Accounting Concepts

He is known as the father of modern accounting.

• Henry Fayol

• Luca Pacioli

• Andrea Barbarigo

• Jacques Savary

It is involved in providing professional services particularly in performing tasks by making financial reports regarding the financial activities of economic entities. What nature of accounting is it?

• An art and science

• A Discipline

• A service activity

• A Language of Business

Why is accounting called language of business?

• It can be used to record different transactions of the business.

• It serves as a tool for communication in making decisions for the business.

• It generates profits for the business.

• It speaks in behalf of the management in different business presentations.

These external users of financial reports primarily use accounting information to assess their return on investment in the business.

• Government

• Creditors

• Management

• Investors

Which of the following forms of business organization offers intangible goods in exchange of money or cash?

• manufacturing business

• merchandising business

• service business

• online business

A company requires that expenses must be matched with revenue. Which accounting principle is used?

• Accrual Accounting Principle

• Materiality Principle

• Going Concern Principle

• Matching Principle

Gale started a business assuming that it will not enter into a liquidation and the business will run forever. Which accounting principle is followed?

• Going Concern Principle

• Business Entity Principle

• Time Period Principle

• Conservatism Principle

Aling gempot sold a piece of cupcake to her neighbor. Apparently, her customer is out cash so Aling gempot had to consider it as credit but still recorded it in her books. What concept of accounting was observed?

• Accrual Accounting Principle

• Materiality Principle

• Historical Cost Principle

• Monetary Principle

A fundamental concept that uses a Philippine peso for economic activities which allows the accountants to add and subtract peso amounts as though each peso has the same purchasing power as any other peso at any time. Which principle is used?

• Monetary Principle

• Disclosure Principle

• Objectivity Principle

• Business Entity Principle

When creating a business, the properties of the owner must be separated from the properties of the business. What concept is being identified in the statement given?

• Economic Entity Principle

• Business Entity Principle

• Conservatism Principle

• Objectivity Principle