What is the difference between accounts receivable and notes receivable?

Notes receivable are formal promises, while accounts receivable are informal promises.

Accounts receivable are formal promises, while notes receivable are informal promises.

Accounts receivable are for goods sold, while notes receivable are for services rendered.

Notes receivable are for goods sold, while accounts receivable are for services rendered.

What is the purpose of an allowance for bad debts?

To estimate the amount of uncollectible accounts receivable

To track the amount of cash received from customers

To record the cost of goods sold

To calculate the net income for the period

What is the difference between owner's capital and owner's drawings?

Owner's capital represents the owner's investment in the business, while owner's drawings represent the owner's withdrawals from the business.

Owner's drawings represent the owner's investment in the business, while owner's capital represents the owner's withdrawals from the business.

Owner's capital is a liability, while owner's drawings is an asset.

Owner's drawings is a liability, while owner's capital is an asset.

What is the purpose of the accounting cycle?

To prepare financial statements

Which of the following is NOT a part of the accounting cycle?

Identifying business transactions

Recording transactions in a journal

Posting transactions to a ledger

What is the difference between an internal event and an external event?

Internal events occur within the business, while external events occur between the business and external parties.

External events occur within the business, while internal events occur between the business and external parties.

Internal events are recorded in the journal, while external events are recorded in the ledger.

External events are recorded in the journal, while internal events are recorded in the ledger.

What is the concept of duality in accounting?

Every transaction affects at least two accounts.

Every transaction must be recorded in both the journal and the ledger.

Every transaction must be approved by the owner of the business.

What is the normal balance of an asset account?

It depends on the specific asset

What is the purpose of a trial balance?

To ensure that the total debits equal the total credits

To prepare the financial statements

To record transactions in a chronological order

To analyze the financial performance of the business

What is the difference between a permanent account and a temporary account?

Permanent accounts are used to track assets, liabilities, and equity, while temporary accounts are used to track revenues and expenses.

Temporary accounts are used to track assets, liabilities, and equity, while permanent accounts are used to track revenues and expenses.

Permanent accounts are closed at the end of the accounting period, while temporary accounts are not.

Temporary accounts are closed at the end of the accounting period, while permanent accounts are not.

What is the purpose of adjusting entries?

To ensure that revenues and expenses are recorded in the correct accounting period

To update the balances of asset, liability, and equity accounts

To prepare the financial statements

What is the purpose of closing entries?

To transfer the balances of temporary accounts to permanent accounts

To update the balances of asset, liability, and equity accounts

To prepare the financial statements

What is the purpose of revising entries?

To correct errors in the accounting records

To update the balances of asset, liability, and equity accounts

To prepare the financial statements

What is the difference between a balance sheet and an income statement?

A balance sheet shows the financial position of a business at a specific point in time, while an income statement shows the financial performance of a business over a period of time.

An income statement shows the financial position of a business at a specific point in time, while a balance sheet shows the financial performance of a business over a period of time.

A balance sheet is used by internal users, while an income statement is used by external users.

An income statement is used by internal users, while a balance sheet is used by external users.

What is the normal balance of a liability account?

It depends on the specific liability

What is the normal balance of an expense account?

It depends on the specific expense

What is the normal balance of a revenue account?

It depends on the specific revenue

What is the purpose of a chart of accounts?

To organize and classify accounts

To prepare the financial statements

To analyze the financial performance of the business

What is the difference between a debit and a credit?

A debit increases the balance of an asset account, while a credit decreases the balance of an asset account.

A credit increases the balance of an asset account, while a debit decreases the balance of an asset account.

A debit increases the balance of a liability account, while a credit decreases the balance of a liability account.

A credit increases the balance of a liability account, while a debit decreases the balance of a liability account.

What is the difference between a journal and a ledger?

A journal is a chronological record of transactions, while a ledger is a grouping of accounts.

A ledger is a chronological record of transactions, while a journal is a grouping of accounts.

A journal is used to track the flow of cash, while a ledger is used to prepare the financial statements.

A ledger is used to track the flow of cash, while a journal is used to prepare the financial statements.

What is the purpose of a post-closing trial balance?

To ensure that the total debits equal the total credits after closing entries have been made

To prepare the financial statements

To record transactions in a chronological order

To analyze the financial performance of the business

What is the difference between a cash basis of accounting and an accrual basis of accounting?

Cash basis accounting recognizes revenues when cash is received and expenses when cash is paid, while accrual basis accounting recognizes revenues when they are earned and expenses when they are incurred.

Accrual basis accounting recognizes revenues when cash is received and expenses when cash is paid, while cash basis accounting recognizes revenues when they are earned and expenses when they are incurred.

Cash basis accounting is used by small businesses, while accrual basis accounting is used by large businesses.

Accrual basis accounting is used by small businesses, while cash basis accounting is used by large businesses.

What is the purpose of a statement of cash flows?

To show the changes in cash during a period

To show the financial position of a business at a specific point in time

To show the financial performance of a business over a period of time

To show the changes in equity during a period

What is the purpose of an income statement?

To show the financial performance of a business over a period of time

To show the financial position of a business at a specific point in time

To show the changes in cash during a period

To show the changes in equity during a period

What is the purpose of a balance sheet?

To show the financial position of a business at a specific point in time

To show the financial performance of a business over a period of time

To show the changes in cash during a period

To show the changes in equity during a period

A T-account is used to visualize account balances in accounting.

A T-account is a method for inventory management.

A T-account is used for tax calculations.

A T-account is a type of financial statement.

Temporary accounts include revenue, expense, and dividend accounts.

Only asset accounts can be temporary accounts.

Permanent accounts include cash and inventory accounts.

Temporary accounts are only used for tax purposes.

DEALER ACRONYM STANDS FOR?

DEALER: Drawings, Expenses, Assets, Liabilities, Equity, Revenue

DEALER: Debits, Expenses, Accounts, Liabilities, Equity, Returns

DEALER: Debits, Equity, Assets, Liabilities, Expenses, Revenue

DEALER: Dividends, Earnings, Assets, Losses, Equity, Revenue

Objectivity in accounting ensures reliability and trustworthiness of financial information.

Objectivity in accounting is primarily concerned with tax regulations.

Objectivity in accounting allows for subjective interpretations of data.

Objectivity in accounting is irrelevant to financial reporting.

Philippine Financial Reporting Standards

Philippine Financial Regulation Standards

Public Financial Reporting Standards

Philippine Fiscal Reporting Standards

PROCESS OF ACCOUNTINNG

The process of accounting includes identifying, recording, and communicating financial transactions.

Accounting involves only the analysis of financial statements.

The process of accounting is only about tax preparation.

The main focus of accounting is to create budgets.

Accounting is a service activity

Accounting is only for large businesses

Accounting is a product activity

A currency that maintains its sign/unit on financial reports

A type of investment that guarantees high returns.

A currency that fluctuates wildly in value.

A currency that is only used for international trade.

FABM REVIEWER QUIZ ONLY

Quiz

•

Specialty

•

12th Grade

•

Practice Problem

•

Easy

Ross Perez

Used 1+ times

FREE Resource

60 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

20 sec • 2 pts

What is the primary purpose of accounting?

To track financial transactions

To provide information for decision-making

To comply with legal requirements

All of the above

2.

MULTIPLE CHOICE QUESTION

20 sec • 2 pts

Which of the following is NOT an accountable event?

Purchasing office supplies

Paying salaries

Hiring a new employee

Receiving a loan

3.

MULTIPLE CHOICE QUESTION

20 sec • 2 pts

What is the process of recording accountable events in a chronological order called?

Posting

Journalizing

Summarizing

Communicating

4.

MULTIPLE CHOICE QUESTION

20 sec • 2 pts

Who is considered the "father of accounting"?

Luca Bartolomeo de Pacioli

Adam Smith

Karl Marx

Henry Ford

5.

MULTIPLE CHOICE QUESTION

45 sec • 2 pts

Which branch of accounting focuses on providing financial information to external users?

Managerial accounting

Financial accounting

Cost accounting

Tax accounting

6.

MULTIPLE CHOICE QUESTION

20 sec • 2 pts

What does GAAP stand for?

Generally Accepted Accounting Principles

Global Accounting and Auditing Practices

Government Accounting and Auditing Policies

General Accounting and Auditing Procedures

7.

MULTIPLE CHOICE QUESTION

10 sec • 2 pts

Which accounting concept assumes that a business will continue to operate indefinitely?

Separate entity concept

Going concern assumption

Accrual basis of accounting

Stable monetary unit concept

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FABM REVIEWER QUIZ ONLY

60 questions

What is the primary purpose of accounting?

Which of the following is NOT an accountable event?

What is the process of recording accountable events in a chronological order called?

Who is considered the "father of accounting"?

Which branch of accounting focuses on providing financial information to external users?

What does GAAP stand for?

Which accounting concept assumes that a business will continue to operate indefinitely?

What is the principle that requires expenses to be matched with the revenues they generate?

Which of the following is NOT a qualitative characteristic of accounting information?

What is the accounting equation?

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