1 - The Accountancy Profession

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1. a. Accounting is a service activity and its function is to 7. b. What is the "measuring" component in the definition of
provide quantitative information, primarily financial in accounting?
nature, about economic entities, that is intended to be
useful in making economic decisions. This accounting a. The recognition or nonrecognition of business activities
definition is given by as accountable events.
b.The assigning of peso amounts to the accountable
a. Accounting Standards Council events.
b. AICPA Committee on Accounting Technology c. The preparation and distribution of accounting reports
c. American Accounting Association to users of accounting information.
d. Board of Accountancy d. The preparation of audit reports by CPAs.
2. d. All of the following describe accounting, except 8. a. The most common financial attribute used in measuring
financial information is
a. A service activity
b. An information system a. Historical cost
c. A universal language of business b. Current cost
d. An exact science rather than an art c. Realizable value
d. Present value
3. b. The important points made in the definition of accounting
include all of the following, except 9. d. The "communicating" process of accounting includes all
of the following, except
a. Accounting information is quantitative.
b. Accounting information is both quantitative and a. Recording
qualitative. b. Classifying
c. Accounting information is financial in nature. c. Summarizing
d. Accounting information is useful in decision making. d. Interpreting
4. a. The accounting process is the recognition or 10. d. What is the overall objective of accounting?
nonrecognition of business activities as accountable
events. a. To provide the information that the managers of an
economic entity need to control the operations.
a. Identifying b. To provide information that the creditors can use in
b. Measuring deciding whether to grant loans to an entity.
c. Communicating c. To measure the periodic income of the economic entity.
d. Reporting d. To provide quantitative information about an entity that
is useful in making economic decisions.
5. b. The events that affect the entity and in which other entities
participate are known as 11. a. It is the body authorized by law to promulgate rules and
regulations affecting the practice of accountancy
a. Internal events profession in the Philippines.
b. External events
c. Current events a. Board of Accountancy
d. Obligating events b. Philippine Institute of Certified Public Accountants
c. Securities and Exchange Commission
6. d. Which of the following statements is incorrect in relation
d. Financial Reporting Standards Council
to accountable event?
12. a. What is the law promulgating the practice of accountancy
a. An event is accountable when it has an effect on asset, profession in the Philippines?
liability or equity.
b. The subject matter of accounting is the measurement of a. RA No. 9298
economic resources and obligations. b. RA No. 9198
c. Only economic activities are emphasized and c. RA No. 9928
recognized in accounting. d. RA No. 9892
d. Sociological and psychological matters are
quantifiable.
13. d. What are the three main areas in the
practice of the accountancy profession?
a. Public, private, managerial
b. Auditing, taxation, managerial
c. Financial, managerial, corporate
d. Public, private, government
14. c. Which of the following statements is
incorrect in relation to the practice of
public accountancy?
a. Single practitioners for the practice of
public accountancy shall be registered
CPAs in the Philippines.
b. Partners of partnerships formed for the
practice of accountancy shall be
registered CPAs in the Philippines.
c. The Securities and Exchange
Commission can register any corporation
organized for the practice of public
accountancy.
d. The PRC upon favorable
recommendation of BOA shall issue
certificate of of accreditation to CPAs in
public practice provided the registrant has
acquired a minimum of 3 yrs of
meaningful experience in public practice.
15. c. (also called The singularly unique function performed
Auditing; by independent CPAs is
auditors' opinion
can be: a. Tax preparation
qualified, b. Management advisory services
nonqualified, or c. The attest function
disclaimer) d. The preparation of financial statements
16. b. Accountants employed in entities in
various capacity as accounting staff, chief
accountant or controller are said to be
engaged in
a. Public accounting
b. Private accounting
c. Government accounting
d. Financial accounting
17. d. It is the area of accountancy profession that
encompassed the process of analyzing, classifying,
summarizing and communicating all transactions
involving the receipt and disposition of government funds
and property and interpreting the results thereof.
a. Internal auditing
b. External auditing
c. Private accounting
d. Government accounting
18. c. The Continuing Professional Development is required for
a. Renewal of CPA license
b. Accreditation to practice accountancy
c. Both a and b
d. Neither a and b
19. c. How many CPD credit units or CPD credit hours are
required?
a. 60 credit units each year for three years
b. 20 credit units each year for three years
c. 60 credit units for three years which may be earned in
any of the three years
d. 15 units each year for three years
20. b. Who is permanently exempted from the CPD requirement
for the renewal of CPA license?
a. A 60-year old CPA
b. A 65-year old CPA
c. A CPA practicing for the profession abroad during the
period of stay
d. A CPA studying abroad during the period of stay
21. d. It is the standard-setting body in the Philippines at the
present time.
a. ASC
b. Auditing and Assurance Standards Council
c. Philippine Accounting Standards Board
d. Financial Reporting Standards Council
22. d. Which of the following statements is true regarding the
FRSC?
a. The FRSC is created by PRC upon recommendation of
BOA to asist BOA in carrying out its powers and
functions under RA No. 9298
b. The FRSC shall be composed of 15 with a Chairman
and 14 representatives.
c. The Chairman and members of FRSC are appointed by
PRC upon recommendation of BOA and shall have a
term of 3 yrs renewable for another term.
d. All of the statements are true.
23. d. All of the following are represented in FRSC, except 30. d. IFRIC Interpretations issued by IASB

a. BOA a. are considered authoritative and must be followed.

b. SEC b. cover newly identified financial reporting issued not
c. COA specifically addressed.
d. DBM c. cover issued where unsatisfactory or conflicting
interpretations have developed.
24. d. The PFRS collectively include
d. All of these
a. PFRS corresponding to IFRS 31. a. Financial accounting is concerned with
b. PAS corresponding to IAS
c. Philippine Interpretations corresponding to IFRIC and a. General purpose reports on financial position and
SIC Interpretations and Interpretations developed by PIC financial performance
d. All of these b. Specialized reports for inventory management and
control
25. a It is a global phenomenon intended to bring about
c. Specialized reports for income tax computation and
transparency and a higher degree of comparability in
recognition
financial reporting in order to achieve the goal of one
d. General purpose reports on changes in share prices
uniform and globally accepted financial reporting
and future estimate of market position
standards.
32. c. Financial accounting can be broadly defined as the area
a. IFRS of accounting that prepares
b. Borderless accounting
c. World trade a. General purpose financial statements to be used by
d. Information technology parties internal to the entity
b. Financial statements to be used by investors
26. b. The IASB was formed
c. General purpose financial statements to be used both
by parties internal and external to the entity
a. To enforce IFRS in foreign countries
d. Financial statements to be used primarily by
b. To develop a single set of high quality IFRS
managementt
c. To establish accounting standards for multinational
entities 33. d. Financial accounting is the area of accounting that
d. To develop accounting standards for countries that do emphasized reporting to
not have their own standard-setting bodies.
a. Management
27. c. The IASB publishes standards called
b. Regulatory bodies
c. Internal auditors
a. IAS
d. Creditors and investors
b. FRS
c. IFRS 34. d. Managerial accounting is the area of accounting that
d. Statement of FAS emphasizes
28. b. The IASB employs a due process system which
a. Reporting financial information to external users
b. Reporting to SEC
a. Is an efficient system for collecting dues from
c. Combining accounting knowledge with an expertise in
members
data processing
b. Enables interested partners to express their views on
d. Developing accounting information for use within an
issues under consideration
entity
c. Identifies the accounting issued that are the most
important
d. Requires that all CPAs must receive a copy of IFRS
29. d. What is the due process in the context of standard-setting
by IASB?

a. IASB operates in full view of the public.

b. Public hearings are held on proposed standards.
c. Interested parties can make their views known.
d. All of these.
35. b. A basic feature of financial accounting is 40. c The singularly unique function performed by CPAs is the
attest function which means that CPAs are primarily
a. Direct measurement of economic resources and responsible for
obligations and changes in them in terms of money and
sociological and psychological impact a. Preparing financial statements in conformity of GAAP
b. Direct measurement of economic resources and b. Certifying the accuracy of financial statements
obligations and changes in them in terms of money c. Expressing an opinion as to the fairness of financial
c. Direct measurement of economic resources and statements
obligations and changes in them in terms of money and d. Filing financial statements with the regulatory authority
sociological impact
d. Direct measurement of economic resources and
obligations and changes in them in terms of money and
psychological impact
36. d. Generally accepted accounting principles

a. are accounting principles based on law

b. derive their credibility and authority from legal rulings
and court precedents
c. derive their credibility and authority from the national
government through a regulatory authority
d. derive their credibility and authority from general
recognition and acceptance by the accountancy
profession
37. b. Which of the following statements best describes GAAP?

a. The accounting principles have been formulated in the

public sector.
b. The accounting principles have been developed on the
basis of such factors as usage and practical necessity.
c. The accounting principles are the same as laws within
our legal system.
d. The accounting principles do not apply to small
entities.
38. d. Proper application of accounting principles is most
dependent upon

a. Existence of specific guidelines

b. Oversight of regulatory bodies
c. External audit function
d. Professional judgement of the accountant
39. a. Once an accounting standard has been established

a. The standard is continually reviewed to see if any

modification is necessary.
b. The standards is not reviewed unless the regulatory
authority makes a complaint.
c. The task of reviewing the standard to see if
modification is necessary is given to an accredited
national organization of CPAs.
d. The principle of consistency requires that no revisions
should be made to the standard..