Mock Board Reviewer ( Theories )

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1. Adequate Disclosure: this principle requires relevant 18. Recording data: the measurement phase of accounting is
information to form part of financial statements for decision- accomplished by
making purposes. 19. Relevance: it is the capacity of information to make a
2. Completeness: the result of standard of adequate disclosure. difference in decision by helping users evaluate past, present
3. Consistency: when preparing the accounts of a firm, one and future events, or confirming or correcting their past
should normally account for similar items in the same way evaluations.
from one accounting period to the next 20. Relevance: the financial accounting information is directed
4. Consistency: Accounting changes often made and the towards the common needs of users and is independent of
monetary impact as reflected in the financial statements of a presumptions about particular needs and desires of specific
company eventhough, in theory, this may be a violation of the users.
accounting concept of 21. Stable Monetary Unit: accountants do not recognize that the
5. Entity concept: the financial affairs of a firm and its owners are value of peso changes over time. The concept is called the
kept separate for the purpose of preparing accounts. 22. Stable Monetary Unit: the financial statements should be
6. Generally Accepted Accounting Principle: they encompass stated in terms of common financial denominator.
the conventions, rules and procedures necessary to define 23. Substance over form: in the event of conflict between the
what accepted accounting practice is economic substance of a transaction and its legal form, the
7. Going Concern: if the business is not being sold or close the economic substance shall prevail. This concept is known as
amounts reported in the accounts for assets used in the 24. Unit of Measure: Stating assets and liabilities and changes in
business operation are based on cost of the assets. This them in terms of a common financial denominator is a
practice is justified by prerequisite in measuring financial position and periodic net
8. Identifying: when accounting process is the recognition or non- income.
recognition of business activities as accountable events. 25. Verifiability: The principle of objectivity includes the concept
9. Involves an arm's length transaction between two of
independent parties: objectivity is assumed to be achieved
when accounting transaction
10. Matching: not recognizing any expense unless some revenue is
realized.
11. Measurement, processing and communication of financial
information about an identifiable economic entity: is an
appropriate definition of accounting
12. Objective: Proponents of historical cost maintain that in
comparison with all other valuation alternatives for general
purpose financial reporting, statements prepared using
historical cost are more
13. Objectivity: states that an accounting transaction should be
supported by sufficient evidence to allow two or more
qualified individuals to arrive at essentially similar conclusion.
14. Periodicity: involves the dividing the life of a business entity
into accounting periods of equal length thus enabling the
financial users to periodically evaluate the results of business
operation
15. Periodicity: During the lifetime of an entity, accountants
produce financial statements at arbitrary points in time
accordance with which basic accounting concept?
16. Profit-oriented: the conceptual framework of accounting sets
out certain essential characteristic of accounting information.
Which of the following information is not an essential
characteristic
17. Provide quantitative financial information about business
enterprise that is useful in making rational economic
decision: basic purpose of accounting is