AE 13 FINANCIAL ACCOUNTING & REPORTING
PRELIM. EXAM.
NAME:___________________________
I. IDENTIFICATION
1. ____________________ at the end of each accounting period, the accountant summarizes the
information processed in the accounting system in order to produce meaningful reports.
2. ____________________ is a process with the basic purpose of providing information about economic
activities that is intended to be useful in making economic decisions.
3. _______________________ Information expressed in money.
4. _________________________ Information expressed in words or descriptive form.
5. _________________________ Information expressed in numbers, quantities or units
6. _________________________ refers to a process of recording the accounts or transactions of an
entity.
7. _____________________________________ is information designed to meet the common needs of
most statement users.
8. ____________________________________ is information designed to meet the specific needs of
particular statement users.
9. ____________________the accountant analyses each business transaction and identifies whether the
transaction is an accountable event or non-accountable event.
10. _________________the accountant recognizes (i.e., records) the identified “accountable events”. This
process is called “journalizing”
II. ENUMERATION
Types of business according to activities:
1.
2.
3.
Examples of service businesses include:
4.
5.
6.
7.
8.
9.
10.
III. Multiple choices
1. Under this concept, the business is viewed as a separate persons, distinct from its owner(s).
a. Separate Entity Concept
b. Going Concern Assumption
c. Matching
2. Under this concept, some costs are initially recognized as assets and charged as expense only when the
related revenue is recognized.
a. Historical Cost
b. Matching
c. Accrual Basis of accounting
3. Under this concept, assets are initially recorded at their acquisition cost.
a. Going concern Assumption
b. Separate Entity Concept
c. Historical cost
4. Under this concept, the life of the business is divided into series of reporting periods.
a. Time period
b. Matching
c. Prudence/Conservatism
5. Under this concept, the accountant observes some degree of caution when exercising judgements
needed in making accounting estimates under conditions of uncertainty.
a. Time period
b. Prudence/Conservatism
c. Going concern Assumption
6. This concept assets, liabilities, equity, income and expenses are stated in terms of a common unit of
measure
a. Materiality Concept
b. Cost Benefit
c. Stable Monetary unit
7. Under this concept, the costs of processing and communicating information should not exceed the
benefits to be derived from the information’s use.
a. Cost Benefit
b. Consistency Concept
c. Materiality
8. All information necessary for users to have a complete understanding of the financial statements is
provided.
a. Timeliness
b. Completeness
c. Free from error
9. Information is selected or presented without bias.
a. Free from error
b. Completeness
c. Neutrality
10. These characteristics support the fundamental characteristics
a. Enhancing qualitative characteristics
b. fundamental qualitative characteristics
c. Faithful representation
