Theory of Accounts 1-1

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1. Accounting is a service activity and its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision. This accounting definition is given by:

a. Accounting Standard Council   b. AICPA Committee on Accounting Terminology  c. American Accounting Association 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. Which accounting process is the recognition or nonrecognition of business activities as accountable events.
a. Identifying
b. Measuring
c. Recording
d. Communicating

4. These are the events that affect the entity and in which other entities participate
a. Internal events
b. External events
c. Current events
d. Past events

5. The communicating process of accounting includes all of the following except

a. Recording

b. Classifying

c. Summarizing

d. Interpreting

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

a. R.A. No. 9298

b. R.A. No. 9198

c. R.A. No. 9928

d. R.A. No. 9892

7. 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. Philippine Institute of Certified Public Accountants
c. Securities and Exchange Commission
d. Financial Reporting Standards Council

8. Many accountants are employed in entities in various capacity as accounting staff, chief accountant or controller. These accountants are said to be engaged in

a. Public accounting
b. Private accounting
c. Government accounting
d. Financial accounting

9. It is the accounting standard setting body created by PRC  upon recommendation of the Board of Accountancy to assist the Board of Accountancy in carrying out its powers and functions under R.A. No. 9298

a. Accounting Standards Council
b. Auditing and Assurance Standards Council
c. Philippine Accounting Standards Board
d. Financial Reporting Standards Council

10. Which is not required to be represented in the FRSC ?

a. Bangko Sentral ng Pilipinas
b. Bureau of Internal Revenue
c. Commission on Audit
d. Department of Budget and Management


Answers:
1. a
2. d
3. a
4. b
5. d
6. a
7. a
8. b
9. d
10. d

Questions are lifted from the following sources: PHILCPA,AICPA,IAA,ACP,PAS,PFRS,IAS,IFRS