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Fundamentals of Accounting Part I
Introduction to Accounting
Multiple Choice.
Choose the letter of the best answer.
Use the following choices to answer nos. 1 3:
A. Defined by the Accounting Standards Council (ASC)
B. Defined by the American Institute of Certified Public Accountants (AICPA) Committee
on Accounting Terminology
C. Defined by the Board of Accountancy (BOA)
D. Defined by the American Accounting Association (AAA)
1. Accounting is 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
a financial character and interpreting the results thereof.
2. Accounting is a service activity. Its function is to provide quantitative information,
primarily financial in nature, about economic entities, that is intended to be useful in
making economic decision.
3. Accounting is the process of identifying, measuring and communicating economic
information to permit informed judgment and decision by users of the information.
4. All
A.
B.
C.
D.
5. The important points made in the definition of accounting include all of the following,
except
A. Accounting information is both quantitative and qualitative.
B. Accounting information is quantitative.
C. Accounting information is financial in nature.
D. Accounting information is useful in decision making.
6. The overall objective of accounting is
A. To provide the information that the managers of an entity need to control the
operations.
B. To provide information that the creditors can use in deciding whether to make
additional loans.
C. To measure the periodic income of the entity.
D. To provide quantitative financial information about an entity that is useful in
making economic decisions.
7. What is
A. R.A.
B. R.A.
C. R.A.
D. R.A.
8. It is the body authorized by law to promulgate rules and regulations affecting the
practice of the accountancy profession in the Philippines.
A. Board of Accountancy (BOA)
B. Philippine Institute of Certified Public Accountants (PICPA)
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1. B
2. A
3. D
4. C
5. A
6. D
7. B
8. A
9. A
10. A
Suggested Key
11. B
12. C
13. A
14. C
15. D
16. D
17. A
18. D
19. D
20. C
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