of controlling financial
activities and the way these activities are reported and disclosed. Ensuring integrity in financial reporting, by faithful
compliance with all applicable laws & developments, making timely and relevant disclosures and inform stakeholders of
all important developments are some practices of good governance. Good governance requires that a code of
Professional Conduct be set up to guide businessmen to behave in a professional manner consistent with high ethical
standards expected of them by the public.
36. The bottom line of an entity’s success hinges on the performance levels which is the 3 P’s: Profit, People, and Planet.
Profit is maximizing of owner’s wealth or financial performance and some examples of it are quality development costs
such as improved product processing/packaging, inspection costs, wastage and scraps and employee development costs
such as health/medical care, safety shoes and wears, training/leadership. Some examples of social performance or
promoting people’s well being are setting up livelihood projects, providing free education, sending medical and dental
missions to remote and poor places, building houses and schools, donating books and computer equipment. Here are
some examples of planet or environmental performance: Villar land and Ayala land has launched its green environment
programs, so with Moto lite, with the proper disposal of discarded batteries and Cebu Pacific with the proper use of its
fuel supply. Even Jollibee has launched a program on conservation of water and energy.
37. Ethics is a set of moral principles and values which guides one to distinguish between right and wrong and to
conduct oneself accordingly. In accounting, financial statements are the main source of information of practically most
of the stakeholders outside of the firm. Since there are also used to evaluate management performance the objectivity
and validity of the reports might be questioned. To prevent this, the one preparing the report must be trustworthy or
credible.
38. The six ethical standards are credibility, integrity, objectivity, competence, independence and confidentiality. Here
are some guides to comply with these ethical standards: avoid casting doubts when making decisions, analyze a problem
by considering both the good and bad consequences, choose carefully the best option after considering all
consequences, consultant's fee must not be based on profit performance of the firm, and a consultant should not make
direct investment in the client's firm.
39. Disclosure of non-financial measures may include a description of environmental programs created by the firm such
as bidding procedure for wastes and scrap, handling and recycling procedures for scrap required to be part of the
bidders' action plan. Depreciation of equipment to reduce emissions, enhanced product processing, and correct
chemical/waste disposal may all be mentioned in a report on preventative or protection expenses. The reports include
data on resource use, waste, and pollution emission reduction percentages.
40. Some large corporations have done their part in alleviating poverty by setting up livelihood projects for the deprived,
providing free education for the poor, sending medical and dental missions to remote and poor places, creating
classrooms and schools donating books and computer equipment among others. While Villar land and Ayala land has
launched its green environment programs, so with Moto lite, with the proper disposal of discarded batteries and Cebu
Pacific with the proper use of its fuel supply. Even Jollibee has launched a program on conservation of water and energy.
41. The social costs and expenses that may be included in the financial reports are quality development costs such as
improved product processing/packaging, inspection costs, wastage and scraps and employee development costs such as
health/medical care, safety shoes and wears, training/leadership.
42. A report on preventive or protection costs may include depreciation of gadgets to control emissions, improved
product processing, and proper disposal of chemicals/wastes. Corrective or rehabilitation programs may include the cost
of replenishing the environment, neutralizing wastes before disposal, etc. Some corporations, as part of their managerial
report, show the impact of tons of pollutants or chemicals emitted in terms of ratio or percentage against the preventive
or corrective costs incurred. Likewise, the reports contain the percentage of reduction of pollution emission, resources
used and wasted.