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UNIVERSITY OF CEBU COLLEGE OF ACCOUNTANCY ACCOUTNING 1 NAME______________________________________________________________DATE_____________________SCORE____________ Multiple Choice. Write the letter of the correct answer. Strictly NO ERASURES 1. The basic purpose of accounting is a. To provide information that managers of an economic entity need to control its operation. b. To provide information that the creditors of an economic entity can use in deciding whether to make additional loans to the entity. c. To measure the periodic income of the economic entity. d. To provide quantitative financial information about a business enterprise that is useful to making rational economic decision. 2. Revenue under is generally derived from these activities: a. Selling products, rendering services and permitting others to use enterprise resources. b. Selling products, rendering services and adjustment of revenue of prior periods. c. Selling products, rendering of services and investment by owners. d. All of the above. 3. The consistency concepts states that a. When preparing the accounts of a firm, one should normally account for similar items in the same way from one accounting period to the next. b. Firms in the industry must accounts for similar items in the same way. c. Firms may never change the way in which they prepare their accounts. d. None of the above. 4. Which accounting process is the recognition or non-recognition of business activities as accountable events? a. communicatingc. identifying b. recordingd. measuring 5. The financial statements should be stated in terms of a common financial denominator. a. accrualc. stable monetary unit b. going concernd. time period 6. They encompasses the conventions, rules and procedures necessary to define what is accepted accounting practice. a. accounting assumptionsc. conceptual frameworks b. accounting conceptsd. generally accepted accounting principles 7. Which area of public accounting means the examination of financial statements by a CPA for the purpose of expressing an opinion as to the fairness of the statements? a. management advisory servicesc. external auditing b. internal auditingd. taxation 8. Which of the following best describes the attributes of a partnership? a. Limited liability to raise capital, limited personal liability of owners. b. Ability to raise large capital; unlimited personal liability of owners. c. Limited ability to raise capital; unlimited personal liability of owners. d. Ability to raise large amounts of capital; limited personal liability of owners. 9. Which of the following accounting concepts states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified individuals to arrive at essentially similar conclusions? a. matchingc. periodicity b. objectivityd. stable monetary unit 10. The principle of objectivity includes the concept of a. summarizationc. conservatism b. classificationd. verifiability 11. This principle requires relevant information to form part of financial statements for decision making purposes. a. objectivityc. adequate disclosure b. materialityd. accounting entity 12. Stating assets and liabilities and changes in them in terms of a common financial denominator is a prerequisites in measuring financial position and periodic income. a. unit of measure b. measurement of economic resources and obligations c. exchange price d. accrual 13. It is the capacity of an information to make a difference in decision by helping users evaluate past, present, or future events, or confirming, or correcting their past evaluations. a. understandabilityc. relevance b. comparabilityd. reliability 14. The attributes of relevance include all of the following except a. predictive valuec. feedback value b. neutralityd. materiality Which of the following accounting concepts states that an accounting transaction should be supported by sufficient evidence?One basic principles in accounting states that an accounting transaction has to be supported by sufficient evidence to allow two or more qualified individuals to arrive at essentially similar conclusion is called Objectivity Principle.
Which accounting concepts that financial statements should be stated in terms of a common financial denominator?Stating assets and liabilities and changes in them in terms of a common financial denominator is a prerequisite in measuring financial position and periodic net income.
What is accounting concepts explain the accounting concept?Accounting concepts are the generally accepted rules and assumptions that assist accountants in preparing financial statements. In layman's terms, they are the fundamental building blocks of the transactions of the business.
Which of the following is an accounting concept?: Business Entity, Money Measurement, Going Concern, Accounting Period, Cost Concept, Duality Aspect concept, Realisation Concept, Accrual Concept and Matching Concept.
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