Test bank for conceptual framework and accounting

QUIZ #1

1. Accounting is a service activity and its function is to provide quantitative information, primarily
financial in nature, about economic activities, that is intended to be useful in making economic
decisions. This accounting definition is given by:
A. Accounting Standard Council
B. AICPA Committee on Accounting Terminology
C. American Accounting Association
D. Board of Accountancy

2. The basic objective of accounting is
A. To provide the information that the managers of an economic activity need to control its
operation
B. To provide information that the creditors of an economic entity can use in deciding
whether to make additional loans to the entity
C. To measure the periodic income of the economic activity
D. To provide quantitative financial information about an entity that is useful in making
rational economic decision

3. These are the events that affect the entity in which other entities participate
A. Internal events
B. External events
C. Current events
D. Obligating events

4. Accountants employed in entities in various capacity as accounting staff, chief accountant or
controller are said to be engaged in
A. Public Accounting
B. Private Accounting
C. Government Accounting
D. Financial Accounting

5. 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
B. Philippine Institute of Certified Public Accountants
C. Securities and Exchange Commission
D. Financial Reporting Standards Council

6. What is the law regulating the practice of accountancy in the Philippines
A. RA No. 9298
B. RA No. 9297
C. RA No. 9892
D. RA No. 9889

,7. Financial accounting is concerned with
A. General purpose reports on financial position and financial performance
B. Specialized reports for inventory management and control
C. Specialized reports for income tax computation and recognition
D. General purpose reports on changes in share prices and future estimates of market
position

8. It is an independent examination that ensures the fairness and reliability of the reports that
management submits to users outside the business entity
A. Cost Accounting
B. Auditing
C. Tax Accounting
D. Accounting for Education

9. Financial accounting can be broadly defined as the area of accounting that prepares
A. General purpose financial statements to be used by parties internal to the entity only
B. Financial statements to be used by investors only
C. General purpose financial statements to be used by parties both internal and external to
the entity
D. Financial statements to be used primarily by management

10. A conceptual framework for financial reporting is
A. A statement of financial accounting standards that deal with the presentation of financial
statements
B. An embodiment of generally accepted accounting principles that guides users of
financial statements in assessing the reliability of financial statements
C. A basic accounting assumption that guides the accountants in the preparation of
financial statements
D. A theoretical foundation that guides the Financial Reporting Standard Council, prepares
and users of financial accounting information in the preparation and presentation of
financial statements.

11. Which of the following is not within the scope of Conceptual Framework?
A. Objective of financial statements
B. Nature and definition of the elements of financial statements
C. Form of presentation of financial statements
D. Qualitative characteristics that make financial statements useful to users

12. The IASB’s Conceptual Framework
I. Set out the concepts that underlie the preparation and presentation of financial
statements for external users
II. Is a Statement of FInancial Accounting Standards and hence defines the standards for
various measurement or disclosure issues

, III. Is connected with general-purpose financial statements, including consolidated financial
statements
A. I only
B. II only
C. I and III
D. I, II and III

13.
Thexdprimaryxdresponsibilityxdforxdthexdfinancialxdstatementsxdofxdanxdenterprisexdrestxdwithxdits
A. Management
B. President
C. Shareholders
D. ExternalxdAuditors

14.xdFinancialxdaccountingxdisxdthexdareaxdofxdaccountingxdthatxdemphasizesxdreportingxdto
A. Management
B. Regulatoryxdbodies
C. Internalxdauditors
D. Creditorsxdandxdinvestors

15.xdManagerialxdaccountingxdisxdthexdareaxdofxdaccountingxdthatxdemphasizes
A. Reportingxdfinancialxdinformationxdtoxdexternalxdusers
B. ReportingxdtoxdthexdSEC
C. Combiningxdaccountingxdknowledgexdwithxdanxdexpertisexdinxddataxdprocessing
D. Developingxdaccountingxdinformationxdforxdusexdwithxdanxdentity

16.xdGeneralxdpurposexdfinancialxdstatementsxdarexdthexdproductxdof
A. Financialxdaccounting
B. Managerialxdaccounting
C. Bothxdfinancialxdandxdmanagerialxdaccounting
D. Neitherxdfinancialxdorxdmanagerialxdaccounting

17.xdThexdInternationalxdAccountingxdStandardxdBoardxdwasxdformed
A. ToxdenforcexdIFRSxdinxdforeignxdcountries
B. ToxddevelopxdaxdsinglexdsetxdofxdhighxdqualityxdIFRS….
C. Toxdestablishxdaccountingxdstandardsxdforxdmultinationalxdentities
D. Toxddevelopxdaccountingxdstandardsxdforxdcountriesxdthatxddoxdnotxdhavexdtheirxdownxdst
andardxdsettingxdbodies

18.xdThexdInternationalxdAccountingxdStandardxdBoardxdpublishesxditsxdstandardsxdinxdseriesxdo
fxdpronouncementxdcalled
A. InternationalxdAccountingxdStandards
B. FinancialxdReportingxdStandards
C. InternationalxdFinancialxdReportingxdStandards

, D. StatementxdofxdFinancialxdAccountingxdStandards

19.xdThexdInternationalxdAccountingxdStandardxdCommitteexdpublishesxditsxdstandardsxdinxdseri
esxdofxdpronouncementxdcalled
A. InternationalxdAccountingxdStandards
B. FinancialxdReportingxdStandards
C. InternationalxdFinancialxdReportingxdStandards
D. StatementxdofxdFinancialxdAccountingxdStandards

20.xdThisxdisxdaxdcomplete,xdcomprehensivexdandxdsinglexddocumentxdpromulgatedxdbyxdIASBxd
establishingxdthexdconceptxdthatxdunderliexdfinancialxdreporting
A. ConceptualxdFrameworkxdforxdFinancialxdReporting
B. ConceptualxdFrameworkxdforxdFinancialxdStatements
C. ConceptualxdFrameworkxdforxdBusinessxdEntities
D. FrameworkxdforxdthexdPreparationxdandxdPresentationxdofxdFinancialxdStatements

21.xdWhatxdisxdthexdauthoritativexdstatusxdofxdthexdConceptualxdFramework?
A. ThexdConceptualxdFrameworkxdhasxdthexdhighestxdlevelxdofxdauthority
B. Inxdthexdabsencexdofxdthexdstandardxdorxdinterpretationxdthatxdspecificallyxdappliesxdtoxda
xdtransaction,xdthexdConceptualxdFrameworkxdshallxdbexdfollowed
C. Inxdthexdabsencexdofxdthexdstandardxdorxdanxdinterpretationxdthatxdspecificallyxdappliesxdt
oxdaxdtransaction,xdmanagementxdshallxdconsiderxdthexdapplicabilityxdofxdthexdConceptua
lxdFrameworkxdinxddevelopingxdandxdapplyingxdanxdaccountingxdpolicyxdthatxdresultsxdinx
dinformationxdthatxdisxdrelevantxdandxdfaithfullyxdrepresented
D. ThexdConceptualxdFrameworkxdappliesxdonlyxdwhenxdthexdFRSCxddevelopsxdnewxdorxdr
evisedxdstandards

22.xdAxdConceptualxdFrameworkxdshould
A. Leadxdtoxduniformityxdofxdfinancialxdstatementsxdamountxdentitiesxdwithinxdthexdsamexdin
dustry
B. Eliminatexdalternativexdaccountingxdprinciples
C. GuidexdthexdPICPAxdinxddevelopingxdgenerallyxdacceptedxdauditingxdstandards
D. Definexdthexdbasicxdobjectives,xdtermsxdandxdconceptsxdofxdaccounting

23.xdInxdthexdConceptualxdFrameworkxdforxdFinancialxdReporting,xdwhatxdprovidesxdthexd“why”xd
ofxdaccounting?
A. Measurementxdandxdrecognitionxdconcept
B. Qualitativexdcharacteristicsxdofxdaccountingxdinformation
C. Elementxdofxdfinancialxdstatement
D. Objectivexdofxdfinancialxdreporting

24.xdWhichxdofxdthexdfollowingxdstatementsxdisxdtruexdconcerningxdthexdConceptualxdFramework
?