Healthcare**Healthcare is one of the sectors where ethical and legal issues are particularly
pronounced. Medical professionals regularly face situations that require them to make
complex decisions that not only have life-altering consequences for patients but also raise
profound moral questions. These issues include:#### 2.1 **Patient Autonomy and Informed
Consent**One of the fundamental ethical principles in healthcare is respect for patient
autonomy—the right of patients to make decisions about their own bodies and medical
treatments. This principle is enshrined in the legal concept of informed consent. Informed
consent requires healthcare providers to disclose all relevant information about the risks,
benefits, and alternatives to a medical treatment or procedure, allowing patients to make
TEST BANK
Theory of Accounts
Intermediate
Financial Accounting
Part 1A & Part 1B
, Chapter 1
Overview of Accounting
Chapter 1: Theory of Accounts Reviewer Definition
of Accounting
1. Accounting has been given various definitions, which of the following is not one of those
definitions
a. Accounting is a service activity. Its function is to provide quantitative information, primarily financial in
nature, about economic entities that is intended to be useful in making economic decisions.
b. Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of
money, transactions and events which are, in part of at least, of a financial character and
interpreting the results thereof.
c. Accounting is a systematic process of objectively obtaining and evaluating evidence
regarding assertions about economic actions and events to ascertain the degree of
correspondence between these assertions and established criteria and communicating the
results to interested users.
d. Accounting is the process of identifying, measuring, and communicating economic information to
permit informed judgment and decisions by users of information.
2. It is the first process used in accounting. It refers to the identification of events as to whether they are
recognized or not in the financial statements.
a. Identifying b. Measuring c. Communicating d. Auditing
Healthcare**Healthcare is one of the sectors where ethical and legal issues are particularly pronounced.
Medical professionals regularly face situations that require them to make complex decisions that not only have
life-altering consequences for patients but also raise profound moral questions. These issues include:#### 2.1
**Patient Autonomy and Informed Consent**One of the fundamental ethical principles in healthcare is respec
for patient autonomy—the right of patients to make decisions about their own bodies and medical treatments
This principle is enshrined in the legal concept of informed consent. Informed consent requires healthcare
providers to disclose all relevant information about the risks, benefits, and alternatives to a medical treatment
or procedure, allowing patients to make
3. The following statements correctly refer to the accounting process.
I. Measuring is the accounting process of analyzing business activities as to whether or not they will be
recognized in the books.
II. Recognition refers to the process of including the effects of an event in the totals of the statement of
financial position or the statement of profit or loss and other comprehensive income through memo
entries.
III. Disclosure of events in the notes to financial statement without including in the totals of the
statement of financial position or statement of profit or loss and other comprehensive income is not
an application of the recognition principle.
IV. An accountable event is an event that has an effect on the assets, liabilities or equity of an entity and
its effect can be measured reliably.
V. Sociological and psychological matters are within the scope of accounting.
a. I, II, III, IV, V b. I, II, III, IV c. IV d. III, IV
Types of Events
4. These events involve changes in the economic resources or obligations of entities involving other
entities but do not involve transfers of resources or obligations
a. External events c. External events other than transfers
b. Non-reciprocal transfers d. Internal events
5. Events involving an entity and an external party.
, a. External events c. External events other than transfers
b. Non-reciprocal transfers d. Internal events
7. These events result to a sudden or unanticipated loss from fortuitous events.
a. Internal events c. External events other than transfers
b. Non-reciprocal transfers d. Casualty
Healthcare**Healthcare is one of the sectors where ethical and legal issues are particularly pronounced. Medic
professionals regularly face situations that require them to make complex decisions that not only have life-alte
consequences for patients but also raise profound moral questions. These issues include:#### 2.1 **Patient Au
and Informed Consent**One of the fundamental ethical principles in healthcare is respect for patient autonom
right of patients to make decisions about their own bodies and medical treatments. This principle is enshrined
concept of informed consent. Informed consent requires healthcare providers to disclose all relevant informati
the risks, benefits, and alternatives to a medical treatment or procedure, allowing patients to make
8. Which of the following statements is true?
I. Loss from theft should be classified as a nonreciprocal transfer
II. Internal events are changes in economic resources by actions of other entities that do not involve
transfers of enterprise resources and obligations
III. Nonreciprocal transfers involve the transfer of resources in only one direction, either from an entity
to other entities or from other entities to the entity.
IV. Internal events are sudden, substantial, unanticipated reductions in enterprise resources not caused
by other entities
V. Fire, earthquake and flood are examples of accountable events classified as internal events.
a. I, II, III, V b. I, III, V c. II, III, IV, V d. I, III, IV, V
9. All of the following are events considered as exchange or reciprocal transfer, except
a. purchase of investment in equity securities
b. sale of equipment for non-interest bearing note
c. subscription on the entity’s own equity instrument
d. exchange of a note payable for an account payable
e. borrowing of money from a bank
10. All of the following are events considered as nonreciprocal transfer, except
a. declaration of cash dividends c. payment of accounts payable
b. declaration of stock dividends d. imposition of fines
11. All of the following are events considered as external events other than transfers, except
a. obsolescence c. imposition of fines
b. inflation d. vandalism
12. All of the following are events considered as internal events, except
a. Transfer of goods from work-in-process to finished goods inventory
b. flood, earthquake, fire and other “Acts of God”
c. transformation of biological assets from immature to mature
d. vandalism committed by the entity’s employees
13. Which of the following events is considered an internal event?
a. sale of inventory on account
b. provision of capital by owners
c. borrowing of money
d. conversion of raw materials into finished goods
14. Which of the following events is considered an external event?
, b. contributions by owners d. degeneration of biological assets
16. Which of the following correctly relates to accountable events?
I. An obsolete asset which has no use was received in exchange of an existing asset. This transaction
may be classified as an exchange.
II. An entity exchanges a non-cash asset for another non-cash asset in an exchange
transaction with commercial substance. This is a reciprocal transfer.
III. An entity issues its shares of stocks in exchange for a non-cash asset. This is a reciprocal transfer.
a. I b. II c. II, III d. I, II, III
Healthcare**Healthcare is one of the sectors where ethical and legal issues are particularly pronounced. Medic
professionals regularly face situations that require them to make complex decisions that not only have life-alte
consequences for patients but also raise profound moral questions. These issues include:#### 2.1 **Patient Au
Informed Consent**One of the fundamental ethical principles in healthcare is respect for patient autonomy—t
patients to make decisions about their own bodies and medical treatments. This principle is enshrined in the le
of informed consent. Informed consent requires healthcare providers to disclose all relevant information abou
benefits, and alternatives to a medical treatment or procedure, allowing patients to make
17. An example of income derived from a nonreciprocal transfer is
a. compensation received as damages in a successful lawsuit
b. appreciation of property
c. land acquired from a stockholder as donation
d. settlement of a liability at less than its book value (RPCPA)
Measuring
18. Asset measurements in conventional financial statements
a. are confined to historical cost
b. are confined to historical cost and current cost
c. reflect several financial attributes
d. do not reflect output values (RPCPA)
19. Financial statements are said to be a mixture of fact and opinion. Which of the following items is factual?
a. cost of goods sold c. discount on capital stock
b. retained earnings d. patent amortization expense (Adapted)
20. On December 31, 200A, Annod Co. decided to end its operations and dispose its assets within three
months. At December 31, 200A, the carrying amount of an investment property was less than both its fair
value and net realizable value. The fair value is greater than the net realizable value. What is the
appropriate measurement basis for the investment property in Annod’s December 31, 200A statement
of financial position?
a. Historical cost c. Net realizable value
b. Fair value d. Current replacement cost
Communicating
21. These are the principal means through which an entity communicates its financial information to those
outside it.
a. managerial reports c. segment reports
b. financial statements d. directors’ statements
22. The analytical phase of accounting which significantly portrays the liquidity, solvency,
profitability of a business
a. interpreting c. summarizing
b. recording d. classification (RPCPA)
pronounced. Medical professionals regularly face situations that require them to make
complex decisions that not only have life-altering consequences for patients but also raise
profound moral questions. These issues include:#### 2.1 **Patient Autonomy and Informed
Consent**One of the fundamental ethical principles in healthcare is respect for patient
autonomy—the right of patients to make decisions about their own bodies and medical
treatments. This principle is enshrined in the legal concept of informed consent. Informed
consent requires healthcare providers to disclose all relevant information about the risks,
benefits, and alternatives to a medical treatment or procedure, allowing patients to make
TEST BANK
Theory of Accounts
Intermediate
Financial Accounting
Part 1A & Part 1B
, Chapter 1
Overview of Accounting
Chapter 1: Theory of Accounts Reviewer Definition
of Accounting
1. Accounting has been given various definitions, which of the following is not one of those
definitions
a. Accounting is a service activity. Its function is to provide quantitative information, primarily financial in
nature, about economic entities that is intended to be useful in making economic decisions.
b. Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of
money, transactions and events which are, in part of at least, of a financial character and
interpreting the results thereof.
c. Accounting is a systematic process of objectively obtaining and evaluating evidence
regarding assertions about economic actions and events to ascertain the degree of
correspondence between these assertions and established criteria and communicating the
results to interested users.
d. Accounting is the process of identifying, measuring, and communicating economic information to
permit informed judgment and decisions by users of information.
2. It is the first process used in accounting. It refers to the identification of events as to whether they are
recognized or not in the financial statements.
a. Identifying b. Measuring c. Communicating d. Auditing
Healthcare**Healthcare is one of the sectors where ethical and legal issues are particularly pronounced.
Medical professionals regularly face situations that require them to make complex decisions that not only have
life-altering consequences for patients but also raise profound moral questions. These issues include:#### 2.1
**Patient Autonomy and Informed Consent**One of the fundamental ethical principles in healthcare is respec
for patient autonomy—the right of patients to make decisions about their own bodies and medical treatments
This principle is enshrined in the legal concept of informed consent. Informed consent requires healthcare
providers to disclose all relevant information about the risks, benefits, and alternatives to a medical treatment
or procedure, allowing patients to make
3. The following statements correctly refer to the accounting process.
I. Measuring is the accounting process of analyzing business activities as to whether or not they will be
recognized in the books.
II. Recognition refers to the process of including the effects of an event in the totals of the statement of
financial position or the statement of profit or loss and other comprehensive income through memo
entries.
III. Disclosure of events in the notes to financial statement without including in the totals of the
statement of financial position or statement of profit or loss and other comprehensive income is not
an application of the recognition principle.
IV. An accountable event is an event that has an effect on the assets, liabilities or equity of an entity and
its effect can be measured reliably.
V. Sociological and psychological matters are within the scope of accounting.
a. I, II, III, IV, V b. I, II, III, IV c. IV d. III, IV
Types of Events
4. These events involve changes in the economic resources or obligations of entities involving other
entities but do not involve transfers of resources or obligations
a. External events c. External events other than transfers
b. Non-reciprocal transfers d. Internal events
5. Events involving an entity and an external party.
, a. External events c. External events other than transfers
b. Non-reciprocal transfers d. Internal events
7. These events result to a sudden or unanticipated loss from fortuitous events.
a. Internal events c. External events other than transfers
b. Non-reciprocal transfers d. Casualty
Healthcare**Healthcare is one of the sectors where ethical and legal issues are particularly pronounced. Medic
professionals regularly face situations that require them to make complex decisions that not only have life-alte
consequences for patients but also raise profound moral questions. These issues include:#### 2.1 **Patient Au
and Informed Consent**One of the fundamental ethical principles in healthcare is respect for patient autonom
right of patients to make decisions about their own bodies and medical treatments. This principle is enshrined
concept of informed consent. Informed consent requires healthcare providers to disclose all relevant informati
the risks, benefits, and alternatives to a medical treatment or procedure, allowing patients to make
8. Which of the following statements is true?
I. Loss from theft should be classified as a nonreciprocal transfer
II. Internal events are changes in economic resources by actions of other entities that do not involve
transfers of enterprise resources and obligations
III. Nonreciprocal transfers involve the transfer of resources in only one direction, either from an entity
to other entities or from other entities to the entity.
IV. Internal events are sudden, substantial, unanticipated reductions in enterprise resources not caused
by other entities
V. Fire, earthquake and flood are examples of accountable events classified as internal events.
a. I, II, III, V b. I, III, V c. II, III, IV, V d. I, III, IV, V
9. All of the following are events considered as exchange or reciprocal transfer, except
a. purchase of investment in equity securities
b. sale of equipment for non-interest bearing note
c. subscription on the entity’s own equity instrument
d. exchange of a note payable for an account payable
e. borrowing of money from a bank
10. All of the following are events considered as nonreciprocal transfer, except
a. declaration of cash dividends c. payment of accounts payable
b. declaration of stock dividends d. imposition of fines
11. All of the following are events considered as external events other than transfers, except
a. obsolescence c. imposition of fines
b. inflation d. vandalism
12. All of the following are events considered as internal events, except
a. Transfer of goods from work-in-process to finished goods inventory
b. flood, earthquake, fire and other “Acts of God”
c. transformation of biological assets from immature to mature
d. vandalism committed by the entity’s employees
13. Which of the following events is considered an internal event?
a. sale of inventory on account
b. provision of capital by owners
c. borrowing of money
d. conversion of raw materials into finished goods
14. Which of the following events is considered an external event?
, b. contributions by owners d. degeneration of biological assets
16. Which of the following correctly relates to accountable events?
I. An obsolete asset which has no use was received in exchange of an existing asset. This transaction
may be classified as an exchange.
II. An entity exchanges a non-cash asset for another non-cash asset in an exchange
transaction with commercial substance. This is a reciprocal transfer.
III. An entity issues its shares of stocks in exchange for a non-cash asset. This is a reciprocal transfer.
a. I b. II c. II, III d. I, II, III
Healthcare**Healthcare is one of the sectors where ethical and legal issues are particularly pronounced. Medic
professionals regularly face situations that require them to make complex decisions that not only have life-alte
consequences for patients but also raise profound moral questions. These issues include:#### 2.1 **Patient Au
Informed Consent**One of the fundamental ethical principles in healthcare is respect for patient autonomy—t
patients to make decisions about their own bodies and medical treatments. This principle is enshrined in the le
of informed consent. Informed consent requires healthcare providers to disclose all relevant information abou
benefits, and alternatives to a medical treatment or procedure, allowing patients to make
17. An example of income derived from a nonreciprocal transfer is
a. compensation received as damages in a successful lawsuit
b. appreciation of property
c. land acquired from a stockholder as donation
d. settlement of a liability at less than its book value (RPCPA)
Measuring
18. Asset measurements in conventional financial statements
a. are confined to historical cost
b. are confined to historical cost and current cost
c. reflect several financial attributes
d. do not reflect output values (RPCPA)
19. Financial statements are said to be a mixture of fact and opinion. Which of the following items is factual?
a. cost of goods sold c. discount on capital stock
b. retained earnings d. patent amortization expense (Adapted)
20. On December 31, 200A, Annod Co. decided to end its operations and dispose its assets within three
months. At December 31, 200A, the carrying amount of an investment property was less than both its fair
value and net realizable value. The fair value is greater than the net realizable value. What is the
appropriate measurement basis for the investment property in Annod’s December 31, 200A statement
of financial position?
a. Historical cost c. Net realizable value
b. Fair value d. Current replacement cost
Communicating
21. These are the principal means through which an entity communicates its financial information to those
outside it.
a. managerial reports c. segment reports
b. financial statements d. directors’ statements
22. The analytical phase of accounting which significantly portrays the liquidity, solvency,
profitability of a business
a. interpreting c. summarizing
b. recording d. classification (RPCPA)
