LET’S CHECK

Activity 1. All this information presented in the metalanguage and essential knowledge help you to understand
better accounting and its environment. Let us check your understanding of these terms by providing answers on the
space provided.

1. Identifiying is the phase of accounting where transactions are analyzed whether accountable or non-accountable
events.
2. Sole Proprietorship is a form of organization whose owners are personally liable for the debts incurred by the
business.
3. Corporation is a form of business organization whose owners are not liable for debts of the business.
4. Accounting is an information system that measures, processes and communicates financial information about an
economic entity.
5. Company ABC obtained loan from Metrobank company to finance plant expansion. This is an example of
financing activities type of business activities.
6. Collected the accounts of the customer and payment of account to supplier is an example of operating activities
type of business activities.
7. Constructed a building for the factory is an example of financing activities type of business activities.
8. It is an independent examination that ensures the fairness and reliability of the reports that management submits
to users, this branch is called auditing activities.
9. Mr. Reyes invested cash into his business to engage in repair shop, is an example of investing activities type of
business activities.
10. An organization in Asia that envisioned a stable, prosperous and highly competitive economic region is called
Establishment Of ASEAN.
11. An ancient law that requires merchants to give buyers a sealed memorandum containing the agreed price( in
the present times this is the BIR Code) is called Code of Hammurabi.
12. The accountant of primitive age is called Evolution of Accounting.
13. Who invented double-entry bookkeeping? Luca Pacioli.
14. It is during this time where Corporations were established and the factory system was used to create products.
Industrial Revolution.
15. Group of businessmen whose assets is P3m or less is called micro.
16. Returned of defective items to the supplier is an example of operating activities type of business activities
17. Paid salaries and taxes of the business is an example of financing activities type of business activities.
18. Materiality an accounting principles which states that omitting or misstating this information could influence
users of the financial statements.
19. An accounting principles that states that similar items should receive a similar accounting treatment is called
consistency principle.
20. What accounting concept that should be considered when an owner of a business takes goods from inventory
for his personal use entity concept.
21. This is a principle in accounting that support the practice of recording an asset based on the amount actually
paid and not what the management thinks is historical cost.
22. The financial accounting process provides information about economic activities of an enterprise for a
specified accounting period that is shorter than the life of the enterprise, this practice is in compliance to concept of
periodicity concept.
23. An accountant employed by a particular business firm or not-for-profit organization, perhaps as chief
accountant, controller or financial vice president are said to be engaged in private accounting.
24. A business organization is owned by people called members is a cooperative.
25. One basic principles in accounting states that an accounting transaction has to be supported by sufficient
evidence to allow two or more qualified individuals to arrive at essentially similar conclusion is called objective
principle.
26. Carrying out professional responsibilities diligently and in accordance with applicable technical and
professional standards is description of the principle of professional competence and due care.
27. A professional accountant should be straightforward and hones in all professional and business relationships is
in consonance with the principle of integrity.
28. This is an organization whose main function is to establish and improve accounting standards that will be
GAAP. This group is Accounting Standards Council (ASC).
29. Accountant do not recognize that the value of the peso changes over time. This concept is called stable
monetary unit concept.
30. The set of guidelines and procedures that constitute acceptable accounting practice at a given time is called
GAAP.
31. The Filipino accountants should possess knowledge to enable them to compete internationally. (Enumerate
here the knowledge required)
-general knowledge
-core knowledge
-conversant
-proficient
32. A branch in accounting that concern with the preparation and publish of complete financial statements to
intended users is called financial accounting.
33. What area in accounting that is task to manage financial resources of the business? Financial Management.
34. A CPA without any permission divulge an information about an entity under audit, this is in violation of
confidentiality principle in professional ethics.
35. An information that is relevant but not captured on the face of the financial statements is normally reflected in
the notes to financial statement, this practice is in compliance of adequate disclosure principle.
36. What criteria of GAAP that supports the practice of preparing financial statements on time so that it can be
used in making a decision? Criteria of Relevance.
37. Accrual accounting of income is an application of revenue recognition basic principle.
38. Accrual accounting of expense is an application of expense recognition basic principle.
39. This basic ethical principle requires that CPA must adhere to relevant laws and regulation and should avoid
acts that discredit the profession is called professional behavior.
40. This is a report where the entity’s financial performance is reflected income statement.
41. This is a report where the entity’s financial stability, liquidity and profitability is reflected, financial analysis.
42. What type of business organization owned by shareholders? Corporation.
43. This branch of accounting includes financial and non-financial data from various sources and utilized it for
specific decision is called management accounting.
44. This area involves collection of financial data and entering these data in the books of accounts, this is called
bookkeeping.
45. False . For reporting purposes, the personal assets and debts of a business owner should be combined with the
assets and debts of the business.
46. False. For accounting purposes, a business and its owner are considered one and the same entity.