Financial Accounting & Reporting with correct answers

Financial Accounting & Reporting with correct answers External transactions - What are those transactions economic events involving one entity and another entity? Internal transactions (production and casualty loss) - These are economic events involving the entity only. Measuring - This accounting process involves the accountable economic transactions and events as to Assigning of Peso Amounts Other assets - Advances to employees is under what line item in the balance sheet when it is more than the period Historical Cost (than other 3 measurement basis) - What is the most common measure of financial transactions? Current cost, Realizable value and Present Value - What are other measurement bases? Communicating - What is the process of PREPARING AND DISTRIBUTING accounting reports to potential users of accounting information. Universal Language of Business - The communication process is the reason why accounting has been called the Recording, Classifying and Summarizing aspects of accounting - Implicit in the communication process are the Recording or Journalizing - Is the process of systematically maintaining a record of all economic business transactions after they have been identified and measured. Classifying (This is accomplished by posting to the ledger) - Is the sorting or grouping of similar and interrelated economic transactions into their respective classes The Ledger - What is a group of accounts which are systematically categorized into different accounts. Accounting as an information system - Is an information system that measures business activities, processes information into reports and communicates the reports to decision makers Financial Statements - The documents that report financial information about an entity to decision makers, it is a key product of this information system is a set of Overall Objective of accounting - Is to provide quantitative information financial information about a business that is useful to statement users particularly owners and creditors, in making economic decisions Republic Act No. 9298 (Philippine Accountancy Act of 2004) - The Law regulating the practice of accountancy in the Philippines Board of Accountancy (Responsible preparing and grading the Philippine CPA examination) - Government examination is given by the Certified Public Accountants in the Philippines - Single Practitioners and partnerships for the practice of public accountancy shall be registered as Minimum of Three years (meaningful experience in any of the areas of public practice including taxation) - A certificate of accreditation shall be issued to certified public accountants in public practice only upon showing in accordance with rules and regulations promulgated by the board of accountancy and approved by the PRC that such registrant has acquired a The Securities and Exchange Commission - They shall not register any corporation organized for the practice of public accountancy Public Accounting, Private Accounting and Government Accounting - C.P.A.s generally practice their profession in three main areas these are Public Accounting (auditing, taxation and management advisory services) - What field is composed of individual practitioners, small accounting firms and large multinational organizations that render independent and expert financial services to the public Auditing (or external auditing is the "examination of financial statements by independent cpa for the purpose of expressing an opinion as to fairness with which the financial statements are prepared." - What has been the traditionally primary service offered by most public accounting practioners External Auditing - What is the "attest function" of independent CPAs Bureau of Internal Revenue - What entity requires audited financial statements to accompany the filing of annual income tax return Audit by an independent CPA - What is required for banks and other lending institutions in order they would be granted a loan Taxation Service - What includes the preparation of annual income tax returns and determination of tax consequences of certain proposed business endeavors Management advisory services - These have become increasingly important in recent years, although audit and tax services are undoubtedly the mainstay of public accountants. Audit (Whether they are in conformity with general accepted principles) - What is a systematic and independent examination of books, accounts, documents and vouchers of an organisation to ascertain how far the financial statements present a true and fair view of the concern. Private Accounting (controller - highest accounting officer) - Accounting Staff, Chief Accountant, Internal auditor and Controller are under what general practice of accounting? Is to assist management in planning and controlling the entity's operations - What is the Major objective of the private accountant June 1973 London and was replaced by the International Accounting Standards Board on 1 April 2001. Philippines then became compliant on 2005 since its process started 1997 - When was the International Accounting Standards Committee (IASC) founded? GAAP in the Philippines - The Financial Reporting Standards Council (FRSC) of the Philippines is the regulatory body task to establish and improve the "A measurement basis according to which assets are recorded at acquisition price" - The Framework of International Accounting Standards Board (IASB) defines historical cost as Philippine Accounting Standards - What is the Philippine version of International Accounting Standards IAS were issued by the International Accounting Standards Committee (IASC) from 1973 to 2001 The Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS) are the new set of Generally Accepted Accounting Principles (GAAP) issued by the Accounting Standards Council (ASC) to govern the preparation of financial statements. - IFRS (International Financial Reporting Standards ) is a set of accounting standards developed by an independent, not-for profit organiz