Introduction to FABM 1

Preparation of trial balance, determination of adjusting entries, and preparation of financial statements are done in:

• Recording

• Classifying

• Summarizing

• Interpreting

Analysis of the companies financial statements is done in:

• Recording

• Classifying

• Summarizing

• Interpreting

It is the preparation and presentation of financial information for internal users in order to have a sound decision-making.

• Tax Accounting

• Cost Accounting

• Financial Accounting

• Managerial Accounting

This user of the financial statements is concerned mostly with the liquidity of business.

• Customer

• Lender

• Trade Creditor

• Investor

A user of financial statement who is concerned with the performance of the business and its ability to give returns.

• Customer

• Lender

• Trade Creditor

• Investor

Who among the following users of financial statements is concerned with the solvency of the business?

• Customer

• Lender

• Trade Creditor

• Investor

It is the first procedural step of the accounting process.

• Recording

• Classifying

• Summarizing

• Interpreting

The properties of the business are not the properties of the owner.

This is in view of the:

• Accrual basis of Accounting

• Going-concern assumption

• Separate entity assumption

• Time-period assumption

That revenue is recognized when earned and expenses are recorded when incurred are the applications of:

• Accrual basis of Accounting

• Going-concern assumption

• Separate entity assumption

• Time-period assumption

Presenting financial information at cost and not in liquidating values in the view of continued existence of the business is the meaning of

• Accrual basis of Accounting

• Going-concern assumption

• Separate entity assumption

• Time-period assumption