Financial Accounting & Reporting
Exam With 100% Verified Answers
1. This branch of accounting involves teaching accounting, taxation, and other business-related
subjects.
a. Accounting education
b. Government Accounting
c. Accounting research
d. Tax accounting
2. The main purpose of accounting is
a. to account for money so it will not be lost.
b. to provide information that is useful in making economic decisions.
c. to safeguard the assets of a company.
d. to provide a clear view of the industry’s econ
3. This branch of accounting focuses on catering to the information needs of external users.
a. Management accounting
b. Financial accounting
c. Auditing
d. External accounting
4. Recording assets at their acquisition cost (entry value), rather than at their net selling
price (exit value), is in line with the concept of
a. Single entity concept.
b. Historical cost concept.
,c. Going concern concept.
d. Matching principle.
5. A business sells goods in Year 1 but collects the sale price only in Year 2. According to
the accrual basis and time period concepts, the business should include the sale in its income
statement in
a. Year 1.
b. Year 2.
c. Year 3.
d. Every year
6. The generally accepted accounting principles (GAAP) in the Philippines are represented
by the PFRSs which are issued by the
a. Pinoy Accounting Standards.
b. Kapisanan ng mga Kontador sa Pilipinas.
c. Financial Reporting Standards Council.
d. Philippine Accounting Standards Board.
7. Under this concept, the business is treated separately from its owners.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
8. A business has total assets, liabilities, and equity of ₱10,000, ₱7,000 and ₱3,000,
respectively, at the beginning of the period. During the period, total liabilities decreased to
₱4,000 while profit was ₱5,000. How much is the ending total assets?
, a. 12,000
b. 11,000
c. 9,000
d. 7,000
Use the following information for the next three questions:
Entity A started operations on November 1, 20x1. The following were the transactions during the
month:
Nov. 1, 20x1 The business owner provides ₱2,000,000 cash as investment to the business.
Nov. 5, 20x1 Entity A obtains a ₱500,000 loan and issues a promissory note.
Nov. 8, 20x1 Entity A acquires land costing ₱1,000,000 on cash basis.
Nov. 16, 20x1 Entity A renders services worth ₱1,200,000 on account.
Nov. 30, 20x1 Entity A pays salaries expense of ₱280,000.
9. How much is the total assets at the end of the period? (Hint: use the basic accounting
equation)
a. 4,320,000
b. 3,840,000
c. 3,420,000
d. 2,980,000
10. How much is the total liabilities at the end of the period?
a. 500,000
b. 520,000
c. 580,000
d. 680,000
Exam With 100% Verified Answers
1. This branch of accounting involves teaching accounting, taxation, and other business-related
subjects.
a. Accounting education
b. Government Accounting
c. Accounting research
d. Tax accounting
2. The main purpose of accounting is
a. to account for money so it will not be lost.
b. to provide information that is useful in making economic decisions.
c. to safeguard the assets of a company.
d. to provide a clear view of the industry’s econ
3. This branch of accounting focuses on catering to the information needs of external users.
a. Management accounting
b. Financial accounting
c. Auditing
d. External accounting
4. Recording assets at their acquisition cost (entry value), rather than at their net selling
price (exit value), is in line with the concept of
a. Single entity concept.
b. Historical cost concept.
,c. Going concern concept.
d. Matching principle.
5. A business sells goods in Year 1 but collects the sale price only in Year 2. According to
the accrual basis and time period concepts, the business should include the sale in its income
statement in
a. Year 1.
b. Year 2.
c. Year 3.
d. Every year
6. The generally accepted accounting principles (GAAP) in the Philippines are represented
by the PFRSs which are issued by the
a. Pinoy Accounting Standards.
b. Kapisanan ng mga Kontador sa Pilipinas.
c. Financial Reporting Standards Council.
d. Philippine Accounting Standards Board.
7. Under this concept, the business is treated separately from its owners.
a. Separate entity concept
b. Historical cost concept
c. Going concern
d. Matching principle
8. A business has total assets, liabilities, and equity of ₱10,000, ₱7,000 and ₱3,000,
respectively, at the beginning of the period. During the period, total liabilities decreased to
₱4,000 while profit was ₱5,000. How much is the ending total assets?
, a. 12,000
b. 11,000
c. 9,000
d. 7,000
Use the following information for the next three questions:
Entity A started operations on November 1, 20x1. The following were the transactions during the
month:
Nov. 1, 20x1 The business owner provides ₱2,000,000 cash as investment to the business.
Nov. 5, 20x1 Entity A obtains a ₱500,000 loan and issues a promissory note.
Nov. 8, 20x1 Entity A acquires land costing ₱1,000,000 on cash basis.
Nov. 16, 20x1 Entity A renders services worth ₱1,200,000 on account.
Nov. 30, 20x1 Entity A pays salaries expense of ₱280,000.
9. How much is the total assets at the end of the period? (Hint: use the basic accounting
equation)
a. 4,320,000
b. 3,840,000
c. 3,420,000
d. 2,980,000
10. How much is the total liabilities at the end of the period?
a. 500,000
b. 520,000
c. 580,000
d. 680,000
