FABM1 (ACCOUNTING CONCEPTS AND PRINCIPLES)

H&H CO. bought a service van for P650,000 last 2015. The van could now be sold for only P150,000. In H&H CO.'s financial statement, what amount should appear in the statement?

• 150,000

• 650,000

• 800,000

• 500,000

Generally Accepted Accounting Principles (GAAP) refers to a common set of accounting principles, standards, and procedures issued by Philippines Accounting Standards Board (PASB)

• true

• false

This concept recognizes

an economic or business entity as an individual

accounting entity, separate from its owners,

managers, and employees.

• Going Concern Assumption

• Monetary Unit Concept

• Entity Concept

• Periodicity Concept

G.V. Ltd. uses the fiscal time period. They started their accounting period last February 1, 2020. Their first accounting period will end on

• February 28, 2021

• March 1, 2021

• February 1, 2021

• January 31, 2021

Marian Santos, owner of MS Office, purchased 2 sets of computer for her children's use. She declared the transaction as an expense of MS Office. This is against the concept of...

• Periodicity

• Accrual Concept

• Materiality

• Entity Concept

This principle guides accountants' information to be free from biases as evidenced by documents.

• Reliability

• Consistency

• Materiality

• Conservatism

This concept or principle indicates that accountants should disregard accounting standards for trivial matters or for those transactions that are not important to influence decisions.

• Conservatism

• Reliability

• Materiality

• Consistency

Based on the expense recognition principle, expenses should be recorded when it was paid, not when it is incurred.

• True

• False

This concept differentiates income from cash collections, and expenses from cash payments.

• Going Concern Assumption

• Accrual Basis of Accounting

• Materiality Concept

• Historical Cost concept

In revenue recognition principle, When a customer paid in advance while the services has yet to be rendered, we record _______ instead of revenue/income.

• Cash

• Accounts Receivable

• Unearned Revenue

• Expenses