ACTG-6143A-2013T(UGRD) Conceptual

Framework & Acctg S

PQ1- Highest grade: 100.00 / 100.00.

Financial Reports does not include non financial information such as description of major
products and a listing of corporate officers and directors.

Select one:
True

False

The fundamental qualitative characteristics are relevance, faithful representation and

materiality.

Select one:
True

False

Come in from outside the organization to examine accounting and financial records and
provide an independent opinion on these records.

Select one:
a. Accountant
b. External Auditor
c. Bookkeeper

d. Internal Auditor
Involve financial planning services for individuals as well as business consultation services to
help management design, develop and implement accounting systems and employee
compensation packages.

Select one:
a. Consulting services
b. Tax Services 
c. Accounting and auditing services

All certified public accountants shall abide by the requirements, rules and regulations on
continuing professional education to be promulgated by the Board.

Select one:
True

False

Involves the preparation of tax returns as well as advising clients on tax deductions, tax
planning, and other tax-related issues.

Select one:
a. Accounting and auditing services,
b. Consulting services

c. Tax Services

Is capable of making a difference in the decisions made by users. Information may be

capable of making a difference in a decision even if some users choose not to take
advantage of it or are already aware of it from other sources.

Select one:
 a. Important Information
b. Financial information
c. Relevant financial information

d. Irrelevant financial information

IFRS stands for?
International Financial Reporting Standards

Sets out the concepts that underlie the preparation and presentation of financial statements
for external users.
Conceptual Framework

Is an independent private sector body, with the objective of achieving uniformly in the
accounting principles which are used by business and other organization for financial
reporting worldwide.

Select one:
a.  Conceptual Standard Council
b. Accounting Standards Association
c. International Accounting Standards Committee

d. Board of Accountancy

Are usually trained accountants who specialize in checking accounts rather preparing them.
Auditors

Work for the organization as internal employees to examine records and help improve
internal processes such as operations, internal controls, risk management, and governance.

Select one:
a. Bookkeeper
 b. Internal Auditor
c. Accountant

d. External Auditor

The art of recording, classifying, and summarizing in a significant manner and in terms of
money, transactions, and events which are, in part at least of financial character, and
interpreting the results thereof. 
Accounting

Involve maintaining financial records and preparing and auditing financial statements for
use by outside investors and banks.

Select one:
a. Accounting and auditing services
b. Consulting Services

c. Tax Services

Is the body authorized by law to promulgate rules and regulation affecting the practice of the
accountancy profession in the Philippines
Board of Accountancy

Deals with the financial information of a single company they’re employed by, usually preparing
or analyzing reports for an internal manager.

Private Accounting

The role of the external auditors in sustaining good corporate governance is not
acknowledged.

Select one:
True

False
Conceptual Framework purpose is to assist the Board in the development of future IFRS and
in its review of existing IFRS.

Select one:
True

False

Is the branch of accounting where an accountant works with a range of clients to review and
prepare financial documents that an individual or corporation is required to disclose to the
public.

Public Accounting

Government accountants and auditors work in the public sector to maintain and examine
the records of government agencies and also to audit private businesses and individuals
who pay taxes.

Government Accounting

Represent the main products of financial reporting.

Select one:
a. Financial Information
b. Financial Reporting,
c. Financial Status

d. Financial Reports
General Purpose Financial Statements provide financial information about the reporting
entity that is useful to existing and potential investors, lenders and other creditors in making
decisions about providing resources to the entity.

Select one:
True

False

In this statement, categories all cash payments made and received through-out the year

Select one:
a. Statement of cash flows
b. Statement of changes in equity
c. Statement of financial position

d. Statement of comprehensive income

In this statement, explains what the government’s (or owner’s) interest is comprise of. It also
highlights the movement between the various classes of equity.

Select one:
a. Statement of changes in equity
b. Statement of comprehensive income
c. Statement of cash flows

d. Statement of financial position

Are individuals or financial institutions that normally lend money to businesses and earn
interest income on it.

Select one:
a. Lenders
b. Supplier
c. Stakeholder

d. General Public

Accounting information doesn’t important information to customers about current position

of a business organization and to make a judgment about its future.

Select one:
True

False

In this statement, assets and liabilities are split into current and non-current which generally
means if they are expected to be settled within 12 months.

Select one:
a. Statement of cash flows
b. Statement of comprehensive income
c. Statement of changes in equity

d. Statement of financial position 

Use financial information of businesses for the purpose of imposing taxes and regulations.

Select one:
a. General Public
b. Supplier
c. Government Agencies
d. Stakeholder

e. Lenders

An income statement displaying the components of net income or loss.

Select one:
True

False

Accounting information of a business enterprise is used by many stakeholders.

Select one:
True

False

GAAP stands for?

Generally Accepted Accounting Principles

Is a service activity. Its function is to provide qualitative information, primarily financial

nature, about economic entities, that is intended to be useful in making economic decision.
Accounting

Is the process of identifying, measuring and communicating economic information to

permit informed judgment and decision by users of the information.
Accounting
Encompasses not only financial statements but also other members of communicating
information that relates directly or indirectly to the financial accounting process.
Financial Reporting

The objectives of general purpose financial reporting in the public sector should be, to not
information useful for decision making, and to demonstrate the accountability of the entity
for the resources entrusted to it.

Select one:
True

False

Republic Act No. 9298 is the law regulation the practice of accountancy in the Philippines.
This law is also known as:

Select one:
a. Philippine Accountancy of 2006
b. Philippine Accountancy of 2005
c. Philippine Accountancy of 2007

d. Philippine Accountancy of 2004

Are a structured representation of the financial position and financial performance of an

entity.

Select one:
a. Financial Information
b. Financial Position
c. Financial Statements

d. Balance Sheet
This statement outlines the revenues and expenses over the year. It also includes non-cash
transactions such as depreciation, and increases or decreases in the value of assets.

Select one:
a. Statement of financial position
b. Statement of cash flows
c. Statement of comprehensive income

d. Statement of changes in equity

The overall objective of Financial Reporting is to provide information that is useful for
decision making.

Select one:
True

False

Are business individuals or organizations that normally sell merchandise or raw materials to
other businesses on credit.

Select one:
a. General Public
b. Stakeholder
c. Lenders

d. Suppliers

This presentation referred to as the nature of expense method

Natural Presentation
 Involve maintaining financial records and preparing and auditing financial statements for
use by outside investors and banks.

Select one:
a. Accounting and auditing services
b. Tax Services

c. Consulting Services

Is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction.
Fair value

The ability of the enterprise to use its available cash for unexpected requirements and
investment opportunities.
Financial Flexibility

Resources controlled by entity as a result of past transactions and events and from which
future economic benefits are expected to flow to the entity

Select one:
a. Asset
b. Income
c. Equity

d. Liabilities

Are the specific principles, bases, conventions, rules and practices adopted by an enterprise
in preparing and presenting financial statements.

Select one:
a. Accounting Standard
b. Conceptual Framework
 c. Accounting Policies

d. Accounting Rules

Defines a financial instrument as cash, evidence of an ownership interest in a company or

other entity, or a contract.

Select one:
a. Account Standard
b. Generally Accepted Accounting Principles
c. Conceptual Framework

d. Board of Accountancy

Other term for Statement of Financial Position

Balance Sheet

Work for the organization as internal employees to examine records and help improve
internal processes such as operations, internal controls, risk management, and governance.

Select one:
a. Bookkeeper
b. Accountant
c. Internal Auditor

d. External Auditor

Refers to an asset that is not traded on the financial markets, and its value is derived from
its physical characteristics rather than from contractual claims.

Select one:
a. Non-financial Assets
b. Financial Assets
 c. Financial Liabilities

d. Equity

Use financial information of businesses for the purpose of imposing taxes and regulations.

Select one:
a. Government Agencies
b. Lenders
c. General Public
d. Stakeholder

e. Supplier

Are a structured representation of the financial position and financial performance of an

entity.

Select one:
a. Financial Information
b. Financial Statements
c. Financial Position

d. Balance Sheet

Is a written pledge that the customer will pay the business a fixed amount of money on a
certain date.

Promissory note
 Conveys to that second entity a contractual right either:

Select one or more:

a. To exchange other financial instruments on potentially unfavorable terms with the second
entity.
b. To deliver cash or another financial instrument to a second entity
c. To exchange other financial instruments on potentially favorable terms with the
first entity.

d. To receive cash or another financial instrument from the first entity

Imposes on one entity a contractual obligation either: (Choose two)

Select one or more:

a. To exchange other financial instruments on potentially favorable terms with the first
entity.
b. To receive cash or another financial instrument from the first entity
c. To deliver cash or another financial instrument to a second entity

d. To exchange other financial instruments on potentially unfavorable terms with the
second entity.

PAS stands for?

Philippine Accounting Standards

Is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
fair value

Refers to the availability of cash over the longer term to meet financial commitments as

they fall due.
Solvency
 Involve financial planning services for individuals as well as business consultation services to
help management design, develop and implement accounting systems and employee
compensation packages.

Select one:
a. Tax Services 
b. Consulting services
c. Accounting and auditing services

Financial statements should disclose all “material” items, i.e. items, the knowledge of which
might influence the decisions of the user of the financial statements.

Select one:
a. Prudence
b. Substance over Form

c. Materiality

Are business individuals or organizations that normally sell merchandise or raw materials to
other businesses on credit.

Select one:
a. Suppliers
b. General Public
c. Stakeholder

d. Lenders

Any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities.
equity instrument
 In view of the uncertainty of future events, profits are not anticipated but recognized only
when earned, though not necessarily in cash.

Select one:
a. Materiality
b. Prudence

c. Substance over Form

This account is used to record the original and additional investments of the owner of the
business entity.
Capital

Disclosure of accounting policies or of the changes is the remedy for any wrong or
inappropriate treatment of items in the accounts.

Select one:
True

False

Are defined in the conceptual framework as “present obligations of an entity arising from
the past transaction or events, the settlement of which is expected to result in an outflow
from the entity of resources embodying economic benefits.

Select one:
a. Income
b. Assets
c. Liabilities

d. Equity
 The accounting treatment and presentation of transactions and events in financial
statements should be governed by their substance and not merely by the legal form.

Select one:
a. Substance over Form
b. Prudence

c. Materiality

An entity shall derecognize a financial asset only when the contractual rights to the cash
flows expire or it transfers the financial asset and that transfer qualifies for derecognition. 

Select one:
True

False

As the title suggests, the presentation follows that if an account, meaning, the assets are shown
on the left side and the liabilities and equity on the right side of the statement of financial
position.
Balance Sheet

Are individuals or financial institutions that normally lend money to businesses and earn
interest income on it.

Select one:
a. Supplier
b. General Public
c. Stakeholder

d. Lender
Is any medium of exchange that a bank will accept fore deposit at face value. It includes coins,
currency, checks, money orders, bank deposit and drafts.
Cash

Accounting policies refer to accounting principles and the methods of applying these
principles adopted by the organization in the preparation of their financial statements.

Select one:
True

False

Financial liabilities shall recognized in accounting when, and only when, an entity assumes
an obligation to deliver cash or another financial asset.

Select one:
True

False

Showing all components of net income or loss and all components of other comprehensive
income.

Select one:
a. Single statement of comprehensive income
b. Financial Report
c. Income Statement

d. Financial Statement

This form sets forth the three major sections in a downward sequence of assets, liabilities
and equity.
balance sheet
This form classifies expenses according to their function as part of sales, selling activities,
administrative activities and other activities.

Selling and administrative expenses

Arising from derecognition, reclassification, impairment or in the case of a financial asset,

the moralization process, will be recognized in profit or loss.

Select one:
a. Recognition
b. Expenses
c. Income

d. Gains and losses

The statement of Financial Position is an expansion of the accounting equation:

Select one:
a. Asset equals Liability plus Equity
b. Liability equals Asset plus Equity

c. Asset equals Liability minus Equity

A financial asset shall be recognized in accounting when, and only when, an entity receives
or in accordance with the ongoing contract obtains a right to receive cash or another
financial asset.

Select one:
True

False
Is the source of financing for the assets of the enterprise. It indicates what amount of assets
has been financed by creditors, which is borrowed capital, and what amount of assets has
been financed by owners, which is invested capital.
total-debt-to-total-assets ratio