Introduction to Accounting

QUIZ 1: TRUE OR FALSE

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

1. Only accountable events are recorded in the accounting books.

2. Accounting is a service activity.

3. Although bookkeeping and accounting are interrelated, they are not the same.

4. The purpose of accounting is to provide information that is useful in making

economic decisions.

5. Accounting is often referred to as the “language of business” because it is

fundamental to the communication of financial information.

6. A transaction or event is recorded in the accounting records only if it has an effect on

the assets, liabilities, equity, income or expenses of the business.

7. Accounting can be traced as far back as the prehistoric times.

8. Bookkeeping normally ends with the preparation of the trial balance.

9. Accounting is as old as civilization and has evolved in response to economic and

social needs of men.

10. Fra Luca Pacioli is the mother of modern accounting.

“Be strong and courageous. Do not fear of be in dread of them, for it is the Lord your God who goes with you.
He will not leave you or forsake you.” (Deuteronomy 31:6)
- END -

1
KEY ANSWERS TO QUIZ 1:

1. True 6. True
2. True 7.True
3. True 8.True
4. True 9.True
5. True 10. False, father
 NAME: Date:
Professor: Section: Score:

QUIZ 2: MULTIPLE CHOICE

Instruction: Choose the letter corresponding to the correct answer for each of the questions
provided below.

1. 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.

2. This process refers to the reporting of the information processed in the accounting system to
interested users.
a. Measuring
b. Identifying
c. Communicating
d. Classifying

3. In accounting, the term “recording” is also called

a. journalizing
b. communicating
c. debiting
d. videoing

4. Which of the following statements regarding the recording of events is valid?

a. Only non-accountable events are recorded in the accounting books
b. Only accountable events are recorded in the accounting books
c. Both non-accountable and accountable events are recorded in the accounting books
d. Neither non-accountable nor accountable events are recorded in the accounting books

5. Statement I: Financial information is information expressed in terms of money.

Statement II: Financial information is always qualitative information.
a. True; False
b. False; True
c. True; True
d. False; False

“The name of the Lord is a strong tower; the righteous run to it and are safe.” (Proverbs 18:10)

- END –

NAME: Date:

3
 Professor: Section: Score:

QUIZ 3: TRUE OR FALSE

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

1. Financial accounting is the branch of accounting that deals with the specific
needs of an entity’s management.
2. The internal users of accounting information include management, owners, and
customers.
3. The external users of accounting information include potential and existing
investors and lenders and other creditors.
4. Government accounting is the branch of accounting that deals with the analysis
of the costs of products and services.
5. Erroneous financial statements can lead to bad financial decisions.
6. External users of financial information refer to the entity’s management
personnel.
7. Cost accounting refers to the branch of accounting that deals with tax
computations, filing of tax returns, and tax planning.
8. Accounting education is the branch of accounting that deals with the teaching of
accounting and related subjects in order to produce competent and responsible
business professionals.
9. Management needs accounting information primarily to assess the ability of the
business to pay dividends.
10. Financial accounting is the branch of accounting that deals with the preparation
of general-purpose financial statements.

“Do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your
requests be made known to God. And the peace of God, which surpasses all understanding, will guard your
hearts and your minds in Christ Jesus.” (Philippians 4:6-7)

- END -
KEY ANSWERS TO QUIZ 3:

1. False, Management accounting

2. True
3. True
4. False, Cost accounting
5. True
6. False
7. False, Tax accounting
8. True
9. False, investors, not management
10. True

5
 NAME: Date:
Professor: Section: Score:

QUIZ 4: MULTIPLE CHOICE

Instruction: Choose the letter corresponding to the correct answer for each of the questions
provided below.

1. This branch of accounting focuses on catering to the information needs of external users.
a. Management accounting
b. Financial accounting
c. Auditing
d. External accounting

2. These users need accounting information in order to regulate businesses that are within the
scope of their legal authority.
a. Employees
b. Creditors
c. Auditors
d. Government regulatory bodies or agencies

3. These users need accounting information in evaluating the stability of the business in so far as
their job security, future remuneration, and career growth and opportunities are concerned.
a. Employees
b. Creditors
c. Auditors
d. Regulatory authorities

4. The following are decisions made by external users except

a. whether to hold or sell investments in stocks.
b. whether or not to extend a loan to the business.
c. whether to sell goods on credit to the business.
d. whether to obtain additional capital from outside creditors or to generate it internally.

5. Which of the following users of financial information is not considered a creditor of the
business?
a. A loan provider, such as a bank
b. A supplier that sells goods to the entity on credit
c. A customer that buys goods from the entity on credit
d. A financing company that provides the entity with machineries on a “rent-to-own” basis

6. It is the branch of accounting that involves the careful analysis of economic events and other
variables to understand their impact on decisions.
a. Accounting education
b. Cost accounting
c. Accounting research
d. Tax accounting
7. It is the process of objectively evaluating evidence and expressing an opinion regarding the
correspondence between management’s assertions and established criteria.
a. Accounting education
b. Auditing
c. Accounting research
d. Tax accounting

8. It refers to the accounting for the government and its instrumentalities, focusing attention
on the custody of public funds, the purpose or purposes to which those funds are
committed, and the responsibility and accountability of the individuals entrusted with those
funds.
a. Accounting education
b. Government accounting
c. Accounting research
d. tax accounting

9. This branch of accounting involves teaching accounting, taxation, and other business-related
subjects.
a. Accounting education
b. Government Accounting
c. Accounting research
d. Tax accounting

10. It involves the provision of information for use by internal users.

a. Management accounting
b. Cost accounting
c. Financial accounting
d. Tax accounting

“For the Lord gives wisdom; from his mouth come knowledge and understanding.” (Proverbs 2:6)

- END -

NAME: Date:

7
 Professor: Section: Score:

QUIZ 5: 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. ____________________

“The heart of the discerning acquires knowledge, for the ears of the wise seek it out.” (Proverbs 18:15)
- END -
KEY ANSWERS TO QUIZ 5:
1. Sole or single proprietorship
2. Partnership
3. Service business
4. Merchandising
5. Corporation
6. Manufacturing
7. Cooperative
8. Sole or single proprietorship
9. Corporation
10. Partnership

9
 NAME: Date:
Professor: Section: Score:

QUIZ 6: 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.
“The fear of the LORD is the beginning of knowledge, but fools despise wisdom and instruction.” (Proverbs
1:7)
- END -
KEY ANSWERS TO QUIZ 6:

1. True 6. False (Service business)

2. False (SEC) 7. True
3. False (SEC only) 8. False
4. False (Merchandising) 9. False (Sole proprietorship)
5. True 10.False (1 vote each irrespective of the number of shareholdings)

11
 NAME: Date:
Professor: Section: Score:

QUIZ 7: MULTIPLE CHOICE

1. Which of the following is most likely an advantage of a corporation over the other types of
business organizations?
a. Shared management responsibility over the owners
b. Ease of formation
c. Greater capital and, hence, better opportunity for growth
d. Limited life

2. It is a form of business organization that provides a greater degree of continuity

a. Cooperative
b. Sole proprietorship
c. Partnership
d. Corporation

3. It is a business organization that is owned by several individuals. It is formed by operation of

law and is registered with the SEC.
a. Cooperative
b. Sole proprietorship
c. Partnership
d. Corporation

4. The liability of a shareholder for corporate debts is limited to the value of his or her
shareholdings because a corporation
a. has a separate legal identity from its shareholders
b. provides liability insurance for its shareholders
c. issues stocks for additional funds
d. can issue dividends to the shareholders when the corporation earns enough profits

5. This type of business organization has the tendency to become monopolistic. It can hamper the
economy by funneling wealth to only few individuals (i.e., the organization’s top owners) and
restricting the redistribution of wealth to the majority of the members of the society.
a. Cooperative
b. Sole proprietorship
c. Partnership
d. Corporation

“The discerning heart seeks knowledge, but the mouth of a fool feeds on folly.” (Proverbs 15:14)
- END -

13