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WorksheetsACC102 - FAR
Total questions: 154
Worksheet time: 1hrs 17mins
Which of the following statement is false?
Cash discounts are a convenient means of reducing prices to invoice prices.
Cash discounts are used to encourage customers to make prompt discount payments.
Cash discounts may be offered in conjunction with trade discounts.
From the seller’s point of view, the terms “cash discount” and “sales discount” are the same.
A chart of accounts is
a subsidiary ledger.
a general ledger.
a general journal.
a listing of all account titles.
This is the branch of accounting that is concerned primarily with the *1/1 preparation of general purpose financial statements:
Managerial accounting
Financial accounting
Cost accounting
Auditing Untitled
Angelica, owner of Angel Services, withdrew P25,000 from the business *3/3 during the current year. The entry to close the withdrawals account at the end of the year is:
Debit Angelica, withdrawals P25,000 Credit Angelica Capital P25,000
Debit Income Summary P25,000 Credit Angelica Capital P25,000
Debit Angelica Withdrawals P25,000 Credit Cash P25,000
Debit Angelica Capital P25,000 Credit Angelica Withdrawals P25,000
When a business entity receives payment from a customer before delivering the goods, the unearned revenue account is
debited
credited
debited and credited
not affected
A company forgot to record accrued and unpaid employee wages of P35,000 at period end. This oversight would
Understate net income by 35,000
Overstate net income by 35,000
Overstate assets by 35,000
Have no effect in net income
The basic purpose of accounting is
to provide the information that the mangers of an economic entity need to control its operations.
to provide information that the creditors of an economic entity can use in deciding whether to make additional loans to the entity.
to measure the periodic income of the economic entity.
to provide quantitative nancial information about a business enterprise that is useful in making rational economic decision.
The controlling account in the general ledger that summarizes the debits *1/1 and credits to the individual customer accounts in the subsidiary ledger is called
accounts receivable
accounts payable
sales
purchases
Which of the following is not a characteristic of the periodic system?
cost of goods sold is computed at the end of the period
purchases are recorded by debiting purchases at cost
inventory records are always up to date
merchandise inventory, beginning is a nominal account
A ledger
contains only assets and liability accounts.
should show accounts in alphabetical order.
is a collection of the entire group of accounts maintained by a company.
is a book of nal entry.
Reversing entries may be prepared for the following adjustments, except:
accrued income
accrued expense
prepayments, if the asset method is used
unearned revenues, if the income method is used
On December 31, earned but unpaid wages amounted to P10,300. What reversing entry could be made on January 1?
Debit Wages expense P10,300 Credit Wages payable P10,300
Debit Prepaid wages P10,300 Credit Wages expense P10,300
Debit Wages expense P10,300 Credit Prepaid wages P10,300
Debit Wages payable P10,300 Credit Wages expense P10,300
The expression 3/20; n/30 means
the invoice must be paid in 3 to 20 days, otherwise, interest for 30 days will be
charged.
a 3% discount is available if the invoice is paid in 20 to 30 days; otherwise the total invoice is due.
a 3% discount is available if the invoice is paid within 20 days, otherwise, the total invoice price is due in 30 days.
a 3% discount is available if the invoice is paid within 30 days.
Goods have an invoice price of P125,000 and the seller had a gross profit *3/3 rate of 25% of cost, what is the cost of goods sold?
100,000
93,750
125,000
156,250
In preparing the worksheet, which of the following group of accounts is *1/1 not extended to the balance sheet column?
Assets, contra-assets, and liabilities.
Liabilities, contra-liabilities, and prot for the period.
Drawing, capital, and prot for the period.
Income, expenses, and losses.
Why are adjusting entries necessary?
to record revenues and expenses.
to make debits equals credits.
to close nominal accounts at year end.
to correct erroneous balances in account
What function do accounting journals serve in the accounting process?
classifying
summarizing
recording
reporting
The inventory of a merchandising entity consists of goods purchased for resale. Which is not a part of the inventory of a grocery store?
canned goods
meats and vegetables
computer equipment
dried goods
The payment of a liability
decreases assets and owner’s equity.
increases assets and decreases liabilities.
decreases assets and increases liabilities.
decreases assets and decreases liabilities.
The allowance for doubtful accounts is an example of a (an)
expense account
contra account
adjunct account
control account
Posting refers to the process of transferring information from
Journal to the general ledger accounts.
Journals to source documents.
General ledger accounts to the journal.
Source documents to journal.
The best definition of assets is
the collection of resources belonging to the company and the sources of , or claims
on these resources
the cash and properties owned by the company.
the resources belonging to a company having future benet to the company.
the owner’s investment in the business.
The links between the financial statements are
ending capital from the statement of owner’s equity to the statement of nancial
position.
net income from the statement of comprehensive income to the statement of owner’s equity.
both a and b.
none of the above.
Under the perpetual inventory system, the entry to record a sales return would include a debit to
Accounts receivable
Sales discount
Cost of goods sold
Merchandise inventory
This is the financial statement that shows the assets, liabilities, and owner’s equity of the business as of a given date.
Statement of Comprehensive Income
Statement of Cash Flows
Statement of Financial Condition
Statement of Changes in Equity
This refers to optional journal entries that are intended to make recording *1/1 transactions easier in the next accounting period.
simple entries
compound entries
reversing entries
adjusting entries
Operating income will result if gross profit exceeds
operating expenses.
purchases.
cost of goods sold.
sales discounts and sales returns and allowances.
A trial balance will not balance if
an entry on purchase of supplies is recorded twice.
a cash withdrawal of P5,000 is debited to a Capital account and credited Cash.
The purchase of supplies on account is debited to Supplies and credited to Cash.
a P20,000 payment on account is debited to Accounts payable for P2,000 and credited to Cash for P20,000.
The following accounts will not appear on the post-closing trial balance, except
Professional fees
Advertising expense
Taxes and licenses
Unearned revenue
From the point of view of the company receiving the cash, an item that represents services that have been paid for by the customer, but have not been provided to the customer by the firm which received the cash, is called
an accrued expense.
a prepaid expense.
an accrued revenue.
an unearned revenue.
An adjusting entry that records the earned portion of unearned revenue previously recorded always include a
Debit to an account in the asset category.
Credit to an account in the asset category.
Credit to an account in the owners' equity category.
Credit to an account in the liability category.
The income statement shows the performance of an enterprise
As of a given date.
At the end of the period.
At the time of crisis.
At the time of changes.
A worksheet may or may not be prepared to come up with the financial statements. Therefore, a worksheet is
Mandatory
Permanent
Optional
Final
An example of a nominal account is
Accumulated depreciation
Accrued expense
Accrued income
Doubtful accounts
The last step in the accounting cycle is to
prepare a post-closing trial balance
prepare nancial statements
journalize and post adjusting entries
journalize and post reversing entries
Information about the performance of an entity is required in order to assess potential changes in the economic resources that it is likely to control in the future. This information is primarily provided in the
cash ow statement
statement of retained earnings
statement of nancial position
statement of comprehensive income
An accrued expense can best be described as an amount
Paid and currently matched with earnings.
Paid and not currently matched with earnings.
Not paid and not currently matched with earnings.
Not paid and currently matched with earnings.
A company that sprays chemicals in residences to eliminate or prevent infestation of insects requires that customers prepay for 3 months' service at the beginning of each new quarter. Select the term that appropriately describes this situation from the viewpoint of the
exterminating company.
Unearned revenue
Earned revenue
Accrued revenue.
Prepaid expense
A balance sheet which is patterned after the accounting equation, A = L + Eq and is presented in a horizontal form is called
Natural form.
Account form.
Report form.
Functional form.
In reviewing a set of journal entries, you encounter an entry composed of a debit to interest expense and a credit to interest payable. The purpose of this journal entry is to record
An accrued expense.
A deferred expense.
A contingent liability.
An unexpired cost.
Which of the following is false?
Nominal accounts are presented in the income statement.
After posting the closing entries, the balances of the nominal accounts are reduced to zero.
After posting the adjusting entries, there are no more nominal accounts in the general ledger.
It is not necessary to close the nominal accounts every time f/s are prepared.
The elements directly related to the measurement of performance of an entity are
income and expenses
assets, liabilities and equity
assets and liabilities
income, expenses and equity
Which of the following accounts would not be closed to the income summary account at the end of a period?
Fees earned
Wages expense
Rent expense
Accumulated depreciation
The correct order of the following steps of the accounting cycle is
Posting, closing, adjusting, reversing.
Posting, adjusting, closing, reversing.
Posting, reversing, adjusting, closing.
Adjusting, posting, closing, reversing.
Closing entries
Transfer the balances in all of the nominal accounts to the capital account.
Must be made after the reversing entries but before the adjusting entries.
Close out all of the accounts in the general ledger.
Must be followed by reversing entries.
Why are adjusting entries necessary?
To record revenues and expenses.
To make debits equals credits.
To close nominal accounts at year end.
To correct erroneous balances in accounts.
The first step in the accounting cycle is to
adjust the general ledger accounts
analyze transactions from source documents
record transactions in a journal
post journal entries to general ledger accounts
What are real accounts?
Contra-asset accounts.
Accounts added to the beginning balance.
Balance sheet accounts.
Income statement accounts.
Failure to record the expired amount of prepaid rent expense would
Understate expenses
Overstate expenses
Overstate liabilities
Understate liabilities
When a seller allowed a reduction from the original price for defective goods, the seller will issue to the customer a
debit memorandum.
sales invoice.
credit memorandum.
ocial receipt.
Revenue is normally entered in the accounting records when:
A customer order goods.
A customer pays for the goods.
Goods are received by customers.
Goods are sold.
The FOB shipping point imply that the:
The seller of the goods pays the freight.
The buyer of the goods pays the freight.
Goods are places free on board to the buyer’s place of business.
Common carrier pays the freight.
Detailed records of goods held for resale are maintained under a
perpetual inventory system.
periodic inventory system.
double entry accounting system.
single entry accounting system.
Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as :
selling expenses
general expenses
other expenses
administrative expenses
Using perpetual inventory system, the entry to record sales return would *0/2 include
Credit to Merchandise Inventory.
Credit to Purchases.
Debit to Cost of goods sold.
Credit to Accounts Receivable.
If the seller is to pay the transportation costs of delivering merchandise, the delivery terms are stated as
FOB shipping point.
FOB destination.
FOB n/30.
FOB seller.
A credit note is used as documentation for a journal entry that requires a debit to
Sales and a credit to Cash.
Sales Returns and Allowances and a credit to Accounts Receivable.
Accounts Receivable and a credit to a contra revenue account.
Cash and a credit to Sales Returns and Allowances.
Under the perpetual inventory system accounting standards require any discount received for paying for inventory purchased within the discount period is to be
Credited to the Bank account.
Credited to the Inventory account.
Credited to the Cost of Sales account.
Credited to the Accounts payable account.
Using perpetual inventory system, freight cost incurred by the buyer for the transportation of goods is recorded in what account?
Freight-out.
Freight expense.
Freight-in.
Inventory.
What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?
gross prot
income from operations
net income
gross sales
In a merchandising operations, the Sales account
Only credit sales of merchandise.
Only cash sales of merchandise.
Both cash and credit sales of merchandise.
Sales of both merchandise and other assets of the business.
Netflix Company purchased supplies for cash. The journal entry to record *0/2 the purchase using perpetual inventory system will be
Debit Inventory and Credit Cash.
Debit Purchases and Credit Cash.
Debit Supplies and Credit Cash.
Debit Inventory and Credit Accounts Payable.
The cost of delivering goods to the customer is considered as:
Part of the cost of goods sold.
Is a contra-revenue account.
Part of operating expense.
Deduction to the cost of goods sold.
Which of the following account would appear in the income statement of a merchandising business, but not in the income statement of a service business?
Interest income
Income tax expense
Advertising expense
Freight-in
The transportation expense of P20,000 paid for the transport of goods *0/2 under F.O.B. destination, prepaid is a
cost of inventory.
cost of goods sold.
selling cost.
a receivable from buyer.
Which of the following discount has no account of its own and requires *2/2 no special accounting entry?
Sales discount
Purchase discount
Trade discount
Cash discount
Which of the following statement is false?
The difference between list price and invoice price is equal to the amount of the
trade discount.
Trade discounts are a convenient way of reducing list price to invoice price.
Trade discounts are not entered in the accounting records.
Trade discounts are identical to cash discounts.
If Miss Jam returned goods to the seller, what effect will the return have on the books of the seller?
An increase in Sales account.
A decrease in the Accounts Payable and Allowance accounts.
An increase in the Purchase Return and Allowance account.
An increase in the Sales Return and Allowance account.
Using periodic inventory system, the entry to record sales return would include
Debit Sales Return.
Debit Accounts Receivable.
Credit Cost of Goods Sold.
Debit Merchandise Inventory.
When the seller advances the transportation costs and the terms of sale are FOB shipping point, the seller records the payment of the transportation costs by debiting
Accounts receivable.
Transportation in.
Accounts payable.
Sales.
Revenue is normally entered in the accounting records when:
goods are received
goods are sold
a customer pays for the goods
a customer orders goods
Sales return and allowances is classified in the financial statements as:
an expense account.
a revenue account.
a contra revenue account.
a cost of goods sold account.
Theoretically, cash discounts permitted on purchased inventory should be
Added to other income, whether taken or not.
Added to other income, only if the discount is taken.
Deducted from inventory, whether taken or not.
Deducted from inventory, only if the discount is taken.
A physical inventory count is usually taken
in the middle of the accounting period.
at the end of the accounting period.
at the start of the accounting period.
at the peak of the busy season.
Which of the following statement is false?
Cash discounts are a convenient means of reducing prices to invoice prices.
Cash discounts are used to encourage customers to make prompt discount payments.
Cash discounts may be offered in conjunction with trade discounts.
From the seller’s point of view, the terms “cash discount” and “sales discount” are the same.
Under the perpetual inventory system, the entry to record a sales return would include a debit to
Accounts receivable.
Sales discount.
Cost of goods sold.
Merchandise inventory.
A sale on May 21 with terms of 2/10; n/30 is due to be collected by
May 23.
May 31.
June 20.
June 1.
It is the largest single expense of the merchandising business. It is the cost of inventory that the entity has sold to customers.
ending inventory
total goods available for sale
purchases and beginning inventory
cost of goods sold
Which of the following is not considered in computing net cost of purchases?
Transportation cost paid on purchased goods
Transportation cost paid on goods shipped to customers
Purchase returns and allowances
Purchases
Which of the following would not be included in merchandise inventory for a purchasing company?
Goods in transit shipped FOB shipping point.
Goods in transit shipped FOB destination.
Goods on hand in the showroom.
Goods ordered and received from the supplier.
I. The chart of accounts for a merchandising entity differs from that of a service entity.
II. Discounts offered to the buyer to encourage early payment are trade discounts.
III. If the seller is to shoulder the cost of delivery, the term is stated as FOB destination.
IV. The ending inventory of one period is the beginning of the next period.
Only one statement is true.
Only two statements are true.
Only three statement s are true.
All statements are true.
If a customer returns goods to a merchandiser, what effect will the return have on the books of the merchandiser?
an increase in sales account
a decrease in the accounts payable and allowance accounts
an increase in the purchase return and allowance account
an increase in the sales returns and allowance account
FOB shipping point means
title passes at shipping point; seller pays transportation cost
title passes at shipping point; buyer pays transportation cost
title does not pass at shipping point; however, buyer is responsible for the transportation cost
none of the above
A purchase discount results from
buying a large enough quantity of merchandise to get the discount.
returning goods to the seller.
receiving a purchase allowance from the seller.
paying within the discount.
When partial payment was made by the buyer for merchandise purchased on account with terms 2/10; n/30, what will happen when full payment will be made after the discount period?
Partial discount will be given to the buyer in proportion to the amount paid within the discount period.
A 2% discount will be given for the whole amount purchased.
No discount will be given at all.
A 2% discount will be given as long as it was paid within 30 days upon purchase.
In merchandising operations, the Sales account will be recorded if the *2/2 seller sells
assets that the company owns.
goods or merchandise only.
goods or merchandise on cash basis.
goods or merchandise with discount.
Which of the following discounts has no account of its own and requires no special accounting entry?
cash discount
trade discount
sales discount
purchase discount
What are real accounts?
Contra-asset accounts.
Accounts added to the beginning balance.
Balance sheet accounts.
Income statement accounts
An example of a nominal account is
Accumulated depreciation
Accrued expense
Accrued income
Doubtful accounts
A company that sprays chemicals in residences to eliminate or prevent infestation of insects requires that customers prepay for 3 months' service at the beginning of each new quarter. Select the term that appropriately describes this situation from the viewpoint of the
exterminating company.
Unearned revenue.
Earned revenue.
Accrued revenue.
Prepaid expense.
An accrued expense can best be described as an amount
Paid and currently matched with earnings.
Paid and not currently matched with earnings.
Not paid and not currently matched with earnings.
Not paid and currently matched with earnings.
In reviewing a set of journal entries, you encounter an entry composed of a debit to interest expense and a credit to interest payable. The purpose of this journal entry is to record
An accrued expense.
A deferred expense.
A contingent liability.
An unexpired cost.
Which of the following accounts would not be closed to the income summary account at the end of a period?
Fees earned
Wages expense
Rent expense
Accumulated depreciation
From the point of view of the company receiving the cash, an item that represents services that have been paid for by the customer, but have not been provided to the customer by the firm which received the cash, is called
an accrued expense.
a prepaid expense.
an accrued revenue.
an unearned revenue.
The elements directly related to the measurement of performance of an entity are
income and expenses.
assets, liabilities and equity.
assets and liabilities.
income, expenses and equity.
Information about the performance of an entity is required in order to assess potential changes in the economic resources that it is likely to control in the future. This information is primarily provided in the
cash ow statement.
statement of retained earnings.
statement of nancial position.
statement of comprehensive income.
A business pays weekly salaries of P20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Thursday is
debit Salaries Payable, P16,000; credit Cash, P16,000.
debit Salary Expense, P16,000; credit Drawing, P16,000.
debit Salary Expense, P16,000; credit Salaries Payable, P16,000.
debit Drawing, P16,000; credit Cash, P16,000.
Gugel.Com started operations on December 1, 2021. On the same day, received cash amounting to P240,000 for two year subscription starting January 1, 2022.
How much should be reported as 2021 Subscription Income?
P-0-
P 10,000
P120,000
P240,000
The field of accounting where an accountant renders his services to a business enterprise, and where he performs a variety of tasks related to the accounting cycle.
public accounting
government accounting
private accounting
not for profit accounting
The phases of accounting include recording, classifying, summarizing and controlling.
True
False
Relevance of an information may be lost if there is undue delay in reporting them.
True
False
The basic purpose of accounting is to provide financial information to internal users to help them make informed judgments and better decisions.
True
False
In cases of conflict between the legal form and economic substance, the legal form is given the accounting recognition.
True
False
The primary purpose of a business is making profit.
True
False
Information about financial position is primarily provided in a balance sheet.
True
False
In cases when there is conflict between the framework and a PFRS, the requirements of the PFRS will prevail.
True
False
Revenue arises from central revenue producing activities of the enterprise.
True
False
Because of its subjectivity, historical cost is the basis most commonly applied by entities to measure the f/s elements.
True
False
Because of its subjectivity, historical cost is the basis most commonly applied by entities to measure the f/s elements.
True
False
liquidation of the company is imminent, the financial statement may still be prepared using the going concern assumption.
True
False
Liquidity refers to the availability of cash in the near future after taking account of financial commitments over the current period.
True
False
government and its agencies rely on financial information to determine whether business enterprises comply with prescribed rules and regulations.
True
False
Information about complex matters must be excluded from the f/s because the users may not understand.
True
False
An asset is recognized when it is possible that the future economic benefits will flow to the enterprise and its cost can be measured reasonably.
True
False
Equity is the residual amount in the liabilities of the company after deducting all its assets.
True
False
Management accounting is concerned with providing information to external users to help them in making economic decisions.
True
False
One characteristic of assets is that these are resources owned and controlled by the enterprise.
True
False
Losses are decreases in equity from incidental transactions of the entity, except those that result from distribution to owners.
True
False
Qualitative characteristics are the attributes that make the information provided in the financial statements useful to users.
True
False
The exercise of prudence allows the deliberate understatement of assets and overstatement of liabilities.
True
False
Under generally accepted accounting principles, revenue recognition normally occurs when cash is received.
True
False
The standards set out the concepts that underlie the preparation and presentation of financial statements for external users.
True
False
Legal ownership of the item is a requirement so that such item may be considered as an asset of the business.
True
False
Accounting is a service activity, whose function is to provide qualitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decisions.
True
False
Financial statements are prepared based on the assumption that users have common information needs.
True
False
Intercomparability is the comparability of financial statements of an enterprise for at least two reporting periods.
True
False
item is material if its inclusion would not make a difference in the evaluation and decision of the users of f/s.
True
False
The benefits derived from information should not exceed the costs of providing it.
True
False
Financial accounting information is primarily historical in nature.
True
False
The standards set out the concepts that underlie the preparation and presentation of financial statements for external users.
True
False
Which of the following is not a broad subdivision within the accounting profession?
academe
public accounting
government accounting
management accounting
Financial accounting is the area of accounting that emphasizes reporting to
internal auditors.
SEC and BSP.
Creditors and investors.
Management
The reporting period of an enterprise
may be equal or less than one year.
may be equal or more than one year.
is generally equal to one year.
generally depends on the decision of the management.
They are interested in information about trends and recent developments in the prosperity of the enterprise and the range of its activities.
investors
lenders
public
customers
Which of the following statements is not correct?
Accounting is both a science and an art.
Accounting is a service- oriented discipline.
Proper accounting of the transactions of a business will benet both the people inside and outside the enterprise.
Being a bookkeeper requires the same kind of training and preparation as that of being an accountant.
An advantage of a corporation is that
it has a limited life.
its owners’ personal assets are at stake.
its ownership is easily transferable via the sale of shares.
a change in ownership requires a new corporate agreement.
Which of the following is an internal user of a company’s financial information?
members of the board of directors
creditors with long-term contracts with the company
holders of the company’s bond
stockholders of the corporation
The best definition of assets is
the collection of resources belonging to the company and the sources of, or claims
on these resources.
the cash and properties owned by the company.
the resources belonging to a company having future benet to the company.
the owner’s investment in the business.
Which of the following is not a characteristic of financial accounting and financial statements?
Financial accounting represents information needed to serve the common needs of users.
Financial accounting information is primarily historical nature.
Financial statements are used to evaluate the entity’s performance and nancial condition.
Financial statements are prepared using the cash basis of accounting.
Which statement is incorrect concerning financial statements?
Financial statements are prepared and presented atleast annually and are directed
toward the common information needs of a wide range of users
The objective of f/s is to provide information about nancial position, performance and cash ows of an entity that is useful to a wide range of users in making economic decisions.
F/s also show the results of the stewardship of management of the accountability of management for the resources entrusted to it.
The external auditor of an entity has the primary responsibility for the preparation and presentation of its f/s.
Management accounting is the area of accounting that
emphasizes reporting to SEC.
developing accounting information for use within a company.
combining accounting knowledge with an expertise in management information system.
reporting nancial information to external users.
It refers to the firm’s ability to meet long-term obligations
protability
stability
solvency
liquidity
Information about the performance of an entity is required in order to assess potential changes in the economic resources that it is likely to control in the future. This information is primarily provided in the
cash ow statement.
statement of retained earnings.
statement of nancial position.
statement of comprehensive income.
The function of the certified public accountant that is most heavily relied on by the public as a whole is
auditing
cost accounting
performing tax services
internal auditing
The body authorized by law to promulgate rules and regulations affecting the practice of accountancy in the Philippines
Financial Reporting Standards Council
Professional Regulatory Board of Accountancy
Professional Regulation Commission
Securities and Exchange Commission
The International Accounting Standards Board (IASB) publishes its standards in a series of pronouncements called
International Accounting Standards
Financial Reporting Standards
International Financial Reporting Standards
Statement of Financial Accounting Standards
The branch of accounting that is concerned with providing information to present and potential creditors of an enterprise.
auditing
nancial accounting
managerial accounting
income tax accounting
The elements directly related to the measurement of performance are
income and expenses.
assets, liabilities and equity.
assets and liabilities.
income, expenses and equity.
A body of rules, policies, principles, standards of recognition and measurement methods which has been developed and is accepted by the members of the accounting profession and data-users is called:
basic accounting assumptions
qualitative characteristics
qualitative objectives
generally accepted accounting principles
A statement that is taken for granted to be true without need of proof is a/an
accounting principle.
underlying assumption.
qualitative objective.
reporting constraint.
A conceptual framework is
a Philippine Financial Reporting Standards.
an underlying accounting assumption.
a theoretical foundation which guides the FRSC, preparers and users of nancial accounting information in the preparation and presentation of f/s.
a financial statement.
Which of the following is not a satisfactory statement of the balance sheet equation?
Assets = Liabilities – Owner’s Equity
Assets – Liabilities = Owner’s Equity
Assets = Liabilities + Owner’s Equity
Assets – Owner’s Equity = Liabilities
Which of the following is an example of an internal transaction?
Purchased equipment.
Rendered services to customers or clients.
Used raw materials to produce the nished goods.
Took a loan from the bank.
The residual equity over the assets of a business enterprise is called
owner’s equity.
capital.
net assets.
all of the above.
