PHINMA UNIVERSITY OF PANGASINAN

ACC103 Conceptual Framework & Accounting Standards

P1 - QUIZ 1

NAME: _______________________________________

SECTION: _____________________________________

Encircle the letter of your answer. ERASURES are considered wrong. Any form of cheating is PROHIBITED and will be dealt in
accordance with the University Student Manual.

1. Accounting is the art of recording, classifying, and summarizing, in a significant manner and in terms of money, transactions
and events which are, in part at least, of a financial character, and interpreting the results thereof. This accounting definition is
published by

a. ASC

b. AAA

c. PICPA

d. AICPA

2. Accounting is the process of identifying, measuring and communicating economic information to permit informed judgments
and decisions by users of information. This definition is published by

a. ASC

b. AAA

c. AICPA

d. PICPA

3. Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about
economic entities that is intended to be useful in making economic decisions.

a. ASC

b. AAA

c. AICPA

d. PICPA
4. _______ defines accounting as a system that measures business activities, processes given information into reports and
communicates findings to decision makers.

a. ASC

b. AAA

c. PICPA

d. AICPA

5. Which statement is incorrect in relation to the practice of public accounting?

a. Single practitioners for the practice of public accounting shall be registered CPAs in the Philippines.

b. The Securities and Exchange Commission can register any corporation organized for the practice of public accounting.

c. Partners of partnership formed for the practice of public accounting shall be registered CPAs in the Philippines.

d. The Professional Regulation Commission upon favorable recommendation of the Board of Accountancy shall issue certificate
of accreditation to CPAs in public practice provided the registrant has acquired a minimum of three years of meaningful
experience in public practice

6. Which body has sole responsibility and authority to issue an International Financial Reporting Standard?

a. the International Financial Reporting Standards Foundation

b. the International Accounting Standards Board

c. the International Financial Reporting Standards Interpretations Committee

d. the IFRS Advisory Council

7. Which body provides guidance on financial reporting issues that are not specifically addressed in IFRS?

a. the International Financial Reporting Standards Foundation

b. the International Accounting Standards Board

c. the International Financial Reporting Standards Interpretations Committee

d. the IFRS Advisory Council

8. What is the objective of the International Accounting Standards Board?

a. to harmonize International Financial Reporting Standards with national accounting standards

b. to develop, in the public interest, a single set of high quality, understandable global accounting standards

c. to create accounting standards which meet the needs of emerging economies

d. to provide a form for participation by other interested parties that require transparent and comparable information

9. What is the law regulating the practice of accountancy in the Philippines?

b. R.A. NO. 9928

c. R.A. NO. 9198

d. R.A. NO. 9892

10. It is the body authorized by law to promulgate rules and regulations affecting the practice of the accountancy profession in
the Philippines.

a. Board of Accountancy

b. Securities and Exchange Commission

c. Philippine Institute of Certified Public Accountancy

d. Financial Reporting Standards Council

11. It is the first process used in accounting. It refers to the identification of events as to whether they are recognized or not in
the financial statements.

a. Identifying

b. Measuring

c. Communicating

d. Auditing

12. Events involving an entity and an external party.

a. External events

b. Non-reciprocal transfers

c. External events other than transfers

d. Internal events

13. Financial accounting applies to which of the following:

a. Businesses

b. Non-profit organizations

c. Government

d. All of these

14. The function of measuring and reporting information to absentee investors is called the:

a. Accounting function

b. Stewardship function
c. Auditing function

d. Management function

15. The primary objective of financial reporting is to provide information:

a. About a firm’s financing and investing activities

b. About a firm’s economic resources and obligations

c. About a firm’s products and services

d. Useful in predicting cash flows

16. In the conceptual framework for financial reporting, what provides "the why"--the purpose of accounting?

a. Recognition, measurement, and disclosure concepts such as assumptions, principles, and constraints

b. Qualitative characteristics of accounting information

c. Elements of financial statements

d. Objective of financial reporting

17. The underlying theme of the conceptual framework is

a. Decision usefulness.

b. Understandability.

c. Faithful representation.

d. Comparability.

18. The objective of general-purpose financial reporting is to provide financial information about a reporting entity to each of
the following except

a. Potential equity investors.

b. Potential lenders.

c. Present investors.

d. All of these answers are correct.

19. The objective of general-purpose financial reporting is?

a. To provide financial information about the reporting entity that is useful to present and potential equity investors, lenders,
and other creditors in making decisions in their capacity as capital providers

b. To provide companies with the option to select information that favours one set of interested parties over another

c. To provide users with financial information that implies total freedom from error.
d. To provide a metric for financial information used to determine when the boundary between two or more entities should be
disregarded and the entities considered to be a licensing arrangement.

20. Which of the following is a characteristic describing the fundamental quality of relevance?

a. Predictive value.

b. Neutrality.

c. Verifiability.

d. Understandability.

21. Which of the following statements is false?

a. Accountable events are those that have an effect on an entity's assets, liabilities, equity, income or expenses.

b. The term “recognition” as used in accounting refers to the process of incorporating the effects of an accountable event in the
statement of financial position or the statement of profit or loss and other comprehensive income through a memo entry.

c. External events are those that involve the reporting entity and an external party.

d. The Board of Accountancy consists of a chairperson and six members.

22. Which of the following statements is true?

a. In current practice, accounting provides only quantitative information that is useful in making economic decisions.

b. External users are those who do not have the authority to demand financial reports tailored to their specific needs.

c. Under the stable monetary unit assumption, the owners of the business and the business are viewed as a single reporting
entity. Therefore, the personal transactions of the owners are recorded in the books of accounts.

d. The practice of accountancy in the Philippines is regulated under R.A. 9892.

23. Which of the following statements correctly refer to the accounting process?

I. Measuring is the accounting process of analyzing business activities as to whether or not they will be recognized in the books.

II. Recognition refers to the process of including the effects of an event in the totals of the statement of financial position or the
statement of profit or loss and other comprehensive income through memo entries.

III.Disclosure of events in the notes to financial statements without including their effect in the totals of the statement of
financial position or statement of profit or loss and other comprehensive income is not an application of the recognition
principle.

IV. An accountable event is an event that has an effect on the assets, liabilities or equity of an entity and its effect can be
measured reliably.

V. Sociological and psychological matters are within the scope of accounting.

a. I, II, III, IV and V

b. I, II, III and IV

d. III and IV

24. Which of the following statements is true?

I. Loss from theft is classified as a nonreciprocal transfer.

II. Internal events are changes in economic resources by actions of other entities that do not involve transfers of resources and
obligations.

III. Nonreciprocal transfers involve the transfer of resources in only one direction, either from an entity to other entities or from
other entities to the entity.

IV. Internal events are sudden, substantial, unanticipated reductions in resources not caused by other entities.

V. Fire, earthquake and flood are examples of accountable events classified as internal events.

a. I, II, III and V

b. I, III and V

c. II, III, IV and V

d. I, III, IV and V

25. Asset measurements in conventional financial statements

a. are confined to historical cost.

b. are confined to historical cost and current cost.

c. reflect several financial attributes.

d. do not reflect output values.

-NOTHING FOLLOWS-

“Just believe in yourself. Even if you don’t, pretend that you do and, at some point, you will.”