Prelim Exam in Acctg. 213

DR. GLORIA D. LACSON FOUNDATION COLLEGES, INC.
Castellano, San Leonardo, Nueva Ecija

Tel No. ( 044 ) 486 – 2919 / Fax (044) 486-29-18
PRELIM EXAM IN ACCOUNTING 213
I. MC. CHOOSE THE BEST ANSWER. WRITE THE LETTER OF THE CORRECT ANSWER USING
CAPITAL LETTER. WRITE YOUR ANSWER BEFORE THE NUMBER.
1) Which of the following definition of accounting is correct?

a) Accounting is a service activity. Its function is to provide quantitative information primarily financial in nature that is
intended to be useful in making economic decisions.
b) Accounting is the Science of recording, classifying, summarizing(RCS--communication process)
c) PROCESS of identifying, measuring, computing (IMC)
d) Accounting is MATH
2) We all know that accounting is a process of identifying, in which component of accounting does identifying belong or
under?
a) Analytical Component
b) Technical Component
c) Formal Component
d) Mathematical Component
3) Accounting is a process of measuring, in what component it is belong?

a) Analytical Component
b) Technical Component
c) Formal Component
d) Mathematical Component
4) In order to be identifiable, a certain event must be quantifiable or expressed in terms of a unit of measure. It must have
an effect on _____ ,_____, and ______.
a) Income, Revenue, Expense
b) Capital, Investment, Stocks
c) Assets, Liability, Capital
d) Assets, Liability, Owners Equity
5) It is also known as exchange transaction which involves 2 entities. Example is payment of salaries to employees.
a) External transaction c) Around Transaction
b) Internal Transaction d) Under Transaction
6) Examples of this kind of transaction are production and casualty loss (unanticipated losses, act of god).
a) External transaction
b) Around Transaction
c) Internal Transaction
Tel No. ( 044 ) 486 – 2919 / Fax (044) 486-29-18
d) Under Transaction
7) Accounting is the _____ of business because of the communication process.

a) Interpretation
b) Sign
c) Language
d) Book
8) It is accomplished by posting to the ledger.

a) Classifying
b) Summarizing
c) Pasting
d) Copying
9) Preparing of FS happened in this stage of accounting cycle.

a) Classifying
b) Summarizing
c) Pasting
d) Copying
10) Their primary task is to supply financial information to statement users so that they could make informed judgment
and better decision.
a) Auditor
b) Creditor
c) Students
d) Accountants
11) What is the Republic Act that constitute the Philippine accountancy act of 2004 regulates the practice of accountancy in
the Phil.?
a) Rep. Act 9292
b) Rep. Act 9892
c) Rep. Act 9982
d) Rep. Act 9298
12) What body of Government authorized by law to promulgate rules and regulations affecting the practice of the
accountancy profession?
a) BIR
b) BOC
c) BSP
d) BOA
13) Certificate of registration shall be issued if the registrant has acquired a minimum of ___ years of meaningful
experience in any areas of public practice including taxation. It will be valid for ___ years, renewable every __ years
upon payment of required fees.
a) 1, 2, 3
b) 2, 2, 3
c) 3, 3, 3
Tel No. ( 044 ) 486 – 2919 / Fax (044) 486-29-18
d) 3, 2, 3
14) What is the highest accounting officer?

a) CEO
b) COORDINATOR
c) DEAN
d) CONTROLLER
15) Who examines FS to ascertain whether they are in conformity with GAAP.
a) Auditors
b) Accountants
c) Bookkeepers
d) Heads
16) It is the underlying theory for the development of accounting standards and revision of previously issued accounting
standards. Assists FRSC, preparers of FS, users and auditors.
a) Framework
b) Standard
c) Rule
d) None of the Above
17) ______ is largely portray the financial effects of past events and do not necessarily provide nonfinancial information. It
shows the result of the stewardship of management or the accountability of management for the resources entrusted to
it.
a) Financial Reports
b) Financial Books
c) Book of Accounts
d) Financial Statements
18) Which statement is Correct?

 Capacity for adaption or financial flexibility- using the entity’s available cash for unexpected requirements and
investment opportunities.
 It is may be accomplished through raising cash at a short notice through borrowing, sale of securities, disposal
of assets with disrupting normal operations
a) Only first statement is correct.

b) Only second statement is correct.
c) Both statements are correct.
d) Neither of the two is correct.
19) Which of the ff. is Correct?

a) Entity theory= A=L+C (income statement)
b) Proprietary= A-L=C (statement of FP)
c) Residual equity= A-L-preference/OS=C
d) Fund Theory= Fund= Cash inflows-cash outflows (custody and administration of funds)
Tel No. ( 044 ) 486 – 2919 / Fax (044) 486-29-18
e) All of the Above
20) It is the provision of financial information about an entity to external users. Not just financial statements but also other
means of communicating information. It includes non-financial information.
a) Financial Statements
b) Financial Accounting
c) Financial Reporting
d) Financial Books
21) Which of the following is not part of the objectives of financial reporting?
a) Provide information useful in investment, credit, and similar decision
b) Cash flow prospects
c) Resources and claims to those resources and changes in them.
d) None of the Above
II. Enumerate the following;
1) Four principal qualitative characteristics


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2) Ingredients of Reliability
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3) 2 Concepts of Capital Maintenance

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III. ESSAY
One of the Principal Qualitative Characteristics of Accounting is Relevance. Explain the meaning of
Relevance and why it is one of the principal characteristic of accounting.

Prelim Exam in Acctg. 213

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DR. GLORIA D. LACSON FOUNDATION COLLEGES, INC.

Castellano, San Leonardo, Nueva Ecija

PRELIM EXAM IN ACCOUNTING 213

1) Which of the following definition of accounting is correct?

3) Accounting is a process of measuring, in what component it is belong?

7) Accounting is the _____ of business because of the communication process.

8) It is accomplished by posting to the ledger.

9) Preparing of FS happened in this stage of accounting cycle.

14) What is the highest accounting officer?

18) Which statement is Correct?

a) Only first statement is correct.

19) Which of the ff. is Correct?

e) All of the Above

II. Enumerate the following;

1) Four principal qualitative characteristics

3) 2 Concepts of Capital Maintenance

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