SALARIES AND WAGES IS AN EXPENSE

ACCOUNTS PAYABLE IS AN LIABILITY

PREPAID RENT IS AN ASSET
PROFFESIONAL INCOME IS AN INCOME
PEPPA PIG DRAWING IS AN CAPITAL
INSURANCE EXPENSE IS AN EXPENSE
DEPRECIATION IS AN EXPENSE
NOTES RECEIVABLE IS AN ASSET
MORTGAGE PAYABLE IS AN LIABILITY
SERVICE INCOME IS AN INCOME
TAXES AND LICENSES IS AN EXPSENSE
LAND IS AN ASSET
PETTY CASH FUND IS AN ASSET
WITHHOLDING TASK PAYABLE IS AN
LIABILITY
PEPPA PIG CAPITAL IS AN CAPITAL
GAIN ON SALE ASSETS IS AN INCOME
CASH IN BANK IS AN ASSET
BABD DEBT IS AN EXPENSE
BUILDING IS AN ASSET
UTILITIES PAYABLE IS AN LIABILITY
INTEREST INCOME IS AN INCOME
ACCRUED INTEREST EXPSENSE IS AN
LIABILITY
SUPPLIES ON HAND IS AN ASSET
LOANS PAYABLE IS AN LIABILITY
UNEARNED INCOME IS AN LIABILITY
SSS CONTRIBUTION IS AN EXPENSE
ACCRUED INTEREST INCOME IS AN ASSET
SALARIES PAYABLE IS AN LIABILITY
UTILITIES IS AN EXPENSE
1.Reports the financial condition of the
business as of a given date is
Statement of Financial Position
2.Language of business is
Accounting
3.Economic resources of the entity is
Assets
4.Business operation will continue
indefinitely
Going Concern
5.Accounting period shorter than one year is
Interim Period
6.Expenses are recognized when incurred,
and income when earned is
Accrual Basis
7.Economics cobligations of the entity is
Liabilities
8.One year period starting January 1 and
ending December 31
Calendar Year
9.Excess of revenues over expenses and
losses is
Income
10.Reports the results of operations during a
given period of time
Statement of Comprehensive Income
11.Residual interest of the owner after
deducting all liabilities
Capital
12.Outflow off assets from operations that
decreases owner’s capital
Expenses
13.End-product of accounting process
Financial Statements
14.Owner’s personal use of business assets
Withdrawal
15.Capacity of business to settle short-terms
obligations
Liquidity
The longer the reporting period covered by
the financial reports, the more realible are
the data reported therein; the shorter the
reporting period covered by the financial
reports, the less realible are the data
reported therein.”
TRUE

Service enterprises are classified as non

profit organizations since they 1/1 are
organized primarily for the purpose of
rendering services others.
FALSE

Some of the steps in the accounting cycle are

optional maybe rearranged, depending on
the information needs and skill of the
accountant.”
FALSE

The concept of equality of the value

received and value given up assumes that all
business transactions have-fold effects.\
TRUE

Income statement accounts are considered

reall accounts.
FALSE
Some of the steps in the accounting cycle are
optional or may be rearranged, depending
on the information needs and skill of the
accountant.”
TRUE

Peso values used in recording business

transactions are normally revised 1/1 as a
result of price level changes.”
FALSE

Accountants make sure of generally

accepted account titles and terminologiies in
the financial reports, in order to enhance
the quality of understandibillity.”
TRUE

Under the continuity assumption, it is

assumed that a business will continue to
operate forever.
FALSE

Neutrality exists if the reported financial

data are presented in such a way that they
do not intentionally favor a select group or
group of data users.
FALSE
This represents collectibles from customers
arising from credit sale of goods or services,
not supported by promissory notes.
ACCOUNTS RECEIVABLE

This represents expenses that are paid in

advance but not yet incurred or remain
unexpired at the end of the period.
PREPAID EXPENSE/PREPAYMENT

This represents the income realized for all

types of income derived from services
rendered.
SERVICE INCOME

This represents of services rendered by

workers or employees.
SALARIES AND WAGES/WAGES EXPENSE

This represents the expired portion of the cost

of building, machinery, equipment, store,
equipment, and other types of property, plant
and equipment, except land.
DEPRECIATION EXPENSE
An account title used when products are sold
to customers.
SALES

This represents the amount paid for the fare

of the merchandise bought by the business
from various suppliers.
FREIGHT-IN

A contra asset account which provides for

possible losses from uncollected accounts
receivable.
ALLOWANCE FOR BAD DEBTS

This represents the amount incurred or paid

for the use of light, water, gas for the
business.
UTILITIES EXPENSE

This represents the amount of income tax

withheld from the salaries of employee.
WITHHOLDING TAX

This account title includes, chairs, tables,

counters, display cases, and the liked used in
business.
FURNITURE AND FIXTURES
This refers to an income collected or received
in advance, but is not yet considered earned.
UNEARNED INCOME

This represents the amount of income realized

arising from lending operations.
INTEREST INCOME/INTEREST REVENUE

This represents the amount of paid for the use

of office space, or factory area.
RENT EXPENSE

This represents the amount of goods still

unsold at the end of the accounting period.
MERCHANDISE INVENTORY
Who is the responsible for the preparation
and fair presentation of an entity’s financial
statements in accordance with PFRSs.
MANAGEMENT

Which of the following statements incorrect

regarding the provisions of PAS 1?
PRESENTING AN INCOME STATEMENT OR
STATEMENTOF PROFIT OR LOSS ALONE
WITHOUT A STATEMENT OR OTHER
COMPREHENSIVE INCOME IS ALLOWE.

When separate statement of profit or loss?

(income statement) is presented,
IT SHALL BE DISPLAYED IMMEDIATELY
BEFORE THE STATEMENT PRESENTING
COMPREHENSIVE INCOME.

Theconcept of recognition is applied in

which of the following instances?
AN ENTITY INCLUDES THE EFFECTS OF AN
EVENT IN THE FINANCIAL STATEMENTS
THROUGH A JOURNAL ENTRY.

Which of the following events is no

considered an exhchange or reciprocal
transfer?
PAYMENT TAXES
Which of the following violates the historical
cost concept?
MEASURING INVENTORIES AT NET
REALIZABLE VALUE.

Entity A aquires merchandise inventory.

Entity A initially records the acquisition cost
of the inventoty as asset rather than a
outright expense. When the inventory is
subsequently sold. Entity A recognizes the
cost of the inventory sold as expense. In the
same period the sale revenue is recognized.
This is an application of which of the
following accounting concepts?
MATCHING

On Day 1, a customer buys goods from Entity

A and promises to pay the sale price on Day
30. This is an application of which of the
following accounting concepts?
ACCRUAL BASIS

When resolving accounting problems not

specifically addressed by current standards,
an entity shall be guided by the hierarchy of
financial reporting standards. The correct
sequence of the hierarchy of financial
reporting standardin the Philippines is I.
PASs, PFRs and interpretartions II.
Conceptual Framework III. Judgement IV.
Pronouncement of other standard-setting
bodles.
I,II,III, and IV

Which of the following statement is

incorrect regarding accounting concepts?
UNDER THE COST BENEFIT CONCEPT, THE
COST OF PROCESSING AND
COMMUNICATING INFORMATION SHOULD
EXCEED THE BENEFITS DERIVED FROM IT.

Changes to reporting standards primarily

made in response to.
USER’S NEED

Which of the following enhances the

comparability of information?
CONSISTENT APPLICATION OF ACCOUNTING
POLICIES FROM PERIOD TO PERIOD.

Information has this qualitative

characteristics if different knowledgeable
and independent observers could reach
consensus, although not necessarily
complete agreement, that a particular
despiction is a faithful representation
VERIFIABILITY

Which of the following is not one of the

aspects in the revised definition of an asset?
PROBABILITY OF THE EXPECTED INFLOWS OF
ECONOMIC BENEFIT FROM THE ASSET

Which of the following does not meet the

definition of an asset?
EQUIPMENT THAT THE ENTITY INTENDS,
AND IS VERY CERTAIN, TO ACQUIRE IN THE
FUTURE.

The Conceptual Framework is least

applicable in which of the following cases?
TO ACCOUNT FOP A TRANSACTION THAT IS
SPECIFICALLY DEAL WITH BY A STANDARD

General purpose financial statements are

designed to
MEET MOST OF THE COMMON NEEDS OF
MOST PRIMARY USERS.
These are users of financial informations
who are not in a position to require
reporting entity to prepare reports tailored
to their particular information needs
PRIMARY USERS

Which of the following is not one of the

primary users listed in the Conceptual
Framework?
DEBTORS

Which of the following would least likely to

need general purpose financial statements
in making economic decisions?
MANAGEMENT

Which of the following is not a factor to

consider when applying the qualitative
characteristics?
TO BE USEFUL, INFORMATION NEED ONLY
TO MEET ONE, BUT NOT NECESSARILYALL,
OF THE QUALITATIVE CHARACTERISTICS

This qualitative characteristics is unique in

the sense that it necessarily requires at least
two items.
COMPARABILITY
Which of the following is an example of an
non adjusting event?

Which of the following is an example of an

adjusting event?

These are events that are indicative of

conditions that arose after the reporting
period ,

According to PAS10, non adjusting events

after the reporting period.

Which of the following events after the

reporting period treated as adjusting
events?

According to PAS 10, these are events that

provide evidence of conditions that existed
at the end of the reporting period.

Entity A changes its inventory cost formula

from FIFO to weighted average. How should
Entity A account Entity A account for this
change?
According to PAS 8, a change in accounting
estimate is accounted for

Accooring to PAS 8, in the absence of a PFRS

that specifically deals with a transaction,
management shall

The result of new information or new

developments

Which of the following is a change in

accounting estimate?

A correction of prior period erroe is

accounted for by

Which of the following is included in the

financing activities section of the statement
of cash flows?

In the statement of cash flows of a non

financial institution, interest expense paid is
presented under

Which of the following cash flows is

presented in the operating activities section
of a statement cash flows?
Which of the following is incorrect regarding
the determination of the cost of an
inventory?

Inventories are usually written down to net

realizable value

Write down of inventories to their net

realizable value are recognized

In which of the following. Intances is a write

down of inventories to net realizable value
may not be required?

Which of the following statements is

incorrect regarding the use of cost fomulas?

Entity A’s inventories consis of items that

are ordinarily interchangeable. According to
PAS 2, which of the following cost formulas
shall Entity A use?

Which of the following is not included as

part of the cost of an inventory?
This qualitative characteristics is unique in
the sense that it necessarily requires at least
two items.

Which of the following is not a factor to

consider when applying the qualitative
characteristics?

Which of the following would least likely to

need general purpose financial statements
in making economic decisions?

Which of the following is not one of the

primary users listed in the Conceptual
Works?

Which of the following would least likely to

need general purpose financial statements
in making economic decisions?

These are users of financial information who

are not in a position require a reporting
entity to prepare reports tailored to their
particular Information needs.

General purpose financial statements are

designed to
These are users of financial information who
are not in a position to require a reporting
entity to prepare reports tailored to their
particular information needs

Whiich of the following does not meet the

definition of an asset?

The Conceptual Framework is at least

applicable in which of the following cases?

Which of the following is not one of the

aspects in the revised definition of asset?

Which of the following does not meet the

definition of an asset?

Which of the following enhances the

comparability of aninformation?

Information has this qualitative

characteristics if different, knowledgeable
and independent observes could reach
consensus although necessarily agreement,
that a particular depiction is a faithful
representation.
Which of the following statement is
incorrect regarding according accounting
concepts.

Changes to reporting standard primarily

made in response to

When solving accounting problems not

specificslly addressed by current standards,
en entity shall be guided by the hierarchy of
financial reporting standards. The correct
sequence of the hierarchy of reporting
standards in the Philiippines is 1. PASs,
PFRSs and interpretations 2. Conceptual
Frameworks 3, Judgement 4.
Pronouncement of other standard setting
bodies.

Which of the following statements is

incorrect regarding accounting concepts?

One Day, a customer buys goods from Entity

A and promises to pay the sale price on Day
30. This is an application of which of the
following accounting concepts?

Entity A acquires merchandise inventory.

Entity A initially records the acquisition cost
of the inventory as asset rather than an
outright expense. When the inventory is
aubsequently sold, Entity A recognizes the
cost of the inventory sold as expense, in the
same period the sale revenue recognized.
This is an application of which of the
following accounting concepts?

Which of the following violates the historical

cost concept?

Which of thr following events is not

considered an exchange or reciprocal
transfer?

The concepts of recognition is applied in

which of the following instances?

When separate statement of profit or

loss(income statement) is presented

Which of the following statements is

incorrect regarding the provisions of PAS 1?

Who is the responsible for the preperartion

and fair presentation of an Entity’s financial
statements in accordance with the PFRs?