Financial Accounting and Reporting

MIDTERM PERIOD QUIZ #1

Part I
Direction:

If both statements are true, write ME. If both statements are false, write YOU.
If statement 1 is true and statement 2 is false, write OURS. If statement 1 is false
and statement 2 is true, write US. (2 pts. each)
Part I (1)
● The Republic Act No. 9288, known as Philippine
Accountancy Act of 2004 was signed into law by President
Gloria Macapagal Arroyo on May 13, 2004.
● A distinguishing mark of the accountancy profession is its
acceptance of the responsibility to act in the client’s interest.
Part I
● The Republic Act No. 9288, known as Philippine Accountancy Act of 2004 was
signed into law by President Gloria Macapagal Arroyo on May 13, 2004.

● A distinguishing mark of the accountancy profession is its acceptance of the

responsibility to act in the client’s interest.

YOU
Part I (2)
●A restaurant is an example of a
manufacturing type of business.
● Previously, there are 7 subjects in
the CPA Board Exam; now there’s
six.
Part I
● A restaurant is an example of a manufacturing
type of business.
● Previously, there are 7 subjects in the CPA
Board Exam; now there’s six.
US
Part I (3)
● Adequate disclosure does not mean
disclosure of just any data.
● If an entity has a cash of P500, 000 and
reports only P100, 000, this is an
application of prudence.
Part I (3)
● Adequate disclosure does not mean disclosure
of just any data.
● If an entity has a cash of P500, 000 and
reports only P100, 000, this is an application
of prudence.
OURS
Part I (4)
● Consistency means that no change in
accounting method can be made over the
entire life of the entity.
● The hiring of a new company president is
not an economic event.
Part I (4)
● Consistency means that no change in
accounting method can be made over the
entire life of the entity.
● The hiring of a new company president is
not an economic event.
US
Part I (5)
Only accountable events are recorded in the
books of accounts.
The primary purpose of accounting is to
provide qualitative financial information.
Part I (5)
Only accountable events are recorded in the
books of accounts.
The primary purpose of accounting is to
provide qualitative financial information.
OURS
Part I (6)
● Unearned revenue refers to expenses
already paid but not yet incurred/used.
● Accounts payable refers to the right to
receive cash after rendering the services.
Part I (6)
● Unearned revenue refers to expenses already
paid but not yet incurred/used.
● Accounts payable refers to the right to
receive cash after rendering the services.
YOU
Part I (7)
●The most common attribute used
in measuring financial information
is current cost.
●Materiality is relativity.
Part I (7)
●The most common attribute used
in measuring financial information
is current cost.
●Materiality is relativity.
US
Part I (8)
● The receipt of advance payment for services to be
rendered in the near future can be recorded in the
miscellaneous income account.
● Rounding off of amounts is acceptable only when
preparing financial reports. The accountant does not
omit amounts (even centavos) when recording in the
books of accounts.
Part I (8)
● The receipt of advance payment for services to be rendered in the near future can
be recorded in the miscellaneous income account.
● Rounding off of amounts is acceptable only when preparing financial reports. The
accountant does not omit amounts (even centavos) when recording in the books of
accounts.

US
Part I (9)
● A bank is considered as a manufacturing
business.
● Accounting is considered as the language
of the business because it is essential in
the communication of financial
information.
Part I (9)
● A bank is considered as a manufacturing business.
● Accounting is considered as the language of the
business because it is essential in the communication
of financial information.
US
Part I (10)
●A partnership must have more than
one owner.
●Business transactions are initially
recorded at scrap paper.
Part I (10)
●A partnership must have more than
one owner.
●Business transactions are initially
recorded at scrap paper.
Part I (11)
● A manufacturing business is one that buys
finished products and processes them into raw
materials.
● Production refers to any sudden and
anticipated loss ordinarily termed as act of
God.
Part I (11)
● A manufacturing business is one that buys
finished products and processes them into raw
materials.
● Production refers to any sudden and
anticipated loss ordinarily termed as act of
God.
YOU
Part I (12)
Accounting concepts and principles, in the basic sense,
are guidelines that accountants follow when recording
and communicating economic information.
The application of the separate entity concept is
necessary so that the financial position and
performance of a business can be measured objectively.
Part I (12)
Accounting concepts and principles, in the basic sense, are
guidelines that accountants follow when recording and
communicating economic information.
The application of the separate entity concept is necessary so
that the financial position and performance of a business can be
measured objectively.

ME
Part I (13)
• The opposite of going concern is coming concern.

• According to the accrual basis of accounting, a

business should record a sale only when the sale
price is collected.
Part I (13)
• The opposite of going concern is coming concern.

• According to the accrual basis of accounting, a

business should record a sale only when the sale
price is collected.

• YOU
Part I (14)
Financial statements are prepared at least annually
because of the matching concept.

A reporting or accounting period that starts on June 1

of the current year and ends on July 31 of the same
year is called a calendar year period.
Part I (14)
Financial statements are prepared at least annually
because of the matching concept.

A reporting or accounting period that starts on January

1 of the current year and ends on July 31 of the same
year is called a calendar year period.
Part I (15)
The government ordered the shutting down of Entity A
factories because of noncompliance with regulations.
Entity A is a going concern.

According to the materiality concept, an item that is

considered material by one business is considered
material by all other business.
Part I (15)
The government ordered the shutting down of Entity A
factories because of noncompliance with regulations.
Entity A is a going concern.

According to the materiality concept, an item that is

considered material by one business is considered
material by all other business.
YOU