Name: Perales, Kevin Roy B.

Section: BSBA MKT 2-D

Prof: Clarissa R. Reyes
Course: Fundamentals of Accountancy, Business and
Management 2 (FABM2)
Time: Tuesday 7:00 AM-10:00 AM
QUIZ 1: FABM 1 REFRESHER PART I

I. Fill in the blanks.

1. Accounting - Is the process of IDENTIFYING, RECORDING, and

COMMUNICATING economic events of an organization to
interested users.

2. Communicating - Occurs through the preparation and

distribution of financial and other accounting reports.

3. Recording - This involves keeping a chronological diary of

events that are measured in pesos. The diary referred to in the
definition are the journals and ledgers which will be discussed in
future chapters.
4. Identifying - This involves selecting economic events that are
relevant to a particular business transaction. The economic
events of an organization are referred to as transactions.

5. Disclosure Principle - All relevant information should be

included in the financial reports.

6. Conservatism Principle - In case of doubt, assets and income

should not be overstated.

7. Going Concern Principle - Assume that the company will

continue indefinitely.

8. Objectivity Principle - All transactions should be supported by

unbiased evidence.

9. Matching Principle - Expenses should be recorded in the

period when the revenue is generated.

10. Business Entity Principle- Minimal costs incurred should be

recorded as an expense.
11. Monetary Unit Principle - A Philippine company should
report financial statements in pesos.

12. Accrual Accounting Principle - A barber who performs

services for a client should record revenue.

13. Time Period Principle - Statement of Financial position

should be recorded as of December 31, 2015.

14. Cost Principle - A company that purchases furniture should

record it at its acquisition price.

II. Essay (3 pts. each)

15-17. How accounting is important to a business?

*Accounting is very important to all businesses, why? Because
accounting is no doubt where you will base if the business is
doing good or going to bankruptcy, in short it is the simplified
form where you can see if the profit is higher than the expenses.

18-20. How is Accounting Principles important in financial

reporting?
*Accounting Principles is very important in financial reporting
since if this didn’t exist, there will be no records making the
information disorganized and it will be a headache.