FUNDA 1 Q3 Reviewer

Employees are mainly concerned with...

• The company’s ability to provide other employment opportunities

• The management’s plan to expand the company to yield more revenues

• The company’s ability to pay salaries

• The company’s ability to pay obligations when they become due

Which of the following statements DO NOT adhere to the accounting principle of conservatism?

• Make sure that income and assets are not overstated.

• When in doubt, record any loss but do not record any gain.

• Liabilities and expenses are not overstated.

• In case of doubt, record any gain and do not record any loss.

Which of the following could be a contribution of an industrial partner to a partnership?

• real estate

• expertise

• fund

• plant

The following are functions of Cost accounting EXCEPT for _____.

• prepares tax returns and tax payments

• ) reduces costs to optimize profitability

• determines how funds are spent

• enhances effective production control

The key development during this time are the machineries, power tools, inventions which led to expansion of trade.

• Renaissance

• Industrial revolution

• Late 19^th century

• 20^th century

Which of these best describes a merchandising company?

• offers professional skills to customer

• involves large-scale production

• buys goods and resells it

• creates their own products

Main source of income of a business.

• government

• public

• employees

• client

It refers to the trade between companies in different countries.

• Barter system

• Local trade

• Merchandising

• Transnational commerce

What is the main purpose of the government as one of the users of accounting?

• determine the capabilities of a business entity to honor obligations

• regulate the business in the economy

• understand the field of accountancy

• know whether or not to start business under the current economic conditions

Under this accounting principle, expenses are recognized under the same period as the related revenue.

• accrual accounting

• matching principle

• cash basis of accounting

• conservatism