FABM1 Summative Test

It is described as putting an amount on the accountable events.

• Identifying

• Recording

• Measuring

• Communicating

The five major accounts are ASSETS, ________, ________, ________, and________.

It refers to the cost of earning income.

• Asset

• Liability

• Equity

• Expense

It is an inflow of wealth of the business from dealings with clients or customers.

• Asset

• Liability

• Equity

• Income

It refers to the list of all accounts with their respective debit and credit

balances.

Which of the choices below best describes statements 1 and 2?

Statement 1: Accounting is both and an art and discipline.

Statement 2: Accounting is a systematized body of knowledge that evolved with the development of trade and business.

• Only statement 1 is correct.

• Only statement 2 is correct.

• Both statements are correct.

• Both statements are not correct.

Which of the following statements describes accounting as an information system?

• Accounting performs specific tasks of collecting, identifying, measuring, and communicating financial information.

• Accounting is used to identify and measure economic activities.

• Accounting involves acquiring a specialized formal education.

What is bookkeeping?

• Bookkeeping is the actual process of preparing and presenting the accounts.

• Bookkeeping is the more specific term applied to the preparation of the subsequent financial statements.

• Bookkeeping is part of accounting and is the primary and basic function in the accounting process.

What is being described in the statement “Accounting is a body of knowledge which has been systematically gathered, classified and organized.”?

• Accounting is the Language of Business

• Accounting as an Art

• Accounting as Science

• Accounting as an Information System

He is referred to as the “Father of Accounting and Bookkeeping.”