FUNDAMENTALS OF ACCOUNTING I

Quiz #1

True or False.

1. For reporting purposes, the personal assets and debts of a business owner should be combined
with the assets and debts of the business.
2. A separate legal entity organized in accordance in accordance with codes and laws and in which
ownership is divided into shares of stock is referred to as a corporation.
3. The entity concept states that the transactions of different entities should not be accounted for
together.
4. All members of the accountancy profession are Certified Public Accountants.
5. The personal liability of a partner is limited to the amount of his investment.
6. Most members of the accountancy profession are Certified Public Accountants.
7. Government accounting deals solely with the identification of the sources of resources
consistent with laws.
8. The terms bookkeeping and accounting are synonymous.
9. Accounting is often characterized as the “language of business”.
10. Accounting is a service activity whose function is to provide quantitative information, about
economic entities that is intended to be useful in making economic decisions.
11. A corporation is an economic unit that is legally separate from its owners
12. Manufacturing companies buy raw materials, convert them into products and then sell the
products to other companies or to final consumers.
13. Classification reduces the effects of numerous transactions into useful groups or categories.
14. One characteristic of a corporation is that its owners are personally liable for any losses incurred
by the business.
15. The Philippine accountant considers peso as the common unit of measure for all business
transactions.
16. The set of guidelines and procedures that constitute acceptable accounting practice at a given
time is GAAP, which stands for generally accepted accounting process.
17. A business transaction is the occurrence of an event or of a condition that must be recorded.
18. Summarization reduces the effects of numerous transactions into useful groups or categories.
19. A partnership is a business owned and operated by two or more persons who bind themselves
to contribute money, property or industry to a common fund, with the intention of dividing the
profits among themselves.
20. A corporation is business owned by its stockholders.