CHAPTER 1 –REVIEW QUESTIONS

Chapter Discussion
1. Explain why accounting practice is as old as civilization

2. What is the significant feature of the Massari Ledgers of Commune of Genoa in 1340?

3. What is the Florantine approach of accounting? What did it contribute in the present
system of bookkeeping?

4. What are the books discussed in the “Summa de Arithmetica” written by Lucca Pacioli in
1494? Explain the significance of each book.

5. What significant developments in the accounting practice have occurred during the
following periods?

a. French Revolution (1700s)

b. Industrial Revolution (1760 -1830)
c. Global Industrial Economy (1900s)
d. International Business Transactions and International Relationships of Government
(2000s)

6. Compare the Florantine approach from the Venetian approach to reporting business
transactions.

7. Compare the Savary Commercial Code from Napoleonic Commercial Code.

8. Discuss the Significant of schmalenbach’s contribution to accounting.

9. How to remedy the conflict of Income Taxation and Financial Accounting reporting?

10. What is the difference of merge from consolidation?

11. What are the benefits of global accounting standards?

12. Why do accounting practices vary among countries?

13. What is the main objective of IASB?

14. What are the functions of FRSC?

15. What agencies regulate the financial reports and professional activities of CPAs?
PROBLEM 1 – 1 TRUE OR FALSE
INSTRUCTION: Write TRUE if the statement is correct or FALSE if it is incorrect.

1. Recording of repetitive exchanges was the start of accounting’

2. The oldest evidence of accounting practice is the “Stone Tablet” of Mesopotamia
which contains commercial transactions.
3. The “Massari Ledgers of Commune of Genoa” is a perfect double-entry form of
journal entries.
4. The double-entry bookkeeping in which debits were written over credits was first
used in Florence.
5. Under Venetian double-entry system, the memorandum book is the record of
original entry.
6. The present ledger posting is the modern adaption of the Venetian accounting
system
7. Napoleon Bonaparte is the father of modern accounting System
8. The industrial revolution introduced the development of accounting theory.
9. Internal control system was introduced during the era of global industrial
economy.
10. Schmalenbach’s advocated that changes in prices do not have relevance in
accounting policies.
11. The Code of Savary defines historical cost as the basis of valuation.
12. The Code of Commerce is a supplement to the Code of Napoleon. it gives
examples that assets must be valued at fair market value.
13. Schmalenbach’s believed that price is the basis of value and control for
investment decisions.
14. Price level accounting is not identical with inflation accounting.
15. Publicly held corporation were introduced during the industrial revolution.