NAME: Date:

Professor: Course: Score:

QUIZ NO. 1
TRUE OR FALSE

Instruction: Before each statement, write TRUE if the statement is correct or FALSE if the statement is
incorrect.

1. A sole proprietorship is registered with the Department of Trade and Industry (DTI)
rather than with the Securities and Exchange Commission (SEC).

2. A corporation is registered with the Cooperative Development Authority (CDA).

3. A partnership business is registered with the Department of Trade and Industry (DTI)
and the Securities and Exchange Commission (SEC).

4. A grocery store is most likely to be considered a service business.

5. Businesses that engage in more than one type of business activity, such as selling goods
and at the same time offering services, are referred to as hybrid businesses.

6. A school is most likely to be considered a manufacturing business – the raw materials are
the students and the finished products are responsible and competent business
professionals.

7. A car dealer, one who buys cars from car producers and sells them in their original state
and without further modifications, is most likely to be considered a trading business
rather than a manufacturing business.

8. A stockholder of a corporation is personally liable for the debts of the corporation.

9. A corporation is the easiest form of business organization to establish because there are
fewer legal requirements compared to the other forms of business organization.

10. You and your friend are members in a cooperative. You hold 1 share while your friend
holds 10,000 shares. During members’ meetings, your friend can cast 10,000 votes while
you can only cast 1 vote.

MULTIPLE CHOICE

1. Under this concept, the business is treated separately from its owners.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle

2. Under this concept, the business is assumed to continue to exist for an indefinite period of time.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
 3. Under this concept, some costs are initially recognized as assets and recognized only as expenses
when the related revenue is recognized.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle

4. Businesses are required by to law to file tax returns with this government agency.
a. Security and Exchange Commission
b. Bureau of Internal Revenue
c. Cooperative Development Authority
d. Bangko Sentral ng Pilipinas

5. The main purpose of accounting is

a. to account for money so it will not be lost.
b. to provide information that is useful in making economic decisions.
c. to safeguard the assets of a company.
d. to provide a clear view of the state of the industry’s economy.

IDENTIFICATION

Instruction: Identify the type of business organization described by the statements provided below.

1. This business is owned by only one individual. ________________________________________

2. This business is owned by two or more individuals who agree to contribute resources and carry out a
business and divide among themselves the profits or losses therefrom. ______________

3. This type of business offers services, such as, professional skills, expertise, advice, lending, and
similar services, as its main product, rather than physical goods. _______________________

4. This business engages in the “buying” and “selling” of goods. Its earnings are primarily derived from
the markup it adds to the cost of the goods it sells to the customers.
____________________________________

5. This business is owned by at least five members who are called stockholders or shareholders.
________________________________________

6. This business engages in buying raw materials and processing them into final
products.______________________________________

7. This organization is owned by at least 15 individuals who are called members. The distinguishing
characteristic of this organization is that its members need to patronize its products.
__________________________

8. In this type of business organization, you are the only boss, and hence, you keep all the profits but
assume all the risk of loss. _____________________________________

9. In this type of business organization, you may be an owner but not the boss. Indeed, your “say” in
the business may be insignificant if you have insignificant shareholdings. _________________

10. In this type of business organization, you are automatically one of the bosses, but not the only one.
This type of business organization is relatively easier to form as compared to the other business
organizations that are owned by more than one individual. ____________________