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1.

Accounting is the art of recording, classifying and summarizing in a significant
manner and in terms of money, transactions and evnts which are in part atl
least of a financial character and intrerpreting the results thereof. This
accounting definition is given by
a. Accounting Standard Council
b. Board of Directors
c. Board of Accountancy
d. American Accounting Association
2. The body authorized by law to promulgate rules and regulations affecting the
practice of the accountancy profession in the Philippines.
a. IFRIC
b. PAS
c. PFRS
d. BoA
3. Which of the following is not an enhancing qualitative characteristic of
accounting information?
a. Comparability
b. Unity
c. Understandability
d. Timeliness
4. The examination of financial statements by independent certified public
accountant for the purpose of expressing an opinion as to the fairness with
which the financial statements are prepared is called
a. Bookkeeping
b. Auditing
c. Financial Accounting
d. Public Accounting
5. Accounting is conceptual and is concerned with the why, reason or
justification for any action adopted.
Auditing is procedural and largely concerned with development and
maintenance of accounting record and the how of accounting.
a. 1st statement is true. 2nd statement is false.
b. 1st statement is false. 2nd statement is true.
c. Both statement is true.
d. Both statement is false.
6. Residual interest in the assets of the entity after deducting all of its liabilities.
a. Assets
c. Equity
b. Liabilities
d. Income
7. The quality of being honest to the users.
a. Relevance
b. Reliability
c. Faithful Representation
d. Understandability

a. Taxing authority 9. Realization rule b. Monetary Rule d.Requires that revenues are recorded when actually earned. Going Concern d.The primary users of financial information include I. customers. a. Accrual Basis c.One element of the objecive of financial reporting is to provide a. . I only. Existing and potential investors II. User group such as employees. and the public. c. Matching Principle 10. Shareholder in the entity c. Information about the investors in the entity. Information that will attract new investors. II and III 12. b. Historical Cost Rule 11. a. I and III only. Creditors d. d. Information that is useful in assessing cash flow prospects d. Which of the following is an internal user of an entity’s financial information? a. Board of directors b. I and II only.8. Information about the liquidation value of the resources held by the entity c. Matching Rule c. b. Revenue is recognized when received regardless of when earned. governments and their agencies. I. Cash Method b. Existing and potential lenders and other creditors III.