MIDTERM - FABM 1

Verification is NOT a step in the accounting process.

• TRUE

• FALSE

Luca Pauloi is considered the father of modern accounting

• TRUE

• FALSE

C.P.A. stands for Certified Private Accountant.

• TRUE

• FALSE

Accounting is a set of rules and methods by which economic information of a business is collected and made into reports that are useful to end-users. A drawing account is increased by debits and decreased by credits.

• TRUE

• FALSE

Inventory is recorded at the lower of cost or net realizable value rather than the expected selling price. This ensures profit on the sale of inventory is only realized when the actual sale takes place.

• Going Concern

• Materiality Concept

• Prudence Concept

• History Cost

Financial statements are prepared with the expectation that a business will remain in operation indefinitely.

• Going Concern

• Materiality Concept

• Prudence Concept

• History Cost

GAAP stands for:

• Generally Accepted Auditing Procedures

• Generally Accepted Accounting Procedures

• Generally Accepted Accounting Principles

• Generally Auditing Accounting Principles

The Corona Limited Co. has three plants nationwide that cost a total of P200 million. The current fair value of the plants is P600 million. The plants will be recorded and reported as assets at:

• P200M

• P600M

• P400M

• P800M

It includes the money and any medium of exchange acceptable by the bank for deposits such as bills, coins, funds for current purposes, checks, cash in the bank, etc.

• Cash

• Notes Payable

• Accounts Receivable

• Utilities EXpense

These are economic obligations, debts, or payables of the business.

• Assets

• Owner's Equity

• Liabilities

• Expense