Accounting Concepts and Principles 1

Under this concept, the business is treated separately from its owners.

• Separate entity concept

• Historical cost concept

• Going concern

• Matching principle

Under this concept, the business is assumed to continue to exist for an indefinite period of time.

• Separate entity concept

• Historical cost concept

• Going concern

• Matching principle

Under this concept, some costs are initially recognized as assets and recognized only as expenses when the related revenue is recognized.

• Separate entity concept

• Historical cost concept

• Going concern

• Matching principle

It is the official accounting standard setting body in the Philippines.

• Philippine Institute of Certified Public Accountants

• Financial Reporting Standards Council

• Accounting Standards Council

• American Accounting Association

Businesses are required by to law to file tax returns with this government agency

• Security and Exchange Commission

• Bureau of Internal Revenue

• Cooperative Development Authority

• Bangko Sentral ng Pilipinas

Under this concept, assets are initially recorded at their acquisition cost.

• Single entity concept

• Historical cost concept

• Going concern concept

• Matching principle

Which of the following are considered enhancing qualitative characteristics?

I. Comparability

II. Verifiability

III. Materiality

IV. Understandability

• I only

• I, II and IV

• I and II

• I, II, III and IV

This qualitative characteristic means that financial statements are neither materially misstated nor important information is omitted.

• Completeness

• Neutrality

• Free from Error

• None of the above

This qualitative characteristic enables users to make comparisons to identify and understand the similarities in, and the differences among, reported information.

• Comparability

• Timeliness

• Verifiability

• Understandability

The accounting standards used in the Philippines are specifically referred to as the

• Generally Acceptance Accounting Principles

• Philippine Financial Reporting Standards

• International Accounting Standards

• Philippine Accounting Standardizations