Midterm Exams Review - Nature and Branches of Accounting

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Accounting is a work or occupation for serving a particular purpose. Hence, since its purpose is to provide financial information, the data that it will process in terms of the four aspects of accounting should be expressed in monetary terms. In short it is interested in activities that can be measured and expressed in terms of the value of money.

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This is the reason why Accountancy became a profession and the practice of it is governed by sets of rules and accounting standards. The accountant is bound by the Code of Ethical Standards.

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The four aspects of accounting require both knowledge and skill through experience, study, or observation as a means to produce the key end product which are the financial reports.

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The performance of the four aspects of accounting, which are recording, classifying, summarizing and interpreting, leads to communicating to its users the relevant financial information needed by the parties interested.

Multiple Choice

A Branch of Accounting that esults in the preparation of financial statement and primarily created for outsiders

• Auditing

• Managerial Accounting

• Cost Accounting

• Financial Accounting

Multiple Choice

A Branch of Accounting that is concerned with the administration or use of public funds for the community. It is also concerned in identifying the sources and uses of funds consistent to the government regulations.

• Auditing

• Government Accounting

• Cost Accounting

• Tax Accounting

Multiple Choice

A Branch of Accounting that examines and reviews the accounting reports in order to ascertain their fairness, propriety and reliability. It is classified into Internal/Insider and External/Outsider.

• Financial Accounting

• Government Accounting

• Auditing

• Tax Accounting

Multiple Choice

A Branch of Accounting that involves in preparation of reports for the management. It is exclusively for internal use. It deals with Budgets, Variance Analysis, Return of Investment, and Payback Period.

• Financial Accounting

• Government Accounting

• Auditing

• Managerial Accounting

Multiple Choice

It is a branch of accounting that deals with the recording, classifying, and summarizing of the details of materials, labor and overhead necessary to produce and sell a product or service.

• Financial Accounting

• Managerial Accounting

• Auditing

• Cost Accounting

Multiple Choice

A Branch of Accounting that deals with preparation of tax returns, and consultancy on tax consequence of a possible business transaction.

• Financial Accounting

• Government Accounting

• Tax Accounting

• Auditing