UNIVERSAL COLLEGES OF PARAÑAQUE INC.

8273 Dr. A. Santos Avenue, Sucat, Parañaque City

Tel. No: 8204276/ Telefax: 8298615

FINANCIAL ACCOUNTING AND REPORTING 2

QUIZ

Name:______________________
Course Year:_______________

1. Accounting is
I.A service activity and its function is to provide quantitative information,
primarily financial in nature, about economic entities, that is intended to be useful
in making economic decision.

II. The art of recording, classifying, and summarizing in a significant manner and
in terms of money, transactions and events which are in part at least of a
financial character and interpreting the results thereof.

III. The process of identifying and communicating economic information to permit

informed judgment and decision by users of the information.

a. I, II and III b. I only c. I and II only d. III only

2. In a corporate form of business organization, legal capital is best defined as

a. The amount of capital the state of incorporation allows the company to accumulate
over its existence.

b. The par value of all capital stock issued.

c. The amount of capital the federal government allows a corporation to generate.

d. The total capital raised by a corporation within the limits set by the Securities
and Exchange Commission.

3. A primary source of stockholders' equity is

a. income retained by the corporation.
b. appropriated retained earnings.
c. contributions by stockholders.
d. both income retained by the corporation and contributions by stockholders.

4. Information is neutral if it
a. provides benefits which are at least equal to the costs of its preparation.
b. can be compared with similar information about an enterprise at other points in
time.
c. would have no impact on a decision maker.
d. is free from bias toward a predetermined result.

5. Shares of stock a corporation is allowed to issued over its life.

a.Paid up capital c.Authorized capital stocks

b.Issued share d.Subscribed capital stocks

6.Major disadvantage of corporation:

a.Transferability of interest c.limited liability
b.Availability of capital d.legal requirements
 UNIVERSAL COLLEGES OF PARAÑAQUE INC.
8273 Dr. A. Santos Avenue, Sucat, Parañaque City
Tel. No: 8204276/ Telefax: 8298615

7.Which is an advantage of a shareholder over a partner?

a.Owner cannot directly control business operation
b.Owner can easily transfer his interest
c.Owner’s liability is unlimited
d.B and C

8.To incorporate, the law requires that at least (choose the best answer):
a. A minimum paid up capital is P50,000
b.25% of the authorized should have been subscribed
c.25% of the authorized should have been paid
d.25% of the authorized should have been subscribed and paid.

9.As defined by Corporation Code of the Philippines, Corporation has the attribute
except:
a.judicial entity
b.legal entity
c.artificial entity
d.Limited liability

10.A corporation organized for profit is called a:

a. Non-government corporation
b.Public corporation
c.Stock corporation
d.Non-stock corporation

11. Which of the following is not an objective of financial reporting?

a.To provide information about national resources, the claims to those resources, and
the changes in them.
b.To provide information that is helpful to investors and creditors and other users
in assessing the amounts, timing, and uncertainty of future cash flows.
c.To provide description that is useful to those making investment and credit
decisions.
d.All of these are objectives of financial reporting.

12. Stock that has a fixed per-share amount printed on each stock certificate is
called
a. stated value stock.
b. fixed value stock.
c. uniform value stock.
d. par value stock.

13. Which of the following represents the total number of shares that a corporation
may issue under the terms of its charter?
a. authorized shares
b. issued shares
c. unissued shares
d. outstanding shares
 UNIVERSAL COLLEGES OF PARAÑAQUE INC.
8273 Dr. A. Santos Avenue, Sucat, Parañaque City
Tel. No: 8204276/ Telefax: 8298615

14. In a corporate form of business organization, legal capital is best defined as

a. the amount of capital the state of incorporation allows the company to accumulate
over its existence.
b. the par value of all capital stock issued.
c. the amount of capital the federal government allows a corporation to generate.
d. the total capital raised by a corporation within the limits set by the Securities
and Exchange Commission.

15. Following are considered as books and record of in the principal office of
Corporation based on CCP Sec. 74

a.Minutes of board of directors meeting

b.Books of account
c.Subscription books
d.Minutes of presidents meeting

16. All except one should own at least one share

a.CEO or president of the Company who has a seat as a board of director.

b.A board of director how do not actively participate in the Corporation.
c.The Corporate secretary
d.A Senator who invested cash in Manulife Insurance Phils, Inc.

17. Personnel who is in-charged in making the over-all policy of the Corporation:
a. Incorporators
b. Vice president for operations
c. Board of Directors
d. Corporate legal secretary

18. Corporation which has a restrictive policy in issuing the capital stock in public.

a.Family Corporation
b.Stock Corporation
c.Closed Corporation
d.Quasi Corporation

19. Current assets section include should include:

a. Cash restricted for expansion of the Corporation
b. Inventory available for sale next year.
c. Income tax payable
d. Prepaid expense of another Corporation

20. The objectives of financial reporting include all of the following except to
provide information that
a. is useful to the Internal Revenue Service in allocating the tax burden to the
business community.
b. is useful to those making investment and credit decisions.
c. is helpful in assessing future cash flows.
d. identifies the economic resources (assets), the claims to those resources
(liabilities), and the changes in those resources and claims.

God bless!