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Fundamental of Accounting, Business and Management 1

NAME : ____________________________________ SCORE : _______________

GRADE : ____________________________________ DATE : _______________

I. TRUE OR FALSE : Encircle T if the statement is true, F if it is false.

T F 1. External Auditing deals with determining the operational efficiency whether the financial statements
Are presented fairly and in compliance with accounting standard.
T F 2. Statements are presented fairly and in compliance with accounting standards.
T F 3. The financial statements of a company should always be prepared in accordance with the generally
accepted accounting principles.
T F 4. The financial reports that direct management’s attention are the examples of control
T F 5. Accounting information are needed by the management only.
T F 6. Accounting Education “ addresses all aspects of the accounting information” using a scientific
T F 7. Government Accounting deals with Taxes paid by government, the recording and of Inflow and
outflow of funds of the government.
T F 8. Internal Accounting is a service provided by public accounting.
T F 9. External users are individuals and organizations outside the company who want work Information
about the company.
T F 10. Managers, employees and owners are examples of external users.

II. MULTIPLE CHOICE – Read and understand the sentences and questions. Choose the correct answer by writing the
corresponding letter of the correct answer on your answer sheets:

_______ 11. Evaluate whether a branch of the business complies with the collection and deposit policy of the
A. Internal Accounting C. External Accounting
B. Managerial Accounting D. Tax Accounting

_______ 12. Sometimes considered as the subset of Management Accounting.

A. Accounting Education C. Cost Accounting
B. Financial Accounting D. All of the above

_______ 13. Financial reports needed of Financial Accounting.

A. Statement of Financial Condition C. Statement of cash flows
B. Income statement D. All of the above

_______ 14. Analyse the feasibility of investing in a company to encur they can earn a reasonable return on their
A. Creditors B. Customers C. Investors D. Regulatory Authorities

_______15. What information will that Management need that can be answered by accounting?
A. Income B. Sales C. Available cash D. All of the above

_______16. What is the number of the possible owners of Corporations?

A. 1 B. 2 or more C. 5 D. 5 or more

_______ 17. Government agency assigned primarily to regulate Partnership.

A. CDA B. In limited capacity, DTI C. BIR D SEC
_______18. What is the cause of termination of the Business of Partnership?
A. Death of any partnership C. Death of the owner
B. Withdrawal of a partner D. Both A & B

_______ 19. Enjoys certain tax exemption privilege.

A. Sole Proprietorship B. Corporations C. Cooperatives D. Partnership

_______ 20. Simon wanted to start His dream sari-sari store business, The Capital needed is 50,000 PhP. He
only have 25,000Php cash savings. Juan offer to invest t his 25,000PhP and become part
owner of the sari-sari store. Assuming he agrees, The form of business organizations created is
A. Sole Proprietorship C. Corporations
B. Partnership D. Incorporations

21-30 - Choose the correct answer below. Identify the type of business operations provided:

A. Service B. Merchandising C. Manufacturing D. Hybrid

_______ 21. Bakery

_______ 22. Combine raw materials in making loaves of bread, sells hot pan de sal and caters customers’
Orders in a small coffee table servings of ensaymada and hot coffee.
_______ 23. Tutorial Services
_______ 24. Sells goods to customers
_______ 25. Sari-sari store
_______ 26. Supplies are used, no goods to be sold
_______ 27. Raw materials are available
_______ 28. ACE hardware
_______ 29. Water Refill Station.
_______ 30. Jollibee

II. MATCHING TYPE – Match each term with its definition by writing the appropriate letter in the blank:

A. Going concern principle E. Time period principle H. Monetary unit principle

B. Objectivity principle F. Cost Principle I. Accrual accounting principle
C. Matching principle G. Disclosure principle J. Conservatism principle
D. Materiality principle

______ 31. All relevant information should be included in the financial reports.
______ 32. In case of doubt, assets and income should not be overstated
______ 33. Assume that the company will continue indefinitely.
______ 34. All transactions should be supported by unbiased evidence.
______ 35. Expenses should be recorded in the period when the revenue is generated.
______ 36. Minimal costs incurred should be recorded as an expenses.
______ 37. A Philippine company should report financial statement in pesos.
______ 38. A barber who performs services for a client should record revenue.
______ 39. Statement of Financial position should be recorded as of December 31, 2018.
______ 40. A company that purchases furniture should record it at its acquisition price.

III. SHORT ESSAYS : Discuss briefly ( one to two paragraphs) at the back of this sheet. Read the prompt directions
carefully. ( 5 points each )

41-45 Make an essay explaining why ACCOUNTING often referred to as a language of business ?

46-50 Is accounting important to you? Does it affect your daily activities? How?
“No amount of exams will prepare you for life.”
― Anthony T. Hincks




Republic of the Philippines

Region V-Bicol
Division of Masbate
Gangao, Baleno, Masbate
1st Semester, S/Y 2018-2019
Fundamental of Accounting, Business and Management 1


1. F 11. A 21. C 31. G
2. T 12. C 22. D 32. J
3. T 13. D 23. A 33. A
4. T 14. A 24. B 34. B
5 F 15. D 25. B 35. C
6 F 16. C 26. A 36. D
7 F 17. B 27. C 37. H
8 F 18. D 28. B 38. I
9 T 19. C 29. A OR C 39. E
10. F 20. B 30. D 40. F