Department of Education

National Capital Region

SCHOOLS DIVISION OFFICE
CALOOCAN CITY

DIAGNOSTIC TEST IN FUNDAMENTALS OF ACCOUNTANCY AND BUSINESS MNGT. 1

First Semester S.Y. 2022 - 2023
Name: Date:
Strand: Grade & Section: Score:
Direction: Read the following questions carefully and choose the letter of the correct answer. Next to each item number are four bubbles labelled A,
B, C, and D. Select one answer out of the choices given for each item and fill in the corresponding alpha bubble.
1. During the middle ages, it was the primary form of money changing.
A. Trading B. Marco Polo C. Money exchange D. Barter
2. It requires all business transactions and other events are recognized in accounting when they occur, rather than when cash or equivalent is
received or paid.
A. Economic entity assumption C. Going concern assumption
B. Accrual basis assumption D. Monetary unit assumption
3. They plan, organize and run a business.
A. Management B. Employee C. Labor union D. Investor
4. Focus on providing intangible products such as offering professional skills, proposals and expertise.
A. Merchandising business B. Marketing business C. Service business D. Manufacturing business
5. This principle allows an accountant to violate another accounting principle if an amount is insignificant.
A. Full disclosure principle B. Objectivity principle C. Cost principle D. Materiality principle
6. Materials are bought to create new product.
A. Merchandising business B. Marketing business C. Service business D. Manufacturing business
7. They provide the capital to the business, they interested to know the returns on their investments.
A. Employee B. Labor union C. Manager D. Owner
8. Types of partnership that each partner is general partner with unlimited liability.
A. Unlimited partnership C. General partnership
B. Limited partnership D. Liability partnership
9. All assets acquired should be valued and recorded based on the actual cash equivalent or or original cost acquisition. A. Full disclosure
principles C. Cost principle
B. Objectivity principles D. Materiality principle
10. It assumes that all the business transactions are separate from the business owner personal transactions.
A. Economic entity assumption C. Going concern assumption
B. Accrual basis assumption D. Monetary unit assumption
11. This principle states that given two options in the valuation of business transactions, the amount recorded should be lower rather the higher
value.
A. Revenue recognition principles C. Matching principle
B. Cost principles D. Conservation or prudence principle
12. It refers to a business that provides accounting services to other firms.
A. Public accounting C. Government accounting
B. Financial accounting D. Accounting education
13. Types of partnership that has limited liability to the extent only of their capital contributions.
A. Unlimited partnership C. General partnership
B. Limited partnership D. Liability partnership
14. Type of business that owned by two or more individuals.
A. Partnership B. Corporation C. Sole Proprietorship D. Cooperative
15. Which are the three major types of business according to activities?
A. Service business, merchandising business, manufacturing business
B. Service business, marketing business, merchandising business
C. Merchandising business, marketing business, manufacturing business
D. All of the above.
16. A business organization owned by a group of individuals and operated for their mutual benefit.
A. Partnership B. Corporation C. Sole Proprietorship D. Cooperative
17. Accounting records the financial transactions and date after classifying, finalize the result for a definite period for conveying them to their users.
A. Accounting is an art B. Accounting is a process C. Accounting deals with financial Plan
D. Accounting is means and not an end
18. An organization that utilizes resources and information, supplying the wants and needs of customers through goods or services.
A. Marketing B. Business C. Manufacturing D. Merchandising
19. Types of business that required to have 5-15 incorporators.
A. Partnership B. Corporation C. Sole Proprietorship D. Cooperative
20. Accounting finds out the financial results and position of an entity and the same time, it communicates this information to its users.
A. Accounting is an art
B. Accounting is a process
C. Accounting deals with financial data
D. Accounting is means and not an end
21. Materials are bought to create new product.
A. Merchandising business C. Service business
B. Marketing business D. Manufacturing business
22. Concerned with the collection and analysis of financial data strictly within a particular company.
A. Private accountants C. Financial advisers
B. Public accountants D. Auditor
23. He described the double-entry booking in his “Summa de Arethmetica, Geometria, Proportioni et Proportionalita”back in 1494.
A. Lucille Pacioli C. Luca Pacioli
B. Lucy Pacioli D. Lucas Pacioli
24. Accounting is recognized and characterized as a storehouse of information.
A. Accounting is an art
B. Accounting is an information system
C. Accounting deals with financial data
D. Accounting is means and not an end
25. Commonly known as the “buy and sell” business.
A. Merchandising business C. Service business
B. Marketing business D. Manufacturing business
26. In preparation of financial statements, the accountant should include sufficient information to permit the stakeholder to make an informed
judgment about the financial condition of the enterprise.
A. Full disclosure principle C. Cost principle
B. Objectivity principle D. Materiality principle
27. Which of these is not included as a separate item in the basic accounting equation?
A. assets B. revenues C. liabilities D. stakeholder’s equity
28. Types of business that owned by only one individual.
A. Partnership B. Corporation C. Sole Proprietorship D. Cooperative
29. It is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial
information.
A. Financial report B. Management C. Accounting D. Commerce
30. The revenues are recognized as soon as goods have been sold or a service has been recorder, regardless of when the money is received.
A. Revenue recognition principles C. Matching principle
B. Cost principle D. Conservation or prudence principle
31. A process refers to the method of performing any specific job step by step according to the objectives or target.
A. Accounting is an art
B. Accounting is a process
C. Accounting deals with financial data
D. Accounting is means and not an end
32. Quarterly international journal devoted to publishing research-based papers and other information on key aspects.
A. Public accounting C. Government accounting
B. Financial accounting D. Accounting education
33. The accrual basis of accounting records revenues
A. collected C. contracted
B. earned D. readily available for use
34. The life of an economic entity that can be divided into artificial time periods for the purpose of providing periodic statements are prepared at
equal time intervals.
A. Economic basis assumption C. Monetary assumption
B. Going concern assumption D. Time-period assumption
35. This principle requires that expenses be matched with revenues.
A. Revenue recognition principle C. Matching principle
B. Cost principle D. Conservation or prudence principle
36. Which account is not a liability account?
A. debit B. credit C. cash D. all of the above
37. A business entity is assumed to remain in existence for an indeterminate period of time.
A. Economic basis assumption C. Monetary assumption
B. Going concern assumption D. Time-period assumption
38. This principle requires business transactions to have some form of impartial supporting evidence or documentations.
A. Full disclosure principle C. Cost principle
B. Objectivity principle D. Materiality principle
39. Process of recording, analyzing, classifying, communicating and interpreting financial information about government in aggregate and in detail
reflecting transactions and other economic events.
A. Public accounting C. Government accounting
B. Financial accounting D. Accounting education
40. The long-term assets that have no physical existence but are rights have value is known as
A. Current assets B. Fixed assets C. intangible assets D. investments
41. Patents, copyrights and trademarks are
A. Current assets B. Fixed assets C. intangible assets D. investments
42. Economic activities of the Philippine entity are measured and reported in Philippine peso.
A. Economic basis assumption C. Monetary assumption
B. Going concern assumption D. Time-period assumption
43. Art of recording, classifying, summarizing, and finalizing the financial data.
A. Accounting is an art
B. Accounting is a process
C. Accounting deals with financial data
D. Accounting is means and not an end
44. It assumes that all of the business transactions are separate from the business owner personal transactions.
A. Economic entity assumption C. Going concern assumption
B. Accrual basis assumption D. Monetary unit assumption
45. The assets can be converted into cash within a short period (i.e. 1 year or less)are known as
A. Assets B. Fixed assets C. intangible assets D. investments
46. This principle allows an accountant to violate another accounting principle if an amount is insignificant.
A. Full disclosure principle C. Cost principle
B. Objectivity principle D. Materiality principle
47. Asset accounts have what type of balance?
A. debit B. credit C. contra D. all of the above
48. Which account increases equity?
A. expenses B. withdrawals C. treasury stock D. revenues
49. Which financial statement displays the revenues and expenses of a company for a period?
A. income statement C. cash flows statement
B. balance sheet D. statement of stockholder’s equity
50. A contra asset account has what type of balance?
A. Debit B. credit C. contra D. all of the above