Chapter 2

Branches of Accounting and Users of Accounting

Information
NAME: Danica B. Dimaculangan Date: 01-26-21
Professor: Ms. Dalia R. Silva Section: ABM 11 Score:

QUIZ 1: TRUE OR FALSE

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

FALSE 1. Financial accounting is the branch of accounting that deals with the specific
needs of an entity’s management.
TRUE 2. The internal users of accounting information include management, owners, and
customers.
TRUE 3. The external users of accounting information include potential and existing
investors and lenders and other creditors.
FALSE 4. Government accounting is the branch of accounting that deals with the analysis
of the costs of products and services.
TRUE 5. Erroneous financial statements can lead to bad financial decisions.
FALSE 6. External users of financial information refer to the entity’s management
personnel.
FALSE 7. Cost accounting refers to the branch of accounting that deals with tax
computations, filing of tax returns, and tax planning.
TRUE 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.
TRUE 9. Management needs accounting information primarily to assess the ability of the
business to pay dividends.
TRUE 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)

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NAME: Danica B. Dimaculangan Date: 01-26-21
Professor: Ms. Dalia R. Silva Section: ABM 11 Score:

QUIZ 2: 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

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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)

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