1.

Accounting is the art of recording, classifying and summarizing in a significant

manner and in terms of money, transactions and evnts which are in part atl
least of a financial character and intrerpreting the results thereof. This
accounting definition is given by
a. Accounting Standard Council
b. Board of Directors
c. Board of Accountancy
d. American Accounting Association
2. The body authorized by law to promulgate rules and regulations affecting the
practice of the accountancy profession in the Philippines.
a. IFRIC
b. PAS
c. PFRS
d. BoA
3. Which of the following is not an enhancing qualitative characteristic of
accounting information?
a. Comparability
b. Unity
c. Understandability
d. Timeliness
4. The examination of financial statements by independent certified public
accountant for the purpose of expressing an opinion as to the fairness with
which the financial statements are prepared is called
a. Bookkeeping
b. Auditing
c. Financial Accounting
d. Public Accounting
5. Accounting is conceptual and is concerned with the why, reason or
justification for any action adopted.
Auditing is procedural and largely concerned with development and
maintenance of accounting record and the how of accounting.
a. 1st statement is true. 2nd statement is false.
b. 1st statement is false. 2nd statement is true.
c. Both statement is true.
d. Both statement is false.
6. Residual interest in the assets of the entity after deducting all of its liabilities.
a. Assets
c. Equity
b. Liabilities
d. Income
7. The quality of being honest to the users.
a. Relevance
b. Reliability
c. Faithful Representation
d. Understandability

8. Which of the following is an internal user of an entitys financial information?

a. Board of directors
b. Shareholder in the entity
c. Creditors
d. Taxing authority
9. Revenue is recognized when received regardless of when earned.
a. Cash Method
b. Accrual Basis
c. Going Concern
d. Matching Principle
10.Requires that revenues are recorded when actually earned.
a. Realization rule
b. Matching Rule
c. Monetary Rule
d. Historical Cost Rule

11.The primary users of financial information include

I.
Existing and potential investors
II.
Existing and potential lenders and other creditors
III.
User group such as employees, customers, governments and their
agencies, and the public.
a. I only.
b. I and II only.
c. I and III only.
d. I, II and III
12.One element of the objecive of financial reporting is to provide
a. Information about the investors in the entity.
b. Information about the liquidation value of the resources held by the entity
c. Information that is useful in assessing cash flow prospects
d. Information that will attract new investors.