Fabm 212

FABM 2121
1. Withdrawals are also known as "drawings".

A: True
2. Current assets are obligations expected to be settled after a year.
A: False
3. Entity principle separate business from personal transactions.
A: True
4. A mortgage payable is a noncurrent liability..
A: False
5. Services businesses offer products.
A: False
6. Property, plant, and equipment are not assets.
A: False
7. Accounting is just all about recording.
A: False
8. Report form is where assets are listed on the left side.
A: False
9. Liabilities are company's obligations.
A: True
10. The Statement of Financial Position has two forms.

A: True
11. Property, plant, and equipment are assets.
A: True
12. Any twelve-month period starting from any month other than 01 January
A: Fiscal Year
13. Meaning of GAAP
A: generally accepted accounting principles
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14. Prepaid rent is an asset
A:
15. Land is a current asset..
A:
16. The Calendar year ends on January 01.
A:
17. Long-term liabilities are noncurrent.
A: True
18. Capital is another term for equity.
A: True
19. AICPA means
A: American Institute of Certified Public Accountants
20. Long-term debts are noncurrent.
A: False
21. The Fiscal year always ends in December.
A: False
22. This is the type of business which offers services for a fee
A: Service Business
23. Noncurrent assets are kept principally for trading.
A: False
24. Accounting is the language of business.
A: True
25. Cash and cash equivalents are noncurrent assets..
A: True
26. CPA means Certified Public Accountant.
A: True
Current assets are expected to be used after 12 months.
A: False
The language of business
A: Accounting
Two or more people join together to contribute money, property or industry for purposes of
dividing the profits (or loss) among themselves.
A: Partnership
Capital are claims by creditors against the company's assets.
A: False
Increase in assets is recorded as a Debit..
A: True
Also known as Time Period Concept
A: Periodicity
Branch of accounting solely for government purposes such as collecting of taxes, computing of
national income, fixing the gross national product target, ascertaining the balance of payments
position, etc..
A: Government Accounting
The law that manages Corporations
A: Corporate code
The Statement of Financial Position is commonly prepared at the year ended December 31..
A: False
There are common account titles between assets and liabilities..
A: True
Rent Expense, Wages Expense and Utilities Expense are nominal accounts.
A:
What type of accounts are Interest Receivable and Fees Receivable?
A:
Capital is equal to Asset minus Liability. Asset is equal to Liability minus Capital.
A:
Accounting is defined in part as the art of ____________, ___________, and ____________ in a
significant manner and in terms of money, transactions and events.
A:
Cash, building, and office supplies are examples of assets.
A:
Capital is another term for equity.
A:
This concept states that the activities of a business are recorded separately from the activities of
the stakeholders.
A:
In this concept, accounts assume that the business will continue operating at a foreseeable
future.
A: going concern concept
The income statement summarizes the profitability of the business over a specified period of
time.
A: True
All of the following are included in the heading of an income statement except:
A:
If revenue increases and cost of goods sold remains constant, gross profit also increases.
A: True
This is arrived at when the revenues and gains are greater than the expenses and losses,
indicating successful business operations during the period.
A: Net Income
The financial statement that reports the revenues and expenses for a period of time such as a
year or a month is the ___________.
A:
Prepaid rent is an asset..
A: True
Refers to the outflows of resources usually paid in cash or incurred on credit resulting from the
main operating activities of the business.
A: Expenses
This form of business organization has limited liability, meaning creditors cannot go after their
personal property in case of bankruptcy.
A; Corporation
A business organization where two or more persons join together to contribute money,
property or industry for purposes of dividing the profits (or loss) among themselves.
A: Partnership
Residual asset is the result of combining liabilities and equity.
A: False
Income from the sale of an equipment of a machine business is considered a gain.
A: False
Expense is one of the elements of the Statement of Financial Position.
A: False
As compared to the corporation, single proprietorship is easier to form because of its simplicity
in operation.
A; True
An asset is a present obligation arising out of past events.
A: False
Liabilities are present obligations arising from past events..
A: True
Income statement is another term for the Statement of Financial Position.
A: False
Credits always reduce account balances.
A: False
Losses from trading investments of a law firm are not considered expenses.
A: True
The accounts in the report form of SFP are arranged in a single column wherein assets are listed
first, followed by the liabilities and owner's equity..
A: True
Type of business activities that generates profit from the conversion of raw materials to finished
products for sale.
A: Manufacturing
Transactions which are financial in nature, such as payment and purchases in cash.
A:
Accounting records and statements are based on the most reliable data available so that they
will be as accurate and as useful as possible.
A:
The following are known as Balance Sheet accounts except:
A:
A cash withdrawal was made by the owner from the business for personal use.
A:
Every time a business transaction occurs like purchase of supplies, payment of receivables,
granting credit, payment of utilities, etc., we assume that for every value received there is an
equivalent value parted with.
A:
Which of the following is a current liability?
A:
Debit entries with a larger number would always possess a debit balance.
A: True
This principle has two aspects, the quantifiability and stability of peso.
A: Stable monetary unit
Cash and cash equivalents are current assets.
A: True
Which of the following will cause owner's equity to decrease?
A: Net Loss
Sole proprietorships mostly managed by their owners.
A: False
Revenues are also known as income.
A:
The difference between net sales and the cost of goods sold.
A:
Single proprietorship is concerned with the manufacture of goods into finished product.
A: False
Withdrawals decrease equity.
A: True
Accrual basis of accounting recognizes income regardless of when cash is received.
A: True
Which of the following names is NOT associated with the income statement?
A: Statement of Financial Position
Gains increase the income of the business.
A: True
Merchandising business are charging fees for rendered services.
A: False
Accounting is the system of measuring business activities of financial character.
A:
SFP is also the Balance sheet.
A:
Businesses usually have three activities: investing, financing, and recording.
A;
Examples of real accounts are revenues, expenses, and drawing accounts.
A:
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FABM 2121

1. Withdrawals are also known as "drawings".

10. The Statement of Financial Position has two forms.

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