Basic Accounting Quiz

1.            The basic purpose of accounting is

• a.    to provide information useful in making economic decisions

• b.    to provide information useful only for investors

  b.   

• c. to provide information regarding the economic resources controlled by an entity

• d.     to provide business owners, politicians, and other government officials an opportunity to evade taxes

2.   The law that regulates the practice of accounting in the Philippines is the Philippine Accountancy Act of 2004 also known as

• a.   R.A. No. 9298                  

•     b. R.A. No. 8299

• c. R.A. No. 9892                        

• d. R.A. Blg. 69

3.   Which of the following represents the expanded basic accounting equation?

• a.    Assets = Liabilities + Common Shares + Dividends – Income –

  Expenses

• b.    Assets + Dividends + Expenses = Liabilities + Equity + Income

• c.     Assets – Liabilities – Dividends = Equity + Income – Expenses

• d.    Assets = Income + Expenses – Liabilities

4.   An accounting period which is a fiscal year may be

• a. One month

• b. One quarter         

• c. One year          

• d. a, b or c

5.   The best interpretation of the word credit is the

• a.   offset side of an account.                          

• b.  increase side of an account                     

• c. right side of an account.

•   d. decrease side of an account

6.   Accounting has been given various definitions, which of the following is

not one of those definitions

• a.    Accounting is a service activity. Its function is to provide quantitative information, primarily financial innature, about economic entities that is intended to be useful in making economic decisions.

• b.    Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part of at least, of a financial character and interpreting the results thereof.

• c.    Accounting is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.

• d.    Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of information.

7.   It is the first process used in accounting. It refers to the identification of events as to whether they are recognized or not in the financial statements.

• a. Identifying

• b. Measuring

• c. Communicating

• d. Auditing

8.   These are the means by which the information accumulated and processed in financial accounting is periodically communicated to the users.

• a.  financial statements                                

• b.  worksheet                                       

• c. trial balance

• d. management reports

9.            Financial accounting applies to which of the following:

                                   

         

• a.  Businesses   

• b. Non-profit organizations 

• c. Governments

• d. All of these

10.            The most common form of business organization is a

                                     

• a.  corporation

• b. partnership

• c. sole proprietorship

• d. cellphone stand