QUIZ 1- INTRODUCTION TO ACCOUNTING

1. Which of the following statements regarding accounting is incorrect?

a. All business transactions and events are recorded in the accounting books.
b. Although bookkeeping and accounting are interrelated, they are not the same.
c. The purpose of accounting is to provide information that is useful in making
economic decisions.
d. A transaction or event is recorded in the accounting records only if it has an
effect on the assets, liabilities, equity, income or expenses of the business.

2. Which of the following is not one of the necessary processes performed in

accounting in order to provide information that is useful to interested users?
a. Identifying
b. Summarizing
c. Recording
d. Counting

3. The main purpose of accounting is

a. to account for money so it will not be lost.
b. to provide information that is useful in making economic decisions.
c. to safeguard the assets of a company.
d. to provide a clear view of the state of the industry’s economy

4. Which of the following statements is correct?

a. Financial accounting is the branch of accounting that deals with the specific
needs of an entity’s management.
b. The internal users of accounting information include management, owners and
creditors.
c. The external users of accounting information include potential and existing
investors and lenders and other creditors.
d. Government accounting is the branch of accounting that deals with the analysis
of the costs of products and services.

5. Which of the following statements is incorrect?

a. Erroneous financial statements can lead to bad financial decisions.
b. Internal users of financial information refer to the entity’s management
personnel.
c. Tax accounting refers to the branch of accounting that deals with tax
computations, filing of tax returns, and tax planning.
d. Accounting education is the branch of accounting that deals with the teaching of
accounting and related subjects in order to produce competent and responsible
business professionals.

6. This branch of accounting focuses on catering to the information needs of external

users.
a. Management accounting
b. Financial accounting
c. Auditing

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 d. External accounting

7. It is the process of objectively evaluating evidence and expressing an opinion

regarding the correspondence between management’s assertions and established
criteria.
a. Accounting education
b. Auditing
c. Accounting research
d. Tax accounting

8. Which of the following statements regarding the recording of events is valid?

a. Only non-accountable events are recorded in the accounting books.
b. Only accountable events are recorded in the accounting books.
c. Both non-accountable and accountable events are recorded in the accounting
books.
d. Neither non-accountable nor accountable events are recorded in the accounting
books

9. Statement I: Financial information is information expressed in terms of money.

Statement II: Financial information is always qualitative information.
a. True; False
b. False; True
c. True; True
d. False; False

10. Accounting has been given various definitions, which of the following is not one of
those definitions

a. Accounting is a service activity. Its function is to provide quantitative

information, primarily financial in nature, about economic entities that is
intended to be useful in making economic decisions.
b. Accounting is the art of recording, classifying, and summarizing in a significant
manner and in terms of money, transactions and events which are, in part of at
least, of a financial character and interpreting the results thereof.
c. Accounting is a systematic process of objectively obtaining and evaluating
evidence regarding assertions about economic actions and events to ascertain
the degree of correspondence between these assertions and established criteria
and communicating the results to interested users.
d. Accounting is the process of identifying, measuring, and communicating
economic information to permit informed judgment and decisions by users of
information.

11. The official accounting standard setting body in the Philippines is the
a. Accounting Standards Committee
b. Financial Reporting Standards Council
c. Bureau of Internal Revenue (BIR).
d. Financial Accounting Standards Board (FASB).

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 12. Statement I: A business Transaction is considered an accountable event if it
affects the assets, liabilities, equity, income or expenses of the business
Statement II: General Purpose Financial Statements /Information are the end
product of the financial accounting process. These statements are intended for internal
users

a. True; False
b. False; True
c. True; True
d. False; False

13. Which of the following does not properly described accounting?

a. It is a process by which useful information is generated

b. It is a social science
c. It requires the application of creative skills and judgment
d. It is often referred to as the “language of the soul”

14. Statement I: Bookkeeping is the procedural portion of the accounting process

Statement II: Management accounting is concerned primarily with external
reporting

a. True; False
b. False; True
c. True; True
d. False; False

15. What function do accounting journals serve in the accounting process?

a. Classifying
b. Summarizing
c. Reporting
d. Recording

16. Statement I: Accounting is useful in making economic decisions

Statement II: Accounting demands critical thinking and creative skills

a. Only the statement 1 is correct

b. Only the statement 2 is correct
c. both statements are correct
d. both statements are not correct

17. Accountants hired to render independent opinion regarding the financial

statements

a. General Accounting
b. Public Accounting
c. Private Accounting
d. Government Accounting

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 18. The field of accounting which deals on ensuring adherence to prescribed
management policies is

a. General Accounting
b. Cost Accounting
c. Managerial Accounting
d, Internal Auditing

19. In this phase of accounting, items are sorted and grouped

a. Classifying
b. Recording
c. Interpreting
d. Summarizing

20. The work in Accounting is performed after the work of accountant is completed

a. Bookkeeping
b. Recording
c. Auditing
d. Reporting

21. Which of the following is not an appropriate description of Accounting?

a. Accounting is an information system

b. Accounting is an exact art and science
c. Accounting is the language of business
d. Accounting is a process that leads to understandable information

22. Which of the following is not an external decision maker?

a. Present Shareholder
b. Managers of a Business Entity
c. legislators of the country
d. Trade Creditors

23. This is the branch of accounting that is concerned primarily with the preparation of
general purpose financial statements

a. Managerial Accounting
b. Financial Accounting
c. Cost Accounting
d. Auditing

24.The Communication Phase of Accounting is accomplished by:

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 a. Processing of Data
b. Recording Data
c. Reporting to Decision Makers
d. Storing Data

25. This process refers to the reporting of the information processed in the
accounting system to interested users.

a. Measuring
b. Identifying
c. Communicating
d. Classifying

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