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WorksheetsPost-test - Fundamental Accounting Concepts and Principles
Total questions: 15
Worksheet time: 9mins
Entity NTZ is already undergoing liquidation. As such, the entity's financial statements
should be prepared using the going concern assumption.
should not be prepared using the going concern assumption.
may be prepared using the going concern assumption, depending on management's judgment.
The fundamental characteristic of information where it should be able to influence user's decision refers to (a) .
Under the revenue recognition principle, revenue is said to be earned
when cash is received, irrespective of the timing of delivery of goods or rendering of services.
upon delivery of goods or rendering of services, irrespective of when cash is received.
upon delivery of goods or rendering of services and when cash is received.
upon receipt of order from the customer.
Faithful presentation requires 100% accuracy of the financial information in the financial statements
True
False
Mr. Z, the owner of Z Company, took P500 pesos from the company funds to pay for a personal purchase. Under the economic entity concept, this will be
ignored in the accounting books, since it is a personal transaction of the owner.
recorded in the accounting books as a business expenses.
recorded in the accounting books as a transaction with the owner.
recorded in the accounting books as a business revenue.
The following are application of prudence, except for
Ensuring assets are not reported at an amount that is higher than what could be recovered.
Ensuring liabilities are not reported at an amount lower that is expected to be paid.
Being caution in applying accounting policies on matters involving estimates, judgment and uncertainties.
Recording non-existent expenses in order to report lower profits.
Under periodicity, when a business adopts a fiscal year, it may start its accounting period on May 1 and end in (a) .
An accounting period that start on January 1 and ends in December 31 is called _________ _________.
(a)
When errors and fraud materially affects the financial statements, the financial information contained therein will lose which of the following characteristics?
Comparability
Faithful presentation
Relevance
Timeliness
Under periodicity, all financial statements are always prepared with a 12-month period coverage.
True
False
Treating the owner and business as one violates
Economic entity concept
Verifiability
Going concern
Materiality
Entity H created a policy wherein a single equipment with a monetary value of P5,000 and above may be considered as fixed assets. Those below that amount set is deemed insignificant and will be treated as office supplies and expensed out when used. This is an example of the application of
Materiality
Prudence
Comparability
Going concern
Under the going concern assumption, the business is
assumed to continue operating for a period of at least 12 months from the reporting date.
assumed to continue operating for a period of at most 12 months from the reporting date.
distinct and separate from its owner
divided into equal time periods from financial reporting
Under generally accepted accounting principles, an entity should recognized an expense
upon payment to the supplier.
upon consumption of goods or rendition of service by suppliers
upon placement of order to the supplier.
upon confirmation by the supplier of the entity's order.
By the end of 20XX, Mr. O, owner of O Enterprise, learned that the prices of commodities increased by around 3.5%. As such, Mr. O should increase the value of the business inventories by the same rate.
True
False
