Accounting for Non-Accountants

The branch of accounting that deals with providing financial information to external decision makers is:

Select one:

• Government accounting

• Public accounting

• Financial accounting

• Managerial accounting

Which of the following statements is incorrect?

Select one:

• Account is the basic storage of information in accounting

• Recording is the accounting process in which financial statements are prepared

• Accounting affects all economic organizations, whether private entity or government entity and whether profit-oriented or non-profit organization.

• Posting is the process of classifying the effects of recorded events on the accounts.

The main purpose of accounting is :

• to provide information that is useful in making economic decisions.

• to account for money so it will not be lost.

• to safeguard the assets of a company

• o provide a clear view of the state of the industry's economy

Accounts are listed in the trial balance in this sequence:

Select one:

• Asset, Liabilities, Equity, Income and Expense

• Asset, Liabilities, Equity, Expense and Income

• Asset, Equity, Liabilities, Expense and Income

• Asset, Expense, Liabilities, Equity and Income

External users of general-purpose financial statements include all of the following except:

Select one:

• Investors

• Lenders

• Creditors

• Owners who are directly involved in managing the business

Which of the following is an advantage of a service business?

• You don't need to worry about inventory costs, warehousing and distribution costs.

• You can take advantage of price fluctuations by increasing your stocks of goods when prices temporarily go down

• Lower cost of quality

• You have high growth potential because you can tap into a wider market and can produce in large quantities.

Accounting is often called the "language of business" because:

Select one:

• All business owners have a good understanding of accounting principles

• it is fundamental to the communication of financial information

• It is easy to understand

• accountants in many companies share financial information

The start-up capital of a business consisted of P1,000,000 cash provided by the business owner and an additional P250,000 from a bank loan. The total start-up assets of the business therefore is:

Select one:

• . P750,000

• P1,250,000

• P1,000,000

• P250,000

Entity A has a beginning inventory of P280,000. During the period Entity A purchased inventories costing P890,000. Freight paid on the purchase totaled P30,000. If the ending inventory is P220,000, how much is the cost of goods sold?

Select one:

• 1,360,000

• 920,000

• 950,000

• 980,000

Entity A has a beginning inventory of P340,000. During the period Entity A purchased inventories costing P990,000 paid on the purchase totaled P40,000. The ending inventory was P360,000. If the net sales were P1,200,000, how much is the gross profit?

Select one:

• 190,000

• 1,010,000

• 1,200,000

• 260,000