Prelim

Question 1

Is the process of evaluating financial and other information for decision making

Answer 1

Financial Analysis

Question 2

Is an economic activity that involves the exchange, purchase, sale or production of goods and services with a motive to earn profits and satisfy the needs of customers

Answer 2

Business

Question 3

Different classification or types of business in the philippines

Answer 3

Service business
merchandising business manufacturing business
other businesses

Question 4

Provides intangible goods or services to customers. Usually generates profit by charging for labor or other services rendered to consumers government or other companies

Answer 4

Service business

Question 5

Purchase products from other businesses or manufacturers and sell them to customers. Usually have merchandising inventories in their current asset account. Generate profits by providing markup prices on the goods available for sale

Answer 5

Merchandising business

Question 6

Convert raw materials, labor and overhead into finished products that are available for sale to customers

Answer 6

Manufacturing business

Question 7

This includes businesses that can’t be classified as service merchandising or manufacturers

Answer 7

Others businesses

Question 8

Types of business according to ownership structures

Answer 8

Proprietorship
Partnership
Corporation

Question 9

Forms of business organization

Answer 9

Sole proprietorship
Partnership
Corporation
Cooperative
Limited liability company or LLC

Question 10

Popular business structure.It is easy to set up and have one owner

Answer 10

Sole proprietorship

Question 11

Business that is owned by 2 or more individuals as partners. Classify as either general or limited.

Answer 11

Partnership

Question 12

Allow both partners to invest in a business with 100% responsibility for any business debt and don’t require formal agreement

Answer 12

General partnership

Question 13

Requires owners to file paperwork with the state and compose formal agreements that describe who is responsible for certain debts and details of partnership

Answer 13

Limited partnership

Question 14

Acts as a unique and separate entity from its shareholders. Pays its own taxes before distributing profits or dividends to shareholders.

Answer 14

Corporation

Question 15

Is a private business organization or farm that a group of individuals own and runs to meet a common goals these owners work together to operate a business and they share the profits and other benefits

Answer 15

Cooperative

Question 16

The most common form of business structure for small businesses. Define as a separate legal entity and may have an unlimited amount of owners. Typically tax as a sole proprietorship and require insurance in case of lawsuit.

Answer 16

Limited liability company

Question 17

3 main types of business activities

Answer 17

Operating business activities Investing business activities
Financing business activities

Question 18

It is a process of identifying, analyzing, summarizing, and journalizing or recording financial transactions pertaining to a business

Answer 18

Accounting

Question 19

Essential elements of the definition of accounting

Answer 19

Identifying
Analyzing
Summarizing
Journalizing /recording

Question 20

Analysis each business transaction identify whether the transaction is accountable event or non-accountable event

Answer 20

Identifying

Question 21

Process of examining, interpreting, and understanding financial information presented in financial statements reports and other accounting records

Answer 21

Analyzing

Question 22

Process of presenting the final value of classify the account in a separate statement called trial balance

Answer 22

Summarizing

Question 23

Process of keeping a record of all your business transactions tracking and chronological order and generally includes the date the account your debiting or crediting and a brief description of transaction that occurred.

Answer 23

Journalizing/Recording

Question 24

Types of accounting information

Answer 24

Financial accounting
Management accounting
Tax accounting
Non-for-profit accounting

Question 25

Information describing the financial resources obligations and activities of an economic entity

Answer 25

Financial accounting

Question 26

Information intended to aid management in running the business

Answer 26

Management accounting

Question 27

The subsector of accounting that deals with the preparations of tax returns and tax payments

Answer 27

Tax accounting

Question 28

Use for government agencies, churches, NGO's charitable institutions and schools

Answer 28

Non-for-profit accounting

Question 29

Users of accounting information

Answer 29

Internal users External users

Question 30

Users that directly involved in managing business

Answer 30

Internal users

Question 31

Users that not indirectly involved in business

Answer 31

External users

Question 32

Accounting principles

Answer 32

Measurement Revenue Recognition Expense recognition Full disclosur

Question 33

Also called the cost principle prescribes that accounting information is based on actual cost cause is measured on a cash or an equal to cash basis

Answer 33

Measurement

Question 34

It is also called sale is the amount received from selling products and services

Answer 34

Revenue Recognition

Question 35

It prescribes that a company record the expenses it incurred to generate revenue reported it is the key to modern accounting

Answer 35

Expense recognition

Question 36

Prescribes the company report a details behind financial statements that would impact users decision. they are often in the footnotes to the statements

Answer 36

Full disclosure

Question 37

Accounting assumptions

Answer 37

Monetary unit Time period Business entity Going concern

Question 38

Means that the accounting information reflects a presumption that the business will continue operating instead of being close or sold

Answer 38

Going concern

Question 39

Means that we can express transactions and events in monetary or money units money is the common denominator in business

Answer 39

Monetary unit

Question 40

Presumes that the life of a company can be divided into time periods, such as months and years and that useful reports can be prepared for those periods.

Answer 40

Time period

Question 41

Means the business is accounted for separately from the other business entities including its owners. A business entity can take one of the three legal forms: proprietorship, partnership or corporation.

Answer 41

Business entity

Question 42

Accounting constraints

Answer 42

Materiality Benefit exceeds cost

Question 43

Prescribes that only information that influences decisions need to be disclosed

Answer 43

Materiality

Question 44

Prescribes that only information would benefits of disclosure greater than the cost of providing it needs to disclose

Answer 44

Benefit exceeds cost

Question 45

they are documents that report on an individual or an organization's business in monetary terms and it provides the meaning of taking the post of the business. It tells us how a business is performing and wherr it stands.

Answer 45

Financial statements

Question 46

They are present economic resources controlled by the entity as a result of past events. An economic resource is a right that has a potential to produce economic benefits

Answer 46

Assets

Question 47

They are present obligation of the entity to transfer an economic resources as a result of past events and obligation is duty of responsibility that the entity has no practical ability to avoid.

Answer 47

Liabilities

Question 48

It is defined as the owner's interest in the company assets. In other words upon liquidation after all the liabilities are paid of the shareholders own remain assets this is why it is often referred to as net assets or assets minus liabilities.

Answer 48

Owner's equity

Question 49

An event that has a direct effect on operation on the business unit and can be expressed in terms of money

Answer 49

Business Transaction

Question 50

Five principal reports resulting from the process of financial accounting

Answer 50

1. Statement of financial position or balance sheet statement 2. Statement of profit or loss and other comprehensive income 3. Statement of changes on owner's equity 4. Statement of cash flows 5. Note to the financial statements and other explanatory notes