Lesson 1

Question 1

They are formal records summarizing a company’s financial performance, position, and cash flows for a specific period, used by stakeholders for decision-making.

Answer 1

Financial Statements

Question 2

Types of FS:

Answer 2

Income Statement
Changes in Equity
Balance Sheet

Question 3

A kind of output one expects from financial reports.

Answer 3

Quantitative

Question 4

Phases of Accounting:

Answer 4

Recording
Classifying
Summarizing
Interpreting

Question 5

Sectors of Accounting:

Answer 5

Public
Private/Commerce & Industry
Government
Academe/Education

Question 6

Philippine law of Accountancy, also known as Philippine Accountancy Act of 2004.

Answer 6

RA 9298

Question 7

Who signed the RA 9298?

Answer 7

Gloria Macapagal Arroyo

Question 8

CPD units required for license renewal.

Answer 8

15

Question 9

CPD units required for accreditation to practice public accountancy.

Answer 9

120

Question 10

Highest position in private accounting.

Answer 10

Controller

Question 11

CPD stands for…

Answer 11

Continuing Professional Development

Question 12

Processes of Accounting:

Answer 12

Identifying
Measuring
Communicating

Question 13

It is an activity providing quantitative information to utilize in economic decision-making.

Answer 13

Accounting

Question 14

Highest position in Public Accounting:

Answer 14

Partner

Question 15

Highest position in Academic Accounting:

Answer 15

Professor

Question 16

What is the standard-setting body of accountancy in an international level?

Answer 16

IASB

Question 17

What does IASB mean?

Answer 17

International Accounting Standards Board

Question 18

Older version of IASB:

Answer 18

IASC

Question 19

What does IASC mean?

Answer 19

International Accounting Standards Committee

Question 20

Accounting standards of IASB:

Answer 20

IFRS
IAS
IFRIC Interpretations

Question 21

What does IFRS mean?

Answer 21

International Financial Reporting Standards

Question 22

What does IAS mean?

Answer 22

International Accounting Standards

Question 23

In between IFRS and IAS: which of them is the newer standards, and the older standards?

Answer 23

IFRS is the Newer
IAS is the Older

Question 24

It is a type of IASB standards used when there are no available standards:

Answer 24

IFRIC Interpretations

Question 25

What does IFRIC mean in IFRIC Interpretations?

Answer 25

International Financial Reporting Interpretations Committee

Question 26

What is the local standard-setting body of the Philippines?

Answer 26

FRSC

Question 27

What does FRSC mean?

Answer 27

Financial Reporting Standards Council

Question 28

What is the older version of FRSC?

Answer 28

ASC

Question 29

What does ASC mean?

Answer 29

Accounting Standards Council

Question 30

What is the newer version of FRSC?

Answer 30

FSRSC

Question 31

What does FSRSC mean?

Answer 31

Financial Sustainability Reporting Standards Council

Question 32

What is the overall objective of accounting? a. To measure the periodic income of the economic entity. b. To provide information that the creditors can use in deciding whether to grant loans to an entity. c. To provide the information that the managers of an economic entity need to control decision the operations. d. To provide quantitative financial information about an entity that is useful in making economic decisions.

Answer 32

D. To provide quantitative financial information about an entity that is useful in making economic decisions. (All choices are true, but what was asked is the *overall objective,* the whole summary/core definition of Accounting.)

Question 33

Determine whether the following statements is true or false. I. FRSC members are appointed by PRC with a term of 3 years renewable for another 3 years. II. PIC members are appointed by PRC. III. All sectors of the accountancy profession are represented in FRSC but majority of which came from Public Practice. IV. FRSC members render services on a part-time basis and receive financial support from the Bangko Sentral ng Pilipinas. a. True, False, False, False b. True, True, False, False c. True, False, False, True d. True, True, True, True

Answer 33

A. True, False, False, False

Question 34

"PIC members are appointed by PRC." True or False? If False, why?

Answer 34

False: PIC members are appointed by FSRSC.

Question 35

"All sectors of the accountancy profession are represented in FRSC, but majority of which came from Public Practice." True or False? If False, why?

Answer 35

False: "Majority of which came from Public Service" is **false**. All sectors are equally divided.

Question 36

"FRSC members render services on a part-time basis and receive financial support from the Bangko Sentral ng Pilipinas." True or False? If False, why?

Answer 36

False: FRSC members don't receive financial support; no compensation.

Question 37

The process of establishing financial accounting standards... a. Is a democratic process in that majority of practicing accountants must agree with a standard before it is implemented. b. Is a legislative process based on rules promulgated by government agencies. c. Is based solely on economic analysis of the effects each standard will have if implemented. d. Is a social process which it incorporates political actions of various interested user groups as well as professional research and logic.

Answer 37

D. Is a social process which it incorporates political actions of various interested user groups as well as professional research and logic.

Question 38

Which of the following is the accounting standard-setting body in the Philippines at the present time? a. ASC b. AASC c. PASB d. FRSC

Answer 38

D. FRSC

Question 39

What is the chronological order in the evaluation of a typical standard? a. Exposure Draft – Standard – Discussion Paper b. Exposure Draft – Discussion Paper – Standard c. Standard – Discussion Paper – Exposure Draft d. Discussion Paper – Exposure Draft – Standard

Answer 39

D. Discussion Paper – Exposure Draft – Standard

Question 40

What does PAS mean?

Answer 40

Philippine Accounting Standards

Question 41

What does PIC Interpretations mean?

Answer 41

Philippine Interpretations Committee

Question 42

What does PFRS mean?

Answer 42

Philippine Financial Reporting Standards

Question 43

How many Chairmen are there in FSRSC?

Answer 43

1

Question 44

How many years of experience does a person need to become a Chairman of FSRSC?

Answer 44

5 years Must be a senior accounting practitioner.

Question 45

How many members are there in FSRSC?

Answer 45

15 members One for each department.

Question 46

Mention at least 7 Departments in which each of them was to be occupied by one of the 15 members of FSRSC:

Answer 46

1 member in every Department: Commission on Audit (COA) Board of Accountancy (BOA) Bangko Sentral ng Pilipinas (BSP) Bureau of Internal Revenue (BIR) Securities and Exchange Commission (SEC) Insurance Commission (IC) Major Preparers of FS (Finex)

Question 47

True or False: *Discussion paper* is mandatory that is the main vehicle to get comments from.

Answer 47

False: *Exposure draft* is mandatory that is the main vehicle to get comments from.

Question 48

Standard-setting process:

Answer 48

1. Setting the agenda 2. Project planning 3. Development and publication of **discussion paper** 4. Development and publication of **exposure draft** 5. Development and publication of **standards** 6. Follow-up

Question 49

True or False: *Exposure draft* is not mandatory and accept solicit comments without needing to.

Answer 49

False: *Discussion paper* is not mandatory and accepts solicit comments without needing to.