JED RIEL M.

BALATAN
ABM-11

1. The following are examples of companies engaged primarily in the merchandising business, except:
A. Robinsons Department Store
B. Aling Tinay Sari-Sari Store
C. Winston Hardware
D. Allaina Dental Clinic

2. This is the most dominant legal form of business organization in the Philippines today:
A. Partnership
B. Corporation
C. Service Business
D. Sole proprietorship

3. Which of the following is considered by accountants to be a separate entity from its owners?
A. Sole proprietorship
B. Partnership
C. Corporation
D. All of the above

4. The following are similarities between a corporation and a partnership, except:

A. A juridical personality separate and distinct from the owners.
B. Can be organized only where there is a law organizing its existence
C. Composed of an aggregate of individuals
D. Governed primarily by the Civil Code of the Philippines

5. The group of users of accounting information charged with achieving the goals of a business is its
A. Investors
B. Creditors
C. Management
D. Auditors

6. A primary user of accounting information with a direct financial interest in the business is a
A. Creditor
B. Taxing authority
C. Regulatory agency
D. Labor union

7. Which of the following is not true?

A. Accounting is not exact Science
B. Accounting is the language of business
C. Accounting is a communication tool that is useful to both internal and external decision makers.
D. Accounting is useful only to people-oriented organizations

8. A primary user of accounting information with an indirect financial interest in a business is

A. A financial adviser
B. Management
C. An investor
D. A creditor

9. The following are classifications of business organizations, except:

A. Service, distribution, production
B. Proprietorship, partnership, corporation, and cooperative
C. Owners, workers, government
D. Separate, affiliate, consolidated

10. A business established to bridge the time, distance, volume, and price of goods from the producer to the
consumers is called as
A. Service
 B. Manufacturing
C. Distribution
D. Merchandising
11. An association of two or more persons who bind themselves to contribute to a common fund money,
skills, and property and agreed to distribute the profit among themselves.
A. Partnership
B. Corporation
C. Cooperative
D. Publicly accountable entities

12. The Department of Trade and Industry classifies medium-sized enterprises as those with assets ranging
in:
A. P1 to P3,000,000
B. P3,000,001 to P15,000,000
C. P15,000,001 to P100,000,000
D. P100,000,001 and above

13. The “primary users” of financial information include

I. Existing and potential investors.
II. Existing and potential lenders and other creditors.
III. User group such as employee, customers, governments and their agencies and the public.

A. I only
B. I and II only
C. I and III only
D. I, II and III

14. Which of the following is an internal user of an entity’s financial information?

A. Board of Directors
B. Shareholder in the entity
C. Holder of the entity’s bonds
D. Creditor with long term contracts with the entity

15. These users require information on risk and return provided by their investment.
A. Investors
B. Employees
C. Lenders
D. Customers

16. These users are interested in information about the profitability and stability of the entity in order to
assess the ability of entity to provide remuneration, retirement benefits and employment opportunities.
A. Customers
B. The public
C. Governments and their agencies
D. Employees

17. These users are interested in information that enables them to assess whether their loans, the related
interest thereon, and other amounts owing to them will be paid when due.
A. Lenders and other creditors
B. Borrowers
C. Trade creditors
D. Owners
18. These users are interested in information about the continuance of an entity, especially when they have a
long-term involvement with or are dependent on the entity.
A. Customers
B. Employees
C. Trade unions
D. Suppliers

19. These users are interested in information in order to regulate the activities of an entity, determine
taxation policies and provide a basis for national statistics.
A. Governments and their agencies
B. Major organization of users
C. Bureau of Internal revenue
D. Department of Finance

20. These users need information on trends and recent developments where an entity makes a substantial
contribution to the local economy providing employment and using local suppliers.
A. The public
B. Governments and their agencies
C. Finance entities
D. Private entities

21. Which statement is correct in relation to information needs?

I. Information that meets the needs of specified primary user, such as management, is likely to meet the
needs of other users, such as employees, customers, government regulatory agencies, and the public.
II. The management is also interested in financial information but it need not rely on general purpose
financial reports because it can access additional information internally.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
Financial Information
22. Which users need financial information to enable them to assess the ability of the enterprise to provide
remuneration, retirement benefits and employment opportunities?
A. Customers
B. Government and its agencies
C. Employees
D. Investors
23. Which users need financial information to help them determine whether they should buy, hold or sell
their interests in an enterprise?
A. Investors
B. Customers
C. Government
D. The public
24. Bookkeeping is:
A. Less broad in scope than accounting
B. Broader in scope than accounting
C. The same as accounting
D. Not related to accounting
25. Which of the following is not an external decision maker?
A. Present stockholder
B. Managers of a business entity
C. Legislators of the country
D. Trade creditors
26. The procedural element of accounting is
A. Auditing
B. Accounting
C. Bookkeeping
D. Managerial accounting
27. The International Accounting Standards Board was formed to
A. Enforce IFRS in foreign countries
B. Develop worldwide accounting standards
C. Establish accounting standards for multinational entities
D. Develop accounting standards for countries that do not have their own standard setting bodies
28. The basic purpose of accounting is
A. To provide the information that the managers of an economic entity need to control its operations
B. To provide information that the creditors of an economic entity can use in deciding whether to make
additional loans to the entity
C. To measure the periodic income of the economic entity
D. To provide quantitative financial information about a business enterprise that is useful in making
rational economic decision
29. 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 the data users is called
A. Basic accounting assumptions
B. Qualitative characteristics
C. Generally accepted accounting principles
D. Qualitative objectives
30. A businessman owns an advertising company and a printing business. Based on this given situation,
which concept supports the idea that there are three separate persons with separate assets, liabilities, income
and expenses?
A. Periodicity principle
B. Business entity principle
C. Matching concept
D. Concept of equality of value received and value given up

1. Accounting is a service activity its function is to provide quantitative information, primarily financial
nature, about economic entities, that is intended to be useful in making economic decisions
 A. Accounting Standards Council (ASC)
B. AICPA Committee on Accounting Terminology
C. Philippines Association of CPAs (PICPA)
D. Board of Accountancy
2. The basic purpose of accounting is
A. To provide the information that the managers of an economic entity need to control its operations
B. To provide information that the creditors of an economic entity can use in deciding whether to make
additional loans to the entity.
C. To measure the periodic income of the economic entity
D. To provide quantitative financial information about an entity that is useful in making rational
economic decision.
3. The term "recognized" is synonymous with the term
A. Recorded
B. Realized
C. Matched
D. Allocated
4. What function do accounting journals serve in the accounting process
A. Classifying
B. Summarizing
C. Reporting
D. Recording
5. What function does general ledger serve in accounting process
A. Classifying
B. Summarizing
C. Reporting
D. Recording
Accounting standards
6. It is the body authorized by the law to promulgate rules and regulations affecting practice of the
accountancy profession in the Philippines
A. Board of Accountancy (BOA)
B. PICPA
C. Securities of Exchange and Commission (SEC)
D. Financial Reporting Standards Council (FRSC)
7. What is the law regulating the practice of Accountancy in the Philippines
A. R.A. No. 9128
B. R.A. No. 9928
C. R.A. No. 9298
D. R.A. No. 9892
8. It is the standard setting body in the Philippines.
A. ASC
B. Auditing and Assurance Standards Council (AASC)
C. Philippine Accounting Standards Board (PASB)
D. FRSC
9. The Philippine Financial Reporting Standards (PFRS) collectively include
A. PFRS corresponding to International Financial reporting Standards (IFRS)
B. Philippines Auditing Standard (PAS) corresponding to PAS
C. Philippines Interpretations corresponding to IFRIC and SIC interpretations and interpretations
developed by PIC.
D. All of the above.
10. Who is the primarily responsible for the financial statements?
A. The Philippines SEC
B. The Accountant
C. The Company's Management
D. The Company's Independent Auditor
11. The measurement stage of accounting is accomplished by
A. storing data.
B. reporting to decision makers.
C. recording data
D. processing data
12. On a periodic basis, the accountant is required by owners to prepare reports containing financial
information on the status and performance of the business. Information is obtained from the accounting
records and reports, known as ________ are prepared.
A. annual reports
B. financial information
C. financial plans
D. financial statements
13. The are four sectors in the practice of accountancy in the Philippines. Which is not a sector of the said
profession?
A. Education
B. Commerce and Industry
C. Public Practice
D. Internal audit
14. This refers to those who hold a valid certificate issued by the Boards of Accountancy, whether they be in
public practice, industry, public sector or education.
A. audit associate
B. senior accounting practitioner
C. professional accountant
D. accounting professor
15. This accounting organization aims to promulgate and improve accounting standards that will constitute
GAAP in the Philippines.
A. Philippine Institute of Certified Public Accountant
B. The Professional Regulatory Board of Accountancy
C. Professional Regulatory Commission
D. Financial Reporting Standards Council
16. The FRCS Framework for the Preparation and Presentation of Financial Statements mentions the
following underlying assumptions:
A. Accrual basis and going concern
B. Accrual basis and the entity concept
C. Going concern and periodicity
D. Entity concept and periodicity

Branches of Accounting
17. Financial accounting is concerned with
A. General purpose reports on financial position and financial performance
B. Specialized reports for inventory management and control
C. Specialized reports for income tax computation and recognition
D. General purpose report on changes in stock prices and future estimates of market position
18. Financial Accounting can be broadly defined as the area of accounting that prepares
A. General purpose financial statements to be used by parties internal to the entity only
B. Financial statements to be used by the inventors only
C. General purpose financial statements to be used by parties both internal and external to the entity
D. Financial statements to be used primarily by management
19. Financial accounting is the area of accounting that emphasizes reporting to
A. Management.
B. Regulator bodies.
C. Internal auditors.
D. Creditors and investors.
20. Managerial accounting is the area of accounting that emphasizes
A. Reporting financial information to external users.
B. Reporting to the SEC.
C. Combining accounting knowledge with an expertise in data processing.
D. Developing accounting information for use within an entity.
21. This is the traditional service rendered by CPAs in public practice.
A. management consultancy
B. independent audit
C. compilation
D. agreed upon audit procedures
22. This is the branch of accounting that is concerned primarily with the preparation of general purpose
financial statements.
A. Managerial accounting
B. Financial accounting
C. Cost accounting
D. Auditing
23. This is the branch of accounting that is concerned primarily with the provision of information for internal
users.
A. Managerial accounting
B. Financial accounting
C. Cost accounting
D. Auditing
24. This involves providing services to clients on matters of accounting, finance, business policies,
organization procedures, budgeting, product costing, and the conduct of operations.
A. Assurance services
B. Management consulting
C. Audit services
D. Variance analysis

Financial Statements
25. The financial accounting process is guided by
A. the information needs of statement users.
B. enterprise management.
C. broad operating principles of accounting.
D. the firm’s chart of accounts.
26. The statement of cash flows is
A. a financial statement showing revenues earned by the enterprise, the expenses incurred in earning the
revenues, and the resulting net income or net loss.
B. another name for the statement of financial position.
C. a financial statement showing the cash inflows and outflows for an accounting period.
D. a financial statement that reports the assets, liabilities, and equity of an enterprise on a specific date.
27. This is the financial statement that shows the assets, liabilities, and owner’s equity of the business as of
a given date.
A. Statement of Profit or Loss
B. Statement of Cash Flows
C. Statement of Financial Condition
D. Statement of Changes in Equity
28. Which does not belong to the group?
A. Revenue and expenses
B. Assets
C. Liabilities
D. Equity

Qualitative Characteristics
29. It is assumed that the enterprise has neither the intention nor the need to liquidate or curtail materially the
scale of its operations.
A. Accrual basis
B. Going concern
C. Both a and b
D. Neither a nor b
30. Under this basis, the effects of transactions and other events are recognized when they occur and they are
recorded in the accounting records and reported in the financial statements and the periods to which they
relate.
A. Accrual basis
B. Going concern
C. Both a and b
D. Neither a nor b
31. AFB, a proprietor, maintains two bank accounts: one in his personal name, and the other in the name of
his business, the AFB Pawn Shop. Which of the following concepts would be violated if AFB includes both
accounts as part of the assets of the business?

A. Accrual concept
B. Entity concept
C. Going concern concept
D. There is no violation
32. An enterprise is assumed to be going concern and will continue in operation for the foreseeable future.
For accounting purposes, the life of the enterprise is divided into shorter periods of equal length. How long is
the traditional accounting period?
A. 30 days
B. 90 days
C. 180 days
D. 12 months
33. This is the inclusion of a degree of caution in the exercise of judgement needed in making the estimates
required under the conditions uncertainty.
A. Faithful presentation
B. Substance over form
C. Neutrality
D. Prudence
34. Under prudence, care should be taken such that
A. Assets or income are not understated, and liabilities or expenses are not overstated.
B. Assets or income are not overstated, and liabilities or expenses are not understated.
C. Assets or income are not understated, and liabilities or expenses are not understated.
 D. Assets or income are not overstated, and liabilities or expenses are not overstated.
35. Income is recognized when
A. It is probable that future economic benefits will flow from the enterprise.
B. A request for services has been received from a client.
C. It is probable that future economic benefits will flow from the enterprise, and the future economis
benefits can be measured reliably.
D. An order for goods has been received from a customer.
36. Accrual basis of accounting
A. results in higher income than cash basis accounting.
B. leads to the reporting of more complete and more accurate information.
C. is not acceptable under GAAP.
D. diregards adjusting entries at the end of the period.
37. Under the revenue recognition principle, revenue is recorded
A. at the earliest time possible.
B. at the latest acceptable time.
C. after it has been earned.
D. at the end of the accounting period.
38. Which of the following characteristics relate to the fundamental qualitative presentation of financial
statements?

A B C D
Relevance Yes Yes No Yes
Reliability Yes Yes No No
Faithful representation No No Yes Yes
Comparability Yes No Yes No

39. Tbe financial statements should be stated in terms of a common financial denominator.
A. accrual
B. going concern
C. time period
D. monetary unit
40. The objectives of financial reporting are based on
A. The need for conservatism.
B. Reporting on management’s stewardship.
C. International Financial Reporting Standards.
D. The needs of the users of the information.
41. An essential quality of the information provided in financial statements is that it is readily understandable
by the users. For this purpose users are:
I. Assumed to have reasonable knowledge of business economic activities and accounting: and
willingness to study the information with reasonable diligence.
II. Informed of the accounting policies employed, any changes in those policies and the effects of such
changes.

A. I only
B. II only
C. Both I and II
D. Neither I or 2
42. Information has the quality of relevance:
I. When it influences the economic decision of users by helping them evaluate past, present and future
events or confirming or correcting their past evaluations.
 II. When it is free from material error and bias and can be depended upon by users to represent
faithfully that which purports to represent or could reasonably expected to represent.

A. I only
B. II only
C. Both I and II
D. Neither I nor II
43. Which statement is incorrect concerning relevance?
A. The information in financial statements must be within the bounds of materiality and cost.
B. To be useful, information must be relevant the decision making needs of users
C. Information about financial position and past performance is frequently used as basis in predicting
future financial position and performance and other matters such as dividend and wage payment and
ability of entity to meet its financial commitments as they fall due
D. The predictive and confirmatory roles of information are not interrelated
44. Which statement is incorrect concerning reliability?
A. The information in financial statements must be within the bounds of materiality and cost
B. To be reliable, the information must represent faithfully the transactions and other events it either
purports to represent or could reasonably be expected to represent.
C. The information should be accounted for in accordance with their substance and economic reality
and not merely legal form
D. Prudence is the inclusion of a degree of caution in the exercise of judgment needed in making an
estimate required under conditions of uncertainty, such that assets or income are overstated and
liabilities or expenses are understated
45. An item would be considered material or therefore would be disclosed in the financial statements if
A. The expected benefits of disclosure exceed the additional costs
B. The impact on earnings is greater than 10 %
C. The FRSC definition of materiality is met
D. The commission or misstatement of the amount would make a difference to the users
46. Financial information exhibits consistency when
A. Accounting procedures are adopted with smooth net income and make results consistent between
years
B. Gains and losses are shown separately on the income statement
C. Accounting entities give similar events, the same accounting treatment each period
D. Expenditures are reported as expenses and netted against revenue in the period in which they are
paid
47. When information about two different entities engage in the same industry has been prepared and
presented in similar manner, the information exhibits the qualitative characteristics of
A. relevance
B. reliability
C. Consistency
D. Comparability
48. The principle of objectivity includes the concept of
A. Verifiability
B. Classification
C. Conservation
D. Identification
49. What are the characteristics of financial information?
A. Qualitative characteristics are attributes that make information provided in financial statements
useful to users
B. Qualitative characteristics are broad classes of financial effects of transactions and other events
 C. Qualitative characteristics are non-qualitative aspects of entity’s financial position and performance
and changes in financial position
D. Qualitative characteristics measure the extent to which an entity has complied with all relevant
standards and interpretations
50. The “Fundamental Qualitative” characteristics are:
A. Relevance and faithful representation
B. Relevance, faithful representation and materiality
C. Relevance and reliability
D. Faithful representation and materiality
51. What is the meaning of “relevance”?
I. The capacity of the information to make a difference in the decision made by users.
II. The Financial reports represent economic phenomena or transaction in words and numbers.

A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.

52. The ingredients of relevant financial information are

A. Predictive value and confirmatory value.
B. Predictive value and confirmatory value and timelessness.
C. Predictive value and confirmatory value and materiality.
D. Predictive value and confirmatory value, timelessness and materiality.
53. Which statement is incorrect concerning materiality?
A. Information is material if its omission or misstatement could influence the economic decisions that
users make on the basis of the financial information about the entities.
B. Materiality depends on the relative size of the item or error judged in the particular circumstances of
its omission or misstatement.
C. Materiality is fundamental qualitative characteristic rather than a threshold or cut-off point in
determining useful information.
D. Materiality is dependent on professional judgment because no threshold limit is defines in the
Conceptual Framework.
54. Which of the following description of “faithful representation” in relation to information in financial
statements?
A. Influence on the economic decisions of users.
B. Inclusion of a degree of caution.
C. Freedom from material error.
D. Comprehensibility to users.
55. The ingredient of faithful representation are
A. Completeness and neutrality
B. Completeness and free from error.
C. Completeness, neutrality and free from error.
D. Completeness, neutrality, free from error and conservation.
56. Which of the following qualitative characteristics of financial information requires that information shall
not be biased in favour of one group of users to the detriment of others?
A. Relevance
B. Free from error
C. Completeness
D. Neutrality
57. In the event of conflict between the economic substance of a transaction and its legal form, the economic
substance shall prevail.
A. Form over substance
B. Substance over form
C. Relevance
D. Completeness
58. It is the exercise of care an caution in dealing with uncertainties in measurement so as not to overstate
assets and income and not to understate liabilities and expenses.
A. Completeness
B. Prudence
C. Faithful representation
D. Neutrality
Professional opportunities
59. An example of career opportunities in commerce and industry
A. Partner
B. Chief financial officer
C. National treasurer
D. Vice-president for Academic affairs
60. Which of the following is not a career path of an accountant in the education sector?
A. Dean
B. Faculty member
C. Vice-president for Acadamecs
D. President
61. Which of the following does not relate to career path in public accounting?
A. Junior auditor, senior auditor, manager, partner, managing partner
B. Assistant, advisor, managing partner
C. Partner, managing partner, executive partner
D. Accounting aide, supervisor, manager, vice-president, president, chairman of the board

Writing Task No. 5

DESCRIPTION
Writing Task No. 6
DEFINITION
Writing Task No. 7
EXEMPLIFICATION
Writing
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 Writing Task No. 11
DIVISION & CLASSIFICATION

Writing Task No. 11

DIVISION & CLASSIFICATION

Writing Task No. 12

PROBLEM–SOLUTION

Writing Task No. 13

PERSUASION