FABM:

LA1:
Which is the last step of accounting as a process of information?
- Preparation of financial statement
Which of the following is a more appropriate definition for Accountancy?
- Accountancy refers to the art of classifying the recorded transactions under their
respective accounts
Accounting deals with quantifiable information
-True
Accounting aims to communicate financial information to investors only.
-False
The basic function of financial accounting is to
-Interpret financial data

SQ1:
Which of the following is not a part of the functions of the accounting system?
-Preparing financial statements that are favorable to the data-users.
Accounting and bookkeeping are synonymous.
- False
Accounting is the language of business.
-true
Which is the last step of accounting as a process of information?
- Preparation of financial statement
Accounting involves communication.
- true
Which of the following is the most appropriate definition for Accountancy?
- Accountancy refers to the art of classifying the recorded transactions under their
respective accounts
Which of the following statement is not correct?
- Being a bookkeeper requires the same kind of training and preparation as that of
being an accountant.
Accounting deals with quantifiable information.
-True
The basic function of financial accounting is to
-Interpret financial data
Which of the following is not true?
- Accounting is useful only to profit-oriented organizations.

LA2:
The area of accounting that relates to providing audit, tax, and consulting services to
clients.
- Public accounting
The area of the accounting profession that deals with providing information to meet
the needs of the internal decision-makers.
- Management Accounting
Refers to the recording, presentation, and analysis of manufacturing costs.
- Cost Accounting
The chief accounting officer of a medium-sized or large business enterprise.
-Controller
This branch involves the preparation of tax returns and the rendering of tax advice to
clients, such as determination and verification of tax consequences, the effect of taxes
in the business operations, tax minimization through legal means, and the like.
-Tax accounting

SQ2:
Sub-area of the accounting profession that deals primarily with providing information
to external data-users, including but not limited to financial statements.
- Financial Accounting
It deals with recording, classifying and summarizing the details of materials, labor and
overhead necessary to produce and sell product or service.
-Cost accounting
A person with knowledge of accounting, who does the routine work of recording,
classifying, and summarizing phases of accounting.
- Bookkeeper
Which of the following statement is not true?
-To be a good accountant, one must have mastery of mathematics.
Public Accounting, as a sub-discipline of accounting, includes:
- Managerial Advisory services
Which of the following is a mechanical aspect of accounting?
-Analyzing the transactions preparatory to the recording process.
Private accounting, as a sub-discipline of accounting, includes:
-Management Accounting
A governmivate accounting, as a sub-discipline of accounting, include
-PRC (Professional Regulation Commission)
A person who is responsible for the formation and molding the mind of competitive
accountants and consultants.
-  Accounting professor
Deals with independent verification and examination of the accounting records for the
purpose of giving an opinion on the fairness of its presentation.
-Auditing

LA3:
Which of the following is not a business transaction?
- Hiring a new employee
The steps in the process of accounting take place in the following order:
-Identifying, measuring, communicating, decision making
The information about a customer that would be of most interest to a suppliers is:
-Ability to pay off debts as they fall due.
The external user of accounting information is the:
-Customer
The information that would be of most interest to an organization's production
manager is:
-Continuity of orders for the factory

SQ3: 8/10
Which of the following is an internal user of the financial data?
- Management
The period covered by the prepared financial statements:
- Cannot be longer than 12 months.
Creditors information needs involve makingall of the following decisions,except:
- Whether or not renew an existing customer's credit line
Which of the following statements is false?
Owner's equity can be bigger than the total assets.
The accounting elements in a balance sheet include:
- Assets, liabilities and equity
Which of the following is not a component of the complete set of financial
statements?
- Supplementary disclosure and explanatory notes
Which financial statement is most useful in assessing the financial flexibility of a
business enterprise?
- Balance Sheet
The financial statements prepared at the end of the period report the following:
- Total cash inflows and outflows during the reporting period.
Which of the following items may appear in a balance sheet?
- Capital, drawing and net income
Which of the following is an internal data-user?
- Company treasurer

LQ1: 27/30
Accounting is the language of business.
- True
A one year reporting period that begins on January 1 ends on December 31 is:
- Calendar year reporting period
Which of the following is more appropriate definition for Accountancy?
- Accountancy refers to the art of classifying the recorded transactions under their
respective accounts
Financial statements are prepared:
- In either monetary or non-monetary terms, depending upon the need of the
decision-maker.
Which is the last step of accounting as a process of information?
- Preparation of financial statement
Which of the following groups use financial accounting?
- All of the answer is correct
The basic function of financial accounting is to
- Interpret financial data
Accounting deals with quantifiable information.
- True
When does an accountant record a transaction?
- On manager's demand
What are the accounting standards issued by the IASB called?
- International Financial Reporting Standards
Which is the last step of accounting as a process of information?
- Preparation of financial statement
The basic purpose of accounting is to:
- Meet an organization's need for accounting information as efficiently as possible.
All of the following are characteristics of managerial accounting, except:
- Information must be developed in conformity with generally accepted accounting
principles or with income tax regulations.
Person who manages all of a firm's accounting activities.
- Controller
The four principal qualitative characteristics of useful financial statements are:
- Understandability, relevance, reliability, comparability
Information is cost effective when:
- The value of the information exceeds the cost of producing it.
The basic function of financial accounting is to
- Interpret financial data
Which financial statement displays the revenues and expenses of a company for a
period of time?
- Income Statement
Information is material if:
- Its omission or misstatement could influence the economic decisions of users taken
on the basis of the financial statements.
Which financial statement is used to show what the firm owns?
- Balance sheet
Accounting aims to communicate financial information to investors only.
- False
Which of the following statements is?incorrect?
- The business enterprise must have ownership over the items reported as business
assets.
The term book keeping and accountancy can be used interchangeably.
- True
Although accounting information is used by a wide variety of external parties,
financial reporting is primarily directed toward the information needs of:
- Investors and creditors
Government agency gives a CPA certificate to an accountant after he passes a series
of rigorous examinations administered by the Board of Accountancy (BOA).
- PRC
Accounting involves communication.
- True
Accounting provides information on
- All of the answer is correct
Probable future sacrifices of economic benefits arising from past transactions are
known as:
- Liabilities
The type of accounting which reports on the performance of the firm to essential
external users.
- External accounting
Financially, shareholders are rewarded by
- Dividends

LA4:
To be a proprietor:
- One must put up a certain capital investment for the purpose of making profit.
The form of business organization that has the largest sales volume is the:
- Corporation
A business ownership capitalization divided into hundreds or thousands of
transferable shares of stock and must have at least five owners or investors.
- Corporation
A business that is owned by one person.
- Sole Proprietorship
A form of business has two or more owners bind themselves to contribute money,
property, or industry into a common fund with the intention of dividing profits among
themselves.
- Partnership

SQ4 8/10
What is the main disadvantage of being a sole proprietorship?
- Unlimited liability (SURE)
A sole proprietorship is taxed only once.
-True
A partnership may be dissolved at any time by action of the partners or by operation
of law.
-True (SURE)
If you want to be your own boss, make your own decisions, and keep all of the profits
to yourself, you want to be__________.
- Sole proprietorship(SURE)
Business profits are taxed as a sole proprietors personal income.
- True
A partnership begins simply by one or more individuals beginning business.
- True
The business income of a partnership is taxed as the personal income of the partners.
- True
Sole proprietors are personally liable for all debts and obligations of their businesses.
- True (SURE)
A corporation can extend its life for a period not exceeding
- 50 years (SURE)
Sole proprietorships terminate upon the death of the proprietor.
- True
LA5;
Mariane wants to buy a building for her business today. Which of the following is the
relevant data for her decision?
- Similar building cost in the previous month
The operating cycle of a service company involves which of the following?
- All of the answer is correct
- Collecting cash payments
A merchandising company that sells goods directly to customers is called
- Manufacturer
-Retailer
Services performed by service companies may include all of the following , EXCEPT:
- Legal advice
Deals with independent verification and examination of the accounting records for the
purpose of giving an opinion on the fairness of its presentation.?
- Auditing