FABM QUIZ # 1 10/13/2020

Fundamentals of Accounting 1

1. It is the art of recording, classifying and summarizing in a significant manner and in terms of
money, transactions and events which are, in part at least, of a financial character, and
interpreting the results thereof.
2. What does GAAP stands for?
3. This concept states that the business is considered distinct and separate from the owner/s of the
business.
4. This concept states that for every transaction, accounting assumes that the value received is equal
to the value given up.
5. The measurement of profit or loss depends on the matching of income earned and expenses
incurred for the period.
6. Under this principle, income is recognized at the time it is earned and expense is recognized
when incurred, regardless of when cash is received and paid.
7. Under this principle, income is recognized when cash is received and expenses are recognized
when cash is paid.
8. This concept assumes that operating life of an enterprise may be conveniently divided into time
periods of equal length (accounting periods).
9. Under this principle, financial information can be qualified and expressed in a uniform means of
measurement.
10. Under this concept, the enterprise is assumed to continue to operate for the foreseeable future.
11. It is a business owned by two or more individuals who contribute money, property, and talent into
a common fund.
12. It is a business organized as a separate legal entity from the owners which can conduct business
in its name and can buy and sell stocks.
13. A form of business which provide services in exchange for fees, rent interest or royalties.
14. A form of business which buys raw materials from suppliers, use skill of workmen and convert
these materials into finished goods and sells to customers.
15. A form of business which purchase goods from suppliers, without altering the state of goods
bought and sell the same at higher price than cost.
16. List down 5 Specialized Field of Accounting (16-20)
17. List down 5 users of accounting information (21-25)
18. List down the 5 elements of Financial Statements (26-30)

WRITE A BR
IEF EXPLANATION WHY ACCOUNTING IS VITAL.