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of comprehensive income?
J. Revenues
P. Expenses
I. Losses
A. Distribution to owners
Ans: A. Distribution to owners
2. When there is much variability, the operating cycle is measured at
J. The mean value
P. The median value
I. Twelve months
A. Three years
Ans: I. twelve months
3. According to the conceptual framework, the process of reporting an
item in the financial statements of an entity is
J. Realization
P. Recognition
I. Matching
A. Allocation
Ans: P. Recognition
4. How would proceeds received in advance from the sale of
nonrefundable tickets for the Super
Bowl be reported in the seller’s financial statements published before
the Super Bowl?
J. Understated income
P. Understated assets
I. Overstated expenses
A. Overstated assets
Ans: A. overstated assets
10. A change in reporting entity is actually a change in:
J. Accounting policy
P. Accounting estimate
I. Accounting method
A. Accounting concept
Ans: J Accounting policy
11. Financial statements issued for the use of parties external to the
enterprise are the primary responsibility of the
J. Management enterprise
P. Stockholders of the enterprise
I. Independent auditors of the enterprise
A. Creditors of the enterprise
Ans: J. Management of t he enterprise
12. Conservatism is best described as selecting an accounting
alternative that
J. Comparability
P. Understandability
I. Materiality
A. Relevance
Ans: I. Materiality
• 15. The passage of time as a mode of acquiring or losing a right
including the extinguishment of an obligation is called?
J. Remission
P. Novation
I. Prescription
A. Merger
Ans: I. prescription
16. Which of the following is not a purpose of the conceptual
framework of accounting?
A. Amortizing research and development costs over multiple periods is justifiable and appropriate.
Ans: A. Amortizing research and development
costs over multiple periods is justifiable and
appropriate.
19. Revenue from an artistic performance is recognized once
J. Objectivity Principle
P. Reliability Principle
I. Going concern
A. Accrual assumption
Ans:
J. Objectivity Principle
25. Who is the current BIR Commissioner?
J. Celay Dulay
P. Caesar Dulay
I. Cesar Dulay
A. Cilay Dulay
Ans: I. Cesar Dulay
26. Which one of the following items would fall under the definition of
a liability?
J. Cash
P. Debtors
I. Owner’s equity
A. Tax owed
Ans: A. Tax owed
27.Accounting entries involve a minimum of how many accounts?
J. One
P. Two
I. Three
A. Four
Ans: P. Two
28. The personal assets of the owner of a company will not appear on
the company's balance sheet
because of which principle/guideline?
J. Cost
P. Economic Entity
I. Monetary Unit
A. Going Concern
Ans: P. Economic Entity
29. Which principle/guideline allows a company to ignore the change in
the purchasing power
of the dollar over time?
J. Cost
P. Economic Entity
I. Monetary Unit
A. Going Concern
Ans: I. Monetary Unit
30. Which principle/guideline requires the company's financial
statements to have footnotes containing information that is important
to users of the financial statements?
J. Conservatism
P. Economic Entity
I. Full Disclosure
A. Reliability
Ans: I. Full Disclosure
31. Which principle/guideline is associated with the assumption that
the company will continue on long enough to carry out its objectives
and commitments?
J. Economic Entity
P. Going Concern
I. Time Period
A. Monetary Unit
Ans: P. Going Concern
32. A very large corporation's financial statements have the dollar
amounts rounded to the nearest $1,000. Which accounting
principle/guideline justifies not reporting the amounts to the penny?
J. Full Disclosure
P. Materiality
I. Monetary Unit
A. Time period
Ans: P. Materiality