FINANCIAL ACCOUNTING

TRUE

Events are NOT ACCOUNTABLE when they cannot be QUANTIFIED or EXPRESSED in terms of a UNIT OF MEASURES.

CONTROLLER

-the highest accounting officer in a entity is known as the___________

BOOKKEPING

-this is procedural and largely concerned with development and maintenance of accounting records. It is the " HOW" of accounting. -is the procedural element of accounting as ARITHMETIC is a PROCEDURAL element of mathematics.

PRIVATE ACCOUNTING

- CPA are employed in business entities as accounting staff, chief accountant, internal auditor and controller -this includes maintaining the records, producing the financial reports, preparing the budgets and controlling and allocating the resources of the entity. - responsibility for the determination of the various taxes the entity is obligated to pay.

Economic activities

- an entity referred to as TRANSACTIONS which may be classified as EXTERNAL and INTERNAL.

Financial Statements

- is the key product pf information system. -documents that report financial information about an entity to decision makers -tells how well an entity is performing in terms of PROFITS and LOSSES and WHERE it stands in financial terms.

ASC

-Accounting is a service activity -function to provide QUANTITATIVE INFORMATION -primarily FINANCIAL IN NATURE -USEFUL in MAKING ECONOMIC DECISION

Information system

-Accounting is actually __________ because it measures business activities, processes information into reports and communicates the reports to decision makers. Personal planning, education expenses etc.

Identifying

-accounting is process of recognition or no recognition of business activities as "ACCOUNTABLE" events.

CAT-AICPA or AICPA

-accounting is the ART OF RECORDING -CLASSIFYING -SUMMARIZING in significant manner and in terms of money

AAA

-accounting is the process of IDENTIFYING -MEASURING -COMMUNICATING ECONOMIC INFORMATION

EXTERNAL TRANSACTIONS

-also known as EXCHANGE TRANSACTIONS, are those economic events INVOLVING ONE ENTITY AND ANOTHER ENTITY

RECORDING

-also known as journalizing, is the process of SYSTEMATICALLY MAINTAINING A RECORD of all economic business transactions after they habe been identified and measured.

INTERNAL TRANSACTIONS

-are economic events INVOLVING THE ENTITY ONLY. take place entirely whithin the entity

TRUE

-classifying is accomplished by POSTING TO THE LEDGER

FALSE

-fiancial statement without monetary amounts would be intelligble and comprehensive

AUDITING

-has traditionally been the PRIMARY SERVICE offered by most public accounting practitioners - specifically EXTERNAL AUDITING is the "EXAMINATION OF FINANCIAL STATEMENTS BY THE INDEPENDENT CPA FOR THE PURPOSE OF EXPRESSING AN OPINION as the FAIRNESS with which the financial statements are prepared"

TRUE

-if accounting information is to be useful, it must be expressed in terms of common financial denominator.

PUBLIC ACCOUNTING

-individual practitioners, small accounting firms and large multinatioanl organizations that reneder INDEPENDENT and EXPERT FINANCIAL SERVICES TO THE PUBLIC. - public accountants has three kinds of services.AUDITING, TAXATION, and MANAGEMENT ADVISORY SERVICES.

AUDITING

-is ANALYTICAL. the work of the auditor begins when the work of the accountant ends.

CASUALTY

-is any sudden and unanticipated loss from fire, flood , earthquake, and other event ordinarily termed as an act of GOD

Accounting

-is essentially "CONSTRUCTIVE" in nature, this is only ceases when financial statements are already prepared. -is CONCEPTUAL and is concerned with the "WHY", "REASON" or justification for any action adopted. -is used in references only to a particular field of accountancy such as PUBLIC ACCOUNTING, PRIVATE ACCOUNTING, and GOVERNMENT ACCOUNTING.

FINANCIAL ACCOUNTING

-is primarily concerned with the recording of business transactions and the eventual preparation of financial statements. -this focuses on GENERAL PURPOSE REPORTS known as FINANCIAL STATEMENTS intended for INTERNAL and EXTERNAL. - area of accounting that emphasizes reporting to CREDITORS and INVESTORS

EXTERNAL AUDITING

-is the "ATTEST FUNCTION" of independent CPAs

CLASSIFYING

-is the SORTING OR GROUPING of similar and interrelated economic transactions into their respective classes.

MANAGERIAL ACCOUNTING

-is the accumulation and preparation of financial reports for INTERNAL USERS ONLY -is the area of accounting that emphasizes developing accounting information for use WITHIN AN ENTITY.

BOARD OF ACCOUNTANCY

-is the body authorized by law to promulgate rules and regualtions affecting the practice of the accountancy profession in the philippines. -theu are responsible for preparing and grading the philippine CPA examination.

HISTORICAL COST

-is the most common measure of financial transactions.

SUMMARIZING

-is the preparation of FINANCIAL STATEMENTS which include; -Statement of financial position -Income statement -Statement of comprehensive income -Statement of changes in equity -Statement of cashflows

TAXATION SERVICE

-is the preparation of annual income tax returns and determination of tax consequences of certain proposed business endeavors. The CPA not infrequently represents the client in tax investigation. -to offer this service effectively and efficiently, the public accountant must be thoroughly familiar with the tax law.

COMMUNICATING

-is the process of PREPARING AND DISTRIBUTING accounting reports to potential users of accounting information.

THE PHILIPPINE PESO

-is the unit of measuring accountable economic transactions.

MANAGEMENT ADVISORY SERVICES

-it has no precise coverage but is used; generally to refer to service to clients on matters of accounting, finances, business policies, organization procedures, product costs, distribution. -advice on installation of computer system, quality control, installation and modification of accounting system, budgeting, forecasting,design or modification of retirement plans and even entity mergers and takeovers.

RECORDING, CLASSIFYING, AND SUMMARIZING

-it is the communication process

REPUBLIC ACT NO. 9298

-it is the law regulating the practice of accountancy in the philippines also known as the "PHILIPPINE ACCOUNTANCY ACT 2004"

ACCOUNTANCY

-refers to the profession of accounting practice

TRUE

A certificate of accreditation shall be issued to CPA in public practice only upom showing in accordance with rules and regulations promulgated by the board of accountancy. And approved by the professional regulation commission that such registrant has acquired a minimum of 3years of meaningful experience in any of the areas of public practice including taxation.

ASC

Accounting Standards council

AAA

American accounting association

TRUE

An event is accountable or quantifiable when it has and effect on ASSETS, LIABILITIES and EQUITY.

True

CPA genereally practice their profession in three main areas, namely PUBLIC ACCOUNTING, PRIVATE ACCOUNTING, GOVERNMENT ACCOUNTING.

Continuing professional education

CPE

TRUE

In the philippines , in order to qualify to practice the accountancy profession, a person must finish a degree in BACHELOR OF SCIENCE IN ACCOUNTANCY and pass a very difficult government examination given by the board of accountancy.

LEDGER

Is a group of "ACCOUNTS" which are systematically CATEGORIZED into asset account, liability account, equity accounts, revenue accounts and expense accounts.

PRODUCTION

Is the process by which rescources are transformed into products

TRUE

Not all business activities are accountable

TRUE

Only economic activities are emphasized and recognized in accounting

TRUE

Potential users, like investors, owners, managers, creditors and other interseted parties. Actuallu it os the reason thag accounting has been called the "UNIVERSAL LANGUAGE OF BUSINESS"

TRUE

Production and casualty loss are example of internal transactions

True

SEC or securities and exchange of commission SHALL NOT REGISTER ANY CORPORATION organized for the practice of public accountancy.

True

SINGLE PRACTITIONERS and PARTNERSHIPS for the practice of public accountancy shall be regustered CPA in the philippines

TRUE

The CPA, firms and partnerships of CPA, including partners and staff members thereof, are required to register with the BOARD OF ACCOUNTANCY and PROFESSIONAL REGULATION COMMISSION for the practice of public accountancy

True

The basic objective of accounting is "to provide quantitative financial information about a business that is useful to statement users particularly owners and creditors, in making decisions" In short accountants primary task is to supply financial information to statement users so that they could make informed judgement and better decision.

Identifying as the ANALYTICAL component Measuring as the TECHNICAL component Communicating as the FORMAL component

The definition of accounting has a number of components, namely;

American accounting association

The definition of accounting thay has stood the test of time given by _____________ States thay "the very purpose of accounting is to provide quantitative information to be be useful on economic decision"

True

The focus of government accounting is "the custody and administration of public funds"

TRUE

The following measurement base are -Historical cost -current cost -realizable value -present value

True

The major objective of the private accountant is to assist management in planning and controlling the entity's operation.

FALSE

The sociological and psychological matters are not beyond the province of accounting.

TRUE

The subject matter of accounting is the ECONOMIC ACTIVITY or the MEASUREMENT OF ECONOMIC RESOURCES and ECONOMIC OBLIGATIONS.

GOVERNMENT ACCOUNTING

This "encompasses the process of ANALYZING, CLASSIFYING and SUMMARIZING and COMMUNICATING all transactions involving the RECEIPT and DEPOSITION of government funds and property and interpreting the results thereof"

MEASURING

This accounting process is the assiging of peso amounts to the accountable economic transactions and events

1. Quantitative information 2. Information is Financial in nature 3. The information Useful in decision making

What are the important points made in accounting definition.

CAT-AICPA or AICPA

committee on accounting terminology of the american institute of certified public accountants

TRUE

the auditor examines the financial statements to ascertain whether they are in conformity with GAAP