FABM1-Reviewer -Midterms SY2024-25

What is the Basic Accounting Equation?

• Liabilities =Assets + Equity

• Assets = Liabilities + Equity

• Equity = Assets + Liabilities

• Income = Assets +Equity

A business transaction is recorded in the books of accounts if

• It is an accountable event

• It is a favorable transaction

• It increases assets

• There is no criteria

It is the facet of business that is responsible for building good rapport with customers.

• Production

• Marketing

• Finance

• Accounting

Which of the following phases in the accounting process comes first?

• Interpreting

• Recording

• Identifying

• Communicating

Accounting is a process of identifying, recording and communicating economic information that is useful in making economic decisions.

• True

• False

Only economic events are recorded in the books of accounts.

• True

• False

Accounting is described as a practical art. This is because it is a body of knowledge which has been systematically gathered, classified and organized.

• True

• False

Bookkeeping and accounting are the same.

• True

• False

Accounting is often referred to as the 'language of the soul' because it is fundamental to the communication of financial information.

• True

• False

Financial information in accounting reports is also quantitative information.

• True

• False