PHINMA – University of Pangasinan ACC 102 Fundamentals of Financial

Accounting and Reporting

Series of 2023
NAME: _________________________________________ YEAR/BLOCK: ________________________
STUDENT NUMBER: _____________________________ DATE: _______________________________

Quiz on OVERVIEW OF ACCOUNTING SET A

Part I True or False Write T if the statement is true and X if false. Write your answer in your answer sheet.

1. Accounting is the language of business.

2. Accounting is the art of recording, classifying, summarizing in a significant manner and in terms of money,
transactions and events, which are not in part, at least of financial character and interpreting the results
thereof.
3. All events and transactions of an entity are recognized in the book of accounts.
4. General purpose financial statements are those statements that cater to the common and specific needs of a
wide range of external users.
5. Tax accounting involves the preparation of tax returns and rendering of tax advice.
6. Financial accounting provides information that is used in the other branches of accounting.
7. The entity’s management is responsible for the selection of appropriate accounting policies, not the accountant.
8. One of the differences between a partnership and a corporation is that owners of a partnership have limited
liability.
9. Accounting and bookkeeping are the same thing.
10. Limited liability means the stockholders are not held personally responsible for the financial obligations of the
corporation.
11. Providing managerial advice is within the purview of financial accounting.
12. Management accounting involves the accumulation and communication of information for use by external users.
13. Financial accounting is the branch of accounting that focuses on general purpose financial statements.
14. Cost accounting is the branch of accounting that deals with the examination of financial statements and the
expression of the opinion thereon.
15. Accounting is wider in scope compare to bookkeeping.

Part II Multiple Choice Choose the best answer for each of the following questions and indicate the letter in your
answer sheet. Use CAPITAL LETTERS ONLY.

1. What is the most common form of business organization?

A. Sole Proprietorship C. Corporation
B. Partnership D. Cooperative

2. A major advantage of the corporate form of organization is:

A. reduction of double taxation. C. legal restrictions.
B. limited owner liability. D. ease of organization.

3. It has the highest responsibility and authority in preparing financial reports.

A. Management C. Accountant
B. Auditor D. Government

4. The advantages of a sole proprietorship DO NOT include which of the following?

A. The ability to raise capital is limited.
B. They are less costly to start.
C. In terms of management, they are quite flexible.
D. The income will proceed to the owner solely.

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J. DIMAUNAHAN, CPA, MBA Series of 2023 – ACC 102 Quiz on OVERVIEW OF ACCOUNTING SET A
PHINMA – University of Pangasinan ACC 102 Fundamentals of Financial
Accounting and Reporting
Series of 2023
5. Which of the following about partnership is NOT TRUE?
A. A partnership is composed of two or more partners.
B. A partnership need not be in writing.
C. A partnership has limited liability.
D. A partnership is easier to organize than corporation is.

6. All of the following are considered external events, except

A. Transfer of goods from work-in-process to finished goods inventory.
B. Sale of goods to customers.
C. Transfer of goods from supplier to company’s warehouse.
D. Payment of income taxes to the government.
E. All of the above are external events.

7. Accounting is defined as, except:

A. Process B. Art C. Trading D. Service

8. Banana Hauz buys bananas and converts them into banana chips. The conversion of bananas into banana chips is
a (an)
A. Non-accountable event C. Internal event
B. External event D. Non-reciprocal event

9. What type of users’ needs do general-purpose financial statements cater?

A. Common needs C. Both common and specific needs
B. Specific needs D. Neither common nor specific needs

10. Mr. Gabriel bought 5-storey building to be used for his business. The following information are quantitative
information, except
A. The number of floors. C. The number of rooms.
B. The height of the building in feet. D. The cost of the building

11. Accounting provides which of the following information?

A. Qualitative information C. Financial information
B. Quantitative information D. All of the above

12. The basic purpose of accounting is to

A. Comply with state requirements C. Provide information for decision-
B. Determine the net income of a company making
D. Compute the applicable income tax

13. A type of business organization that produces a product to sell or buys raw materials and converts them into
finished goods to be sold to the public
A. Service Business C. Manufacturing Business
B. Merchandising Business D. None of the Above

14. Which form of business organization has a separate legal entity?

A. Sole Proprietorship C. Corporation
B. Partnership D. All of the above

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J. DIMAUNAHAN, CPA, MBA Series of 2023 – ACC 102 Quiz on OVERVIEW OF ACCOUNTING SET A
PHINMA – University of Pangasinan ACC 102 Fundamentals of Financial
Accounting and Reporting
Series of 2023
15. Which of the following groups is not among the external users for whom financial statements are prepared?
A. Creditors B. Regulators C. Investors D. Managers

16. GAAP means

A. Generally Accounting Accepted Principles C. General Accounting Accepted Principles
B. General Accepted Accounting Principles D. None of the Above

17. Which business form has the advantage of limited liability?

A. Sole Proprietorship C. Corporation
B. Partnership D. All business forms share equal limited liability

18. The following are primary users, EXCEPT:

A. Investors B. Lenders C. Employees D. Owners

19. The technical phase of accounting

A. Interpreting B. Recording C. Summarizing D. Classifying

20. This has to do with the controlling, and determining the cost in producing goods and services
A. Cost accounting C. General accounting
B. Internal auditing D. Budgeting

21. The primary functions of which is include record keeping, preparation of financial statements for use by the
management, owners, creditors, government agencies, and other interest parties
A. Financial accounting C. Cost accounting
B. Managerial accounting D. Auditing

22. The most popular form of business organization today, wherein shares of stock are issued to the person as an
evidence of ownership of the business
A. Partnership C. Corporation
B. Sole proprietorship D. Cooperative

23. Which of the following entities is a going concern?

A. Management intends to liquidate the entity
B. Management intends to cease the entity’s operations.
C. Management has no realistic alternative but to cease the entity’s operations.
D. Management decides to expand operations.

24. Financial statements must be presented at least

A. Annually C. Semiannually
B. Quarterly D. Every two years

25. Separation of duties includes the following, EXCEPT:

A. Authorization C. Custody of Assets
B. Monitoring D. Recording

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J. DIMAUNAHAN, CPA, MBA Series of 2023 – ACC 102 Quiz on OVERVIEW OF ACCOUNTING SET A
PHINMA – University of Pangasinan ACC 102 Fundamentals of Financial
Accounting and Reporting
Series of 2023
Part III: Matching Type Match the first column with the corresponding item in the second column and indicate
the letter in your answer sheet. Use CAPITAL LETTERS ONLY.

1. Requires that a company's financial statements follow the same A. Accounting Entity Concept
accounting principles, methods, practices and procedures from one (4)
accounting period to the next.
2. The assumption that an entity will remain in business for the B. Time Period Principle (6)
foreseeable future.
3. An accounting principle which states that all items that are C. Monetary Unit Assumption
reasonably likely to impact investors’ decision-making must be
recorded or reported in detail in a business’s financial statements using
GAAP standards
4. The principle that financial records are prepared for a distinct unit or D. Historical Cost/ Cost
entity regarded as separate from the individuals that own it. Principle (7)
5. Principle in accounting states that the financial statements a E. Adequate Disclosure/
company produces must be based on solid evidence. Full Disclosure Principle (9)
6. An accounting principle which states that a business should report F. Materiality Principle (3)
their financial statements appropriate to a specific time period.
7. Requires that an asset be reported at its cash or cash equivalent G. Accrual Basis of Accounting
cost at the time of purchase, including any additional expenses (10)
incurred to get the asset in place and prepared for use.
8. It requires that any business expenses incurred must be recorded in H. Consistency (1)
the same period as related revenues.
9. This principle requires the disclosure of appropriate changes in I. Comparability
financial statements that can be useful and not misleading to users.
10. Recognizes business revenue and matching expenses when they J. Going Concern (2)
are generated—not when money actually changes hands.
K. Objectivity (5)
L. Matching Principle (8)

*****END OF QUIZ*****

“People begin to become successful the minute they decide to be.”

– Harvey MacKay

Prepared by:

Prof. JANNY C. DIMAUNAHAN, CPA, MBA

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J. DIMAUNAHAN, CPA, MBA Series of 2023 – ACC 102 Quiz on OVERVIEW OF ACCOUNTING SET A