ACCCOB2 Quiz 1 Questions and Answers 100% Pass

ACCCOB2 Quiz 1 Questions and Answers 100% Pass Accounting - the art of recording, classifying, and summarizing in a significant manner Primary users - the main providers of funds to the entity; need an entity's financial information for investment and lending purposes to produce general purpose financial statements - Main purpose of Financial accounting Philippine Financial Reporting Standards (PFRS) - comprised of different standards and interpretations that lay out the guideline sand principles to be followed in the presentation of the items shown in the general purpose financial statements, as well as their disclosures Conceptual Framework for Financial Accounting - a generic guide used to creating standards for reporting financial statements True - True or False: The standards are prioritized than the conceptual framework for financial accounting. Relevance - A fundamental qualitative characteristic that is capable of making a difference in the users' decisions Faithful Representation - A fundamental qualitative characteristic where information is complete, neutral and free from error 2© EMILY CHARLENE YEAR , ALL RIGHTS RESERVED Comparability - An enhancing qualitative characteristic where information should be comparable between different entities or time periods Verifiability - An enhancing qualitative characteristic of accounting information, indicating that similar results will occur when independent third parties (e.g., auditors) measure using the same methods. Timeliness - An enhancing qualitative characteristic of accounting information, indicating that information should be available to decision-makers before it loses its capacity to influence their decisions. Understandability - An enhancing qualitative characteristic where information shall be classified, presented clearly and concisely Consistency - An enhancing qualitative characteristics that refers to the use of the same methods for the same items Going concern - financial statements are prepared with the expectation that a business will remain in operation indefinitely Accrual Basis of Accounting - effects of transactions and other events are recognized when they occur, and not as cash is received or paid Statement of Financial Position - A financial statement that shows the entity's assets, liabilities, and equity as of a particular date Statement of profit or loss - A financial statement that presents the entity's profit or loss, total other comprehensive income, and comprehensive income for the period Statement of changes in equity - A financial statement that shows the changes in the entity's net assets duringthe period 3© EMILY CHARLENE YEAR , ALL RIGHTS RESERVED Statement of Cash Flows - A financial statement that shows how the entity was able to handle one of its most important and delicate resources, cash Cash - includes money and any other negotiable instrument that is payable in money Cash on hand - A category of cash that are cash collections and cash items (checks, bank drafts and money orders) awaiting bank deposit Cash in bank - A category of cash that are demand or savings deposit, or checking account which are unrestricted as to withdrawal Cash set aside for current use - A category of cash that