Quiz 1

1. The separate entity concept contributes to the objective evaluation of the financial strengths
and weakness of a business. - True
2. Bookkeeping and accounting are the same. False
3. An item that is considered material by one business is always considered material by all other
businesses. - False
4. Accounting is described as a practical art. This is because it is a body of knowledge which has
been systematically gathered, classified and organized. - False
5. Accountable events are those that affect the assets, liabilities, equity, income and expenses of a
business. - True
6. A business that is not a going concern is called a coming concern - False
7. In contrast with bookkeeping, accounting does not end with recording, but rather extends to
communicating the information processed, including the interpretation of the significance
thereof - True
8. There are numerous accounting concepts and principles that the accountant needs to consider
when recording and communicating accounting information. -True
9. The Conceptual Framework is not a Standard. Rather, it serves as a guide in developing,
understanding or analyzing the Standards. - True
10. All business transaction are recorded in the accounting records, without exception. – False
11. Qualitative information is information expressed in numbers. - False
12. Financial information in accounting reports is also quantitative information. - True
13. The basic purpose of accounting is to provide information that is useful in making economic
decisions. - True
14. The accounting standards used in the Philippines are the same as the standards used
internationally. - True
15. Sociological and psychological matters are within the scope of accounting. - False
16. The accounting standards used in the Philippines are represented by the PFRSs. - True
17. Accounting is often referred to as the "language of the soul" because it is fundamental to the
communication of financial information. - False
18. The term "accounting concepts" and "accounting principles" (and other similar terms) are
usually used interchangeably in practice. Collectively, these refer to a generally accepted set of
logical notions and procedure that serve as guide for recording and communicating accounting
information. True
19. Accounting is described as an information system. This is because it requires the use of creative
skills and judgment. - False
20. A reporting period that start on May 1 of the current year and ends on April 30 of the following
year is called a fiscal year period. - True
21. Contemporary accounting provides only quantitative information. -True
22. Only accountable events are recorded in the books of accounts. - True
23. The cost of providing financial information should exceed the expected benefits to be derived
from the information's use. - False

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 24. Accounting is a process of identifying, recording and communicating economic information that
is useful in making economic decision. - True
25. The basic objective of accounting is to provide information about a reporting entity that is useful
in making rational economic decisions - True

Quiz 2.

1. This branch of accounting focuses on catering to the information needs of external users.
– Financial Accounting
2. In accounting, the term “recording” is also called
- Bookkeeping
3. When making judgments and estimates under conditions of uncertainty, the accountant chooses
the potentially unfavorable outcome over the favorable one. This concept refers to
-Prudence
4. Treating a business and its owner as one and the same violate which of the following principles?
Separate Entity
5. Accounting has a long history. Which of the following is incorrect regarding the history of
accounting?
-
6. This process refers to the reporting of the information processed in the accounting system to
interested users
- Communicating
7. Which of the following statements is incorrect?
8. When reporting information in its financial statements, an entity strives for a balance between
detail and conciseness because neither too much detail nor too little information help users
make good decisions. This is an application of which of the following concepts?
- Full Disclosure
9. What concept justifies the use of the accrual basis and historical cost concepts?
- Going Concern
10. Which of the following is not one of the necessary processes performed in accounting in order to
provide information that is useful to interested users?
11. These users need accounting information in order to regulate businesses that are within the
scope of their legal authority.
- Government
12. Under the accrual basis of accounting, a business records a sale
- collected
13. Providing and using information entail cost. Accordingly, there should be a balance between the
cost of providing and using information and the information's usefulness, such that the
information's usefulness justifies its cost. This relates to which of the following concepts?
-

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 14. You own a business. Your business is engaged in buying goods at a wholesale price and reselling
them at retail prices on Facebook. Your business is a
-Merchandising
15. These are guidelines that accountants follow when recording and communicating accounting
information.
-
16. These users need accounting information in evaluating the stability of the business in so far as
their job security, future remuneration, and career growth and opportunities are concerned.
- Employees
17. Which of the following statements regarding accounting is incorrect?
-
18. Accounting is described in various ways. Which of the following is not one of those descriptions?
19. Under this concept, amounts in the financial statements are stated in Philippine pesos and
change in the purchasing power of the Philippine peso due to inflation are generally ignored
-Stable Monetary
20. Which of the following statements is correct?
21. Which of the following is not an advantage of a partnership over the other forms of business
organization?
22. Which of the following users of financial information is not considered a creditor of the
business?
23. It is the branch of accounting that involves the careful analysis of economic events and other
variables to understand their impact on decisions.
- Tax Accounting
24. The main purpose of accounting is
25. The most common form of business organization is
-Sole
26. It is the process of objectively evaluating evidence and expressing an opinion regarding the
correspondence between management’s assertions and established criteria.
- Auditing
27. The following are decisions made by external users except
28. This concept requires the preparation of financial statements at least annually
- Frequency of reportinh
29. An advantage of a sole proprietorship over the other forms of a business organization is
30. This accounting concept is "entity specific", meaning it depends on the facts and circumstances
surrounding a specific entity.
31. -Matereliaty

Quiz. 3

 Question 1
The elements of financial statement which relate to financial position are:
- Assets, Liability and Equities

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 Question 2
"Look it"s Superman", he says. "No it's just a little bird", she says. The information lacks
- Verifiability
 Question 3
IFRS stands for
-International Financial Reporting Standards
 Question 4
If the current measurement basis is used, assets are measured at:
- Replacement Cost
 Question 5
The official accounting standard setting body in the Philippines, as promulgated by law, is the
- (FRSC) Financial Reporting Standards Council
 Question 6
Information has this qualitative characteristic if two different users could reach a general
agreement as to what the information intends to represent.
- Verifiability
 Question 7
Which of the following statement IAS will be refer to learn about general purpose financial
statements
- IAS 1
 Question 8
A conceptual framework for financial reporting is
- Principle under pin
 Question 9
Which of the following statements is not correct regarding the basic accounting concepts?
-An entity that is going out of business is a going concern
 Question 10
The fundamental qualitative characteristic of financial information are
-Relevance and Faithful Representation
 Question 11
Recognition is the process of
- Incorporating an item in financial statements
 Question 12
These are qualitative characteristic that only increase the usefulness of information that is
already useful, but cannot make information that is not useful to be useful.
- Enhancing qualitative characteristics
 Question 13
Which of the following is not a contributory factors towards faithful representation?
- Consistency
 Question 14
Information has this qualitative characteristic if it provides a true, correct and complete
depiction of what it intends to represent.

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 - Faithful Representation
 Question 15
The enhancing qualitative characteristic of financial information include:
- Comparability and Understandability
 Question 16
The primary users of general purpose financial reports are
- Investor and Lenders
 Question 17
The process by which accounting standards are established is, by nature
- Democratic because a majority of practicing accountants worldwide must agree with a
standard before it becomes implemented.
 Question 18
Which of the following is least likely to be a source of an accounting concept?
- Law enacted by the Congress
 Question 19
Which of the following statements is incorrect regarding the accounting standards used in the
Philippines?
- The accounting standard used in PH are similar to those used in other countries
worldwide.
 Question 20
Which branch of accounting is governed by the Philippine Financial Reporting Standards?
-Financial Accounting

Quiz 4

 Question 1
This concept requires the preparation of financial statements at least annually.
- Reporting Period
 Question 2
Treating a business and its owner as one and the same violates which of the following principles?
- Separate Entity
 Question 3
These are guidelines that accountants follow when recording and communicating accounting
information.
- Accounting Concepts and Principles
 Question 4
Under the accrual basis of accounting, a business records a sale
- When the sale occurs
 Question 5
Which branch of accounting is governed by the Philippine Financial Reporting Standards?
- Financial Accounting

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  Question 6
Providing and using information entails cost. Accordingly, there should be a balance between the cost of
providing and using information and the information's usefulness, such that the information's usefulness
justifies its cost. This relates to which of the following concepts?
- Cost benefit
 Question 7
Information has this qualitative characteristic if it provides true, correct and complete depiction of what
it intends to represents.
- Faithful Representation
 Question 8
Information has this qualitative characteristic if two different users could reach a general agreement as
to what information intends to represent.
- Verifiability
 Question 9
What concept justifies the use of the accrual basis and historical cost concepts?
- Going Concern
 Question 10
Under this concept, amounts in the financial statements are stated in Philippine pesos and changes in
the purchasing power of the Philippine peso due to inflation are generally ignored.
- Stable monetary unit
Quiz 5
 Question 1
For presenting assets and liabilities of the face of statement of financial position PAS 1
- Allows mixed approach of current non-current distinction with order of liquidity
 Question 2
Who is responsible for the preparation and the fair presentation of an entity’s financial statements in
accordance with the PFRSs?
- Management
 Question 3
PAS 1 required to present on the face of statement of financial position as separate classification for the
following
- Current and Non-current assets, Current and non- current liabilities
 Question 4
Statement of changes in equity (SOCIE)
- Shows the amount at the beginning of the period, changes during the period, and the amount
at the end of the period for each component of quality.
 Question 5
PAS 1 is also applicable to
- Interim financial statements up to general features
 Question 6

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 This comprises all “non-owner changes in equity.” It excludes owner changes in equity, such as
subscription, issuance, and reacquisition of share capital and declaration of dividends.
- Total Comprehensive Income
 Question 7
Statement of profit or loss and other comprehensive income
- Provides information about the performance of an entity in a period
 Question 8
Which of the following is not a required disclosure under PAS 1?
-
 Question 9
Statement of profit or loss and other comprehensive income
- Consists of 2 parts
 Question 10
Which of the following is not one of the general features of financial statements under PAS 1?
- Cash Basis
 Question 11
Notes to the financial statements contain information in addition to that presented in the statement of
financial position, statement of comprehensive income, statement of changes in equity and statement of
cash flows. – True
 Question 12
These are the end product of the financial reporting process and the means by which information
gathered and processed is periodically communicated to users.
- Financial statements
 Question 13
Materiality judgment is least likely to be applied in which of the following?
- In determining whether the cost of processing and communicating information exceeds the
benefits expected to be derived from it
 Question 14
In making an economic decision, an investor needs information on the amounts of an entity’s economic
resources and claims to those resources. That investor would most likely refer to which of the following
financial statements?
- Statement of financial Position
 Question 15
Which of the following financial statements would be dated as at a certain date?
- Statement of Financial Position
 Question 16
PAS 1 sets out rules on
- Both content and form of financial statements
 Question 17
Name of PAS 1 is
- Presentation of Financial Statements
 Question 18

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 This type of presentation of statement of financial position does not show distinctions between current
and noncurrent items.
- Unclassified presentation
 Question 19
PAS 1 requires an assessment of the entity’s ability to continue as a going concern each time financial
statements are prepared. Who is responsible in making this assessment?
- Management
 Question 20
PAS 1 requires an entity to present current and non-current assets, and current and non-
Current liabilities, as separate classifications on the face of its statement of financial
- Unless a liquidity presentation provides more relevant and reliable infromation

Quiz 6
 Question 1
IAS 2 relates to all inventories except:
-Financial Instruments
 Question 2
Which of the following costs of conversion cannot be included in cost of inventory?
- Salaries of sales staff
 Question 3
Under perpetual inventory system, acquisition of merchandise for resale is debited to the
- Merchandise Inventory Account
 Question 4
What do inventories cost include?
- Purchase case, net of trade volume rebates, conversion costs and other to bring inventory to
its present condition and location
 Question 5
Gross profit for a merchandiser is net sale minus
- Cost of good sold
 Question 6
Entity A, a trading entity, buys and sells Product Z. Movements in the inventory of Product Z during the
period are as follows:
Date Transaction Units Unit cost Total cost
Feb. 1 Beginning inventory 100 ₱15 ₱1,500
7 Purchase 300 18 5,400
12 Sale 320
21 Purchase 200 21 4,200
 Question 7
What are inventories measured at?
- Lower of cost and Net Realizable Value
 Question 8

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 Entity A, a trading entity, buys and sells Product Z. Movements in the inventory of Product Z during the
period are as follows:
Date Transaction Units Unit cost Total cost
Feb. 1 Beginning inventory 100 ₱15 ₱1,500
7 Purchase 300 18 5,400
12 Sale 320
21 Purchase 200 21 4,200
 Question 9
The Coronet Company has a cost card in relation to an item of goods manufactured as follows:
Materials 70
Storage costs of finished goods 18
Delivery to customers (Freight out) 4
Non-recoverable purchase taxes 6
- 76
 Question 10
Which of the following costs are included in the cost of inventories?
- Transport cost for raw matrials
 Question 11
To compute cost of goods sold, ending inventory is _______________ from total goods available for
sale.
- Deducted
 Question 12
How should trade discounts be dealt with when valuing inventories at the lower of cost and net
realisable value (NRV) according to PAS 2?
- Deduct from cost
 Question 13
The cost of inventories, other than those dealt with in paragraph 23, shall be assigned by using FIFO or
weighted average cost formula for all inventories. An entity shall use the same cost formula for all
inventories having a similar nature and use to the entity.
- True
 Question 14
What does NOT need to be disclosed in the financial statements?
-Amount of inventories recognised as an expense

 Question 15
Entity A, a trading entity, buys and sells Product Z. Movements in the inventory of Product Z during the
period are as follows:

Date Transaction Units Unit cost Total cost

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12 Sale 320
21 Purchase 200 21 4,200
 What is NRV?
- Estimated selling price in the ordinary course of business, less the estimates costs of
completion and the estimated costs to make the sale
 Inventories are measured at
- Lower of cost and Net realizable value
 Which of the following is added to the cost of inventories
- Storage Cost of part-finished goods

Quiz 7
 Question 1
What information must be entered by the user when selling inventory items?
- Item No.
 Question 2
If ending inventory has been overstated, what will happen to net income?
- Net income will be overstated
 Question 3
Any report that shows by item the beginning inventory, purchases year-to-date, sales year-to-date, and
ending inventory can be called
- Alert report
 Question 4
A list of items that are close to the reorder points is called
- Alert Report
 Question 5
If the perpetual and the physical inventory agree, what effect will it have on inventory?
- Have no effect
 Question 6
What report will show the invoice number of both the sales and purchases of a particular item?
- Activity listing report
 Question 7
The sale of items will ____________inventory.
- Decrease
 Question 8
A list of the items that have not been sold in a number of months is called a(n)
- Slow moving report
 Question 9
Which is an inventory tracking method?
- Periodic
 Question 10
If ending inventory has been understated, what will happen to net income?
- Net income will be understated

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  Question 11
What is the feature called when a program allows the user to purchase an item in a case and sell it
individually?
- Bulk Selling
 Question 12
What inventory costing system is used by most computerized accounting systems?
- Periodic
 Question 13
The purchase of items will ___________ inventory.
- Increase
 Question 14
A report that list the perpetual inventory according to the data included in the accounting system and
includes a line that allows the user to enter in the physical inventory is called
- Physical comparison report
 Question 15
Inventory Shrinkage is used to report the difference between the perpetual/periodic inventory and the
- Physical Inventory
 Question 16
What inventory tracking system is used by a computerized accounting system?
- Perpetual
 Question 17
A list of the selling price for each item is called a(n)
- Price List
 Question 18
Which is not an inventory costing method?
- Physical
 Question 19
The total cost of the inventory should equal the ______________.
- GL- Inventory Account
 Question 20
When an item is sold, what method is used if the journal entry is
A/R XXXXX
Sales XXXXX

Cost of Goods Sold XXXXX

Quiz 8
 Question 1
The maintenance cost of a machine and used in manufacturing process are not included in the cost of
inventories. - False

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  Question 2
The cost of factory management is included in the cost of inventory. - True
 Question 3
Reversals of inventory write-downs may exceed the amount of the original write-down previously
recognized. - False
 Question 4
Storage cost of part-finished goods may be included in the cost of inventory, but not storage costs of
finished goods. - True
 Question 5
Import duties, freight-in and non-refundable purchase taxes form part of the cost of inventories. - True
 Question 6
Raw materials inventory is not written down below cost if the finished goods to which they will be
incorporated are expected to be sold at or above cost. - True
 Question 7
Trade discount are added to the cost of inventories. - False
 Question 8
According to PAS 2, inventories are measured at net realizable value. - False
 Question 9
According to PAS 2, net realizable value and fair value less cost to sell are the same. - False
 Question 10
If the cost of an inventory is P8 while its net realizable value is P6, the amount of write down is P2. -
True
Quiz 9
1. Cash payment for inventories on account P 50,000 - Operating
2. Cash receipts from dividends on long term investment 300,000 - Investing
3. Cash receipts from repayment of loan made to another entity 2,200,000 - Operating
4. Cash receipts from customer 2,000,000 - Operating
5. Cash receipts from issuance of ordinary shares P 4,000,000 - Financing
6. Cash payment for wages and other operating expenses 1,200,000 - Operating
7. Cash payment for taxes 400,000 – Operating
8. Cash payment for dividends 200,000 – Financing
9. Cash payment to purchase land 800,000 - Investing
10. Cash payment for insurance 100,000 - Operating

Quiz 10
 Question 1
Under IFRS, an entity can report finance cost in the statement of cash flows
- Either in operating or financing activities
 Question 2
Entity A acquires equipment by issuing shares of stocks. How should Entity A report the transaction in
the statement of cash flows?
- Financing Activities

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  Question 3
Cash payment to owners to acquire or redeem the entity's share are
- Cash outflows for financing activities
 Question 4
Cash receipts from royalties, fees, commission and other revenue are
- Cash inflows from operating activities
 Question 5
All of the following can be classified as cash and cash equivalents, except
- Equity investment such common shares of stocks
 Question 6
The primary purpose of a statement of cash flow is
- The primary purpose of the statement of cash flows is to provide information about cash
receipts, cash payments, and the net change in cash resulting from the operating, investing,
and financing activities of a company during the period.

 Question 7
Proceeds from an earthquake disaster settlement would be classifies as cash flows from
- Operating Activities
 Question 8
Which among the following can qualify as cash equivalent?
-

 Question 9
Which of the following statements best describes a statement of cash flows?
-
 Question 10
Cash arising from trading of securities
- Classified as operating activities
 Question 11
Under IFRS, the dividend received from share investments can be classfified
- Investing activities
 Question 12
An entity shall prepare a statement of cash flow as
- Integral part of the basic financial statements
 Question 13
Entity A, a financial institution, received cash dividends from its investments in marketable securities
during the year. How will the dividends be presented in Entity A’s statement of cash flows?
-
 Question 14
Entity A had the following balances at December 31, 20x1:
Cash in checking account 35,000
Cash in 90-day money market account 75,000

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Treasury bill, purchased 12/1/x0, maturing 5/31/x2 150,000
Treasury bill, purchased 12/1/x1, maturing 2/28/x2 200,000

How much cash and cash equivalents is reported in Entity A’s December 31, 20x1 statement of financial
position?
 Question 15
Which of the following is presented under the investing activities section of a statement of cash flows?
- Purchase of equipment through cash

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