CFAS (CONCEPTUAL FRAMEWORK AND ACCOUNTING
STANDARDS) QUIZ 1-5 WITH CORRECT ANSWERS
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. The primary responsibility for the financial statements of an enterprise rest with its
A. Management
B. President
C. Shareholders
D. External Auditors
14. Financial accounting is the area of accounting that emphasizes reporting to
A. Management
B. Regulatory bodies
C. Internal auditors
D. Creditors and investors
15. Managerial accounting is the area of accounting that emphasizes
A. Reporting financial information to external users
B. Reporting to the SEC
C. Combining accounting knowledge with an expertise in data processing
D. Developing accounting information for use with an entity
16. General purpose financial statements are the product of
A. Financial accounting
B. Managerial accounting
C. Both financial and managerial accounting
D. Neither financial or managerial accounting
17. The International Accounting Standard Board was formed
A. To enforce IFRS in foreign countries
B. To develop a single set of high quality IFRS….
C. To establish accounting standards for multinational entities
D. To develop accounting standards for countries that do not have their own standard
setting bodies
18. The International Accounting Standard Board publishes its standards in series of
pronouncement called
, A. International Accounting Standards XV XV
B. Financial Reporting Standards XV XV
C. International Financial Reporting Standards XV XV XV
D. Statement of Financial Accounting Standards
XV XV XV XV
19. The International Accounting Standard Committee publishes its standards in series of pro
XV XV XV XV XV XV XV XV XV XV XV XV
nouncement called XV
A. International Accounting Standards XV XV
B. Financial Reporting Standards XV XV
C. International Financial Reporting Standards XV XV XV
D. Statement of Financial Accounting Standards XV XV XV XV
20. This is a complete, comprehensive and single document promulgated by IASB establishin
XV XV XV XV XV XV XV XV XV XV XV XV
g the concept that underlie financial reporting
XV XV XV XV XV XV
A. Conceptual Framework for Financial Reporting XV XV XV XV
B. Conceptual Framework for Financial Statements XV XV XV XV
C. Conceptual Framework for Business Entities XV XV XV XV
D. Framework for the Preparation and Presentation of Financial Statements
XV XV XV XV XV XV XV XV
21. What is the authoritative status of the Conceptual Framework?
XV XV XV XV XV XV XV XV XV
A. The Conceptual Framework has the highest level of authority
XV XV XV XV XV XV XV XV
B. In the absence of the standard or interpretation that specifically applies to a transactio
XV XV XV XV XV XV XV XV XV XV XV XV XV
n, the Conceptual Framework shall be followed
XV XV XV XV XV XV
C. In the absence of the standard or an interpretation that specifically applies to a transa
XV XV XV XV XV XV XV XV XV XV XV XV XV XV
ction, management shall consider the applicability of the Conceptual Framework in de
XV XV XV XV XV XV XV XV XV XV XV
veloping and applying an accounting policy that results in information that is relevant a
XV XV XV XV XV XV XV XV XV XV XV XV XV
nd faithfully represented
XV XV
D. The Conceptual Framework applies only when the FRSC develops new or revised sta
XV XV XV XV XV XV XV XV XV XV XV XV
ndards
22. A Conceptual Framework should
XV XV XV XV
A. Lead to uniformity of financial statements amount entities within the same industry
XV XV XV XV XV XV XV XV XV XV XV
B. Eliminate alternative accounting principles XV XV XV
C. Guide the PICPA in developing generally accepted auditing standards
XV XV XV XV XV XV XV XV
D. Define the basic objectives, terms and concepts of accounting
XV XV XV XV XV XV XV XV
23. InXV XV the Conceptual Framework for Financial Reporting, what provides the “why” of accounti
XV XV XV XV XV XV XV XV XV XV XV
ng?
A. Measurement and recognition concept XV XV XV
B. Qualitative characteristics of accounting information
XV XV XV XV
C. Element of financial statement XV XV XV
D. Objective of financial reporting XV XV XV
24. Which of the following statements is true concerning the Conceptual Framework?
XV XV XV XV XV XV XV XV XV XV XV
STANDARDS) QUIZ 1-5 WITH CORRECT ANSWERS
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. The primary responsibility for the financial statements of an enterprise rest with its
A. Management
B. President
C. Shareholders
D. External Auditors
14. Financial accounting is the area of accounting that emphasizes reporting to
A. Management
B. Regulatory bodies
C. Internal auditors
D. Creditors and investors
15. Managerial accounting is the area of accounting that emphasizes
A. Reporting financial information to external users
B. Reporting to the SEC
C. Combining accounting knowledge with an expertise in data processing
D. Developing accounting information for use with an entity
16. General purpose financial statements are the product of
A. Financial accounting
B. Managerial accounting
C. Both financial and managerial accounting
D. Neither financial or managerial accounting
17. The International Accounting Standard Board was formed
A. To enforce IFRS in foreign countries
B. To develop a single set of high quality IFRS….
C. To establish accounting standards for multinational entities
D. To develop accounting standards for countries that do not have their own standard
setting bodies
18. The International Accounting Standard Board publishes its standards in series of
pronouncement called
, A. International Accounting Standards XV XV
B. Financial Reporting Standards XV XV
C. International Financial Reporting Standards XV XV XV
D. Statement of Financial Accounting Standards
XV XV XV XV
19. The International Accounting Standard Committee publishes its standards in series of pro
XV XV XV XV XV XV XV XV XV XV XV XV
nouncement called XV
A. International Accounting Standards XV XV
B. Financial Reporting Standards XV XV
C. International Financial Reporting Standards XV XV XV
D. Statement of Financial Accounting Standards XV XV XV XV
20. This is a complete, comprehensive and single document promulgated by IASB establishin
XV XV XV XV XV XV XV XV XV XV XV XV
g the concept that underlie financial reporting
XV XV XV XV XV XV
A. Conceptual Framework for Financial Reporting XV XV XV XV
B. Conceptual Framework for Financial Statements XV XV XV XV
C. Conceptual Framework for Business Entities XV XV XV XV
D. Framework for the Preparation and Presentation of Financial Statements
XV XV XV XV XV XV XV XV
21. What is the authoritative status of the Conceptual Framework?
XV XV XV XV XV XV XV XV XV
A. The Conceptual Framework has the highest level of authority
XV XV XV XV XV XV XV XV
B. In the absence of the standard or interpretation that specifically applies to a transactio
XV XV XV XV XV XV XV XV XV XV XV XV XV
n, the Conceptual Framework shall be followed
XV XV XV XV XV XV
C. In the absence of the standard or an interpretation that specifically applies to a transa
XV XV XV XV XV XV XV XV XV XV XV XV XV XV
ction, management shall consider the applicability of the Conceptual Framework in de
XV XV XV XV XV XV XV XV XV XV XV
veloping and applying an accounting policy that results in information that is relevant a
XV XV XV XV XV XV XV XV XV XV XV XV XV
nd faithfully represented
XV XV
D. The Conceptual Framework applies only when the FRSC develops new or revised sta
XV XV XV XV XV XV XV XV XV XV XV XV
ndards
22. A Conceptual Framework should
XV XV XV XV
A. Lead to uniformity of financial statements amount entities within the same industry
XV XV XV XV XV XV XV XV XV XV XV
B. Eliminate alternative accounting principles XV XV XV
C. Guide the PICPA in developing generally accepted auditing standards
XV XV XV XV XV XV XV XV
D. Define the basic objectives, terms and concepts of accounting
XV XV XV XV XV XV XV XV
23. InXV XV the Conceptual Framework for Financial Reporting, what provides the “why” of accounti
XV XV XV XV XV XV XV XV XV XV XV
ng?
A. Measurement and recognition concept XV XV XV
B. Qualitative characteristics of accounting information
XV XV XV XV
C. Element of financial statement XV XV XV
D. Objective of financial reporting XV XV XV
24. Which of the following statements is true concerning the Conceptual Framework?
XV XV XV XV XV XV XV XV XV XV XV
