1. Which of the following invests funds into a business and is considered an owner?

o Creditors
o Lenders
o Stockholders
o Bankers

2. Which of the following accounting processes comes ahead of the others?

o Communicating
o Identifying
o Measuring
o Interpreting

3. You are a CPA and employed as an accountant. Your boss asks you to overstate the merchandise
inventory and accounts receivable of the financial reports to be used for loan purposes. However, you
refuse to follow his instruction, knowing that doing it would jeopardize what ethical standard?

o Compliance with Technical Standards

o Due Care
o Professional Behavior
o Integrity

4. Which of the following can a business provide?

o Services
o None of the above
o Products
o Both a and b

5. It is a business that combines raw materials, labor, and factory overhead into the production of products.

o Merchandising
o Service
o Manufacturing
o Partnership

6.

o Neither statement I nor II is true.

o Only statement I is true.
o Both statements I and II are true.
o Only statement II is true.

7.

o Both statements I and II are true.

o Only statement I is true.
o Only statement II is true.
o Neither statement I nor II is true.

8.

o Sole proprietorships, partnerships, and corporations

o Wholesaler, manufacturer, and retailer
o Financing, investing, and operating
o Government, cooperatives, and philanthropic organizations

9.

o President of the company

o Salesman of the company
o External auditor
o CEO of the company

10.

o Management
o The internal auditors
o The Board of Directors
o The external auditor

11.

o managers
o Marites and Co.
o creditors
o employees

12.

o Government
o Creditors
o Board of Directors
o Suppliers

13.

o the need for conservatism

o reporting on management's stewardship
o international financial reporting standards
o the needs of the users of the information

14.

o Integrity
o Objectivity
o Due Care
o Competence

15.

o Only statement I is true.

o Both statements I and II are true.
o Neither statement I nor II is true.
o Only statement II is true.
16.

o Both statements I and II are true.

o Neither statement I nor II is true.
o Only statement II is true.
o Only statement I is true.

17.

o Neither statement I nor II is true.

o Only statement I is true.
o Only statement II is true.
o Both statements I and II are true

18.

o Only statement II is true.

o Neither statement I nor II is true.
o Both statements I and II are true.
o Only statement I is true.

19.

o You have the right to a portion of the company’s revenues each accounting period.
o You have the right to receive interest on an annual basis.
o You have a claim to the assets of the business
o You are an owner of the retained earnings and capital stock of the company.

20.

o Emperor Wang Mang

o Eugen Schmalenbach
o Luca Pacioli
o Jacques Savary

21.

o None of the above

o Merchandising
o Service
o Manufacturing

22.

o American Institute of Certified Public Accountants

o Philippine Institute of Certified Public Accountants
o American Accounting Association
o Accounting Standards Council

23.

o Statements I and II are true. (Professional Regulation Commission)

o Only statement II is true.
o Only statement I is true.
o Statements II and III are true.
o All statements are true.

24.

o Summarizing
o Recording
o Counting
o Identifying

25.

o Sole Proprietorship
o Corporation
o Cooperative
o Partnership
26.

o increase the selling price of its product/service

o none of these
o earn profit
o make name in the community

27.

o All of the choices are correct.

o Accounting is as old as civilization and has evolved in response to economic and social needs of
men.
o Accounting can be traced as far back as the prehistoric times.
o Fra Luca Pacioli is the mama of modern accounting.

28.

o Journal Book
o Memorandum Book
o Ledger Book
o Investor's Record Book

29.
o Both statements I and II are true.
o Only statement I is true. (two or more --- partnership)
o Only statement II is true.
o Neither statement I nor II is true.

30.

o Only statement I is true.

o Neither statement I nor II is true.
o Only statement II is true.
o Both statements I and II are true.

31.

o Generally Accepted Accounting Principles

o Code of Ethics
o Generally Accepted Interpretations and Standards
o International Financial Reporting System

32.

o Civil Code of the Philippines

o The Philippines Partnership Law
o Revised Partnership Code of the Philippines
o Partnership Governing Standards

33.

o Association of Certified Public Accountants in Education

o Securities and Exchange Commission
o Philippine Institute of Certified Public Accountants
o Board of Accountancy

34.

o Sole Proprietorship
o Cooperative
o Corporation
o Partnership

35.

o 1400s
o 1200s
o 1100s
o 1300s

36.
 o Only statement I is true.
o Neither statement I nor II is true.
o Both statements I and II are true.
o Only statement II is true.

37.

o Only statement II is true.

o Both statements I and II are true.
o Neither statement I nor II is true.
o Only statement I is true.

38.

o Measuring
o Recording
o Communicating
o Identifying

39.

o Only statement II is true.

o Both statements I and II are true.
o Neither statement I nor II is true.
o Only statement I is true.

40.

o Limited ability to raise capital; unlimited personal liability of owners (Ability to raise capital is for
corporation)
o Ability to raise large amounts of capital; limited personal liability of owners
o Ability to raise large capital; unlimited personal liability of owners
o Limited ability to raise capital; limited personal liability of owners

41.

o None of the above

o Quantitative information and qualitative information
o Quantitative information
o Qualitative information

42.

Republic Act 9892

Republic Act 8424
The Philippine Accountancy Act of 2004
Republic Act 3105

43.

o Manufacturing
o Merchandising
o Service
o Hybrid

44.

o The Board of Directors

o The internal auditors
o Management
o The external auditor

45.

o Investors
o Management
o Creditors
o Government and its agencies

46.

o Both statements I and II are true.

Statement 1: Integrity
Statement 2: promulgated by BOA
o Only statement I is true.
o Neither statement I nor II is true.
o Only statement II is true.

47.

o PFRS
o IFRS
o IAS
o PAS

48.

o Both statements I and II are true.

o Only statement I is true.
o Only statement II is true.
o Neither statement I nor II is true.

49.
o Auditing
o Management accounting
o Bookkeeping
o Financial accounting

50.

o Only statement II is true.

o Only statement I is true.
o Both statements I and II are true.
o Neither statement I nor II is true.

51.

o madz/padz
o partners
o members
o stakeholders

52.

o 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.
o All business transactions and events are recorded in the accounting books.
o Although bookkeeping and accounting are interrelated, they are not the same.
o The purpose of accounting is to provide information that is useful in making economic decisions.

53.

o Department of Trade and Industry

o Securities and Exchange Commission
o Commission on Population
o Cooperative Development Authority

54.

o Only statement I is true.

o Neither statement I nor II is true.
o Both statements I and II are true.
o Only statement II is true.

55.

o Sole Proprietorship
o Corporation
o Any of the above
o Partnership

56.
o Neither statement I nor II is true.
o Only statement II is true.
o Only statement I is true.
o Both statements I and II are true .

57.

o Both statements I and II are true.

o Only statement I is true.
o Only statement II is true.
o Neither statement I nor II is true.

58.

o Monetary information
o Qualitative information
o Quantitative information
o Financial information

59.

o Only statement I is true.

o Both statements I and II are true.
o Neither statement I nor II is true.
o Only statement II is true.

60.

o to provide information that is useful in making economic decisions.

o to provide a clear view of the state of the industry's economy.
o to account for money so it will not be lost.
o to safeguard the assets of a company.

61.

o Marla Boutique’s management is deciding whether to wash its vans today or tomorrow.
o Marla Boutique Corp. is attempting to sell its stock to the public.
o The labor union representing Lawn Doctor’s employees is negotiating a pay raise as part of a new
labor agreement.
o The Local Bank is reviewing the loan application from Marla Boutique Corp.

62.
o Neither statement I nor II is true.
o Both statements I and II are true.
o Only statement I is true.
o Only statement II is true.

63.

o Both statements I and II are true.

o Only statement I is true.
o Only statement II is true. (founding members shall not be less than 15)
o Neither statement I nor II is true.

64.

o Neither statement I nor II is true.

o Only statement II is true.
o Only statement I is true.
o Both statements I and II are true.

65.

o Professional Behavior
o Integrity
o Competence
o Due Care

66.

o Neither statement I nor II is true.

o Both statements I and II are true.
o Only statement I is true.
o Only statement II is true.

67.

o Accounting is the language of business because it is fundamental to the communication of financial

information.
o Accounting is a perfect science and a practical art.
o Accounting is an information system that collect, process, store, and distribute information.
o Accounting is a process and a service activity

68.
o None of the above
o Bookkeeping is recording all the business transaction and owner’s own transaction
o Bookkeeping and accounting are one and the same since the bookkeeping function is included in the
accounting process
o Bookkeeping deals with record-keeping and is only one aspect of accounting

69.

o Manufacturing
o Service
o Hybrid
o Merchandising

70.

o Corporation
o Any of the above
o Sole Proprietorship
o Partnership

71.

o Recording
o Measuring
o Identifying
o Communicating

72.

o Reputation
o Objectivity
o Competence
o Due Care

73.

o Sole proprietorship and partnership have no similarities.

o Both businesses are taxed on their earnings.
o Owners may withdraw resources at will.
o Owners have limited life, but the business is assumed to have an indefinite life.

74.

o Only statement II is true.

o Only statement I is true.
o Neither statement I nor II is true.
o Both statements I and II are true.

75.
 o Accounting is helpful
o Accounting is a process
o Accounting is a service activity
o Accounting is an art

76.

o Both statements I and II are true.

o Only statement I is true.
o Only statement II is true.
o Neither statement I nor II is true.

77.

o right of continuity
o right of existence
o right of succession
o right of perpetuity

78.

o Only statement I is true.

o Neither statement I nor II is true.
o Both statements I and II are true.
o Only statement II is true.

79.

o Records business activities

o Helps user make better decisions
o Communicates business activities
o Identifies business activities
o All of the above

80.

o Neither statement I nor II is true.

o Only statement I is true.
o Both statements I and II are true.
o Only statement II is true.

IDENTIFICATION A
a Sole Proprietorship
b Partnership
c Corporation
d Sole Proprietorship or Partnership
e Partnership or Corporation
f. All Forms of Business Organizations

81. Unlimited Liability d

82. Owner has total control --- a
83. Greater government regulation --- c
84. Greater tax burden --- e (corporation)
85. Limited liability --- c
86. Timely and costly to form --- c
87. Unlimited life --- c
88. Difficulty of transferring ownership --- b (sole or partnership)
89. Easy and inexpensive to establish --- d (sole)
90. Greater business continuity --- c
IDENTIFICATION B

a Financial Accounting
b Managerial Accounting
c Cost Accounting
d Auditing
e Taxation
f Government Accounting

91. Michelle currently owns a grocery store and would like to know how much has already been earned
by her investment. --- b (Financial reporting)
92. Brendy is a musician working in a bar. He was complaining about the salary and withholding tax that
was deducted from his salary. --- e
93. Rizaldy was very optimistic about his business, a gas station. Receiving information from his supplier
about the forecasted cost, demand and suggested retail price of gasoline, he wants to know how much
he could earn in the coming year. --- b
94. Rod would like to know how his business is faring with other businesses in the industry; however, his
capitalization is pretty small compared with the other businesses. --- b
95. Cathy owns a canteen and wants to know the total cost of her famous specialty crispy pata. --- c
96. Aurora just got her retirement pay from her former employer. A certain amount was deducted from
the gross amount. She was only 45 years old, and she wants to know what the deduction is for. --- e
97. Jeffrey is a restaurant manager and was asked by the restaurant owner as to how much was the total
sales of the business for the past two years. --- b (financial)
98. Michael has set up an antique shop and will be getting some of his merchandise from other countries;
he would like to know how much would be his custom duties. -e
99. Dave received a Letter of Assessment (LOA) from the BIR; he does not know how to answer such
letter. --- e
100.Carina wants to know how much will it cost in organizing a vacation trip for her family and friends.
--- c