Name: Francisco, Kisha Faith S.

Score:
Class Schedule: MW, 4:30 PM – 6:00 PM Date: August 24, 2024

Essay Questions

Instruction: Answer the following essay questions in your answer sheet.

1. Explain the difference between a bookkeeping job and an accounting job.

The simple difference between both jobs lies on its relation in completing the
accounting process. Bookkeeping is the first step of the process that covers the
systematic recording of business transactions in financial terms, thus it looks out
onto the development and maintenance of the accounting records. Then
accounting follows in compiling and presenting data in preparation of its
presentation among the stakeholders. It is higher in terms of function than
bookkeeping and it analyzes and interprets the information recorded. It signifies
that the sphere if accounting starts after the bookkeeping ends.

2. Identify the various users and explain their interests on the accounting
information in relation to the past, present, and future.
Users are divided according to their needs. The most common needs of
stakeholders are met by the General Purpose Accounting Information and their
specific needs from particular stakeholders are met by the Special Purpose
Accounting Information. With that, before providing this to the external users,
internal users use accounting information to evaluate their key financial
performance in relation to their objectives. With this, they then create reports
that will be sent out to various stakeholders depending on what they need to
know. Potential investors aims to assess if they will have an ensured ROI as they
invest and a profit margin that weights how much they will earn on this
investment. Various creditors will need these information in order to determine
the ability of the business to comply to their debts and how long or short can
they resolve this balances. Suppliers also needs these information so that they
can prepare for their forecast of supplies from the inventory turnovers. Lastly,
the government like BIR, will check its remittance as taxpayers and SEC, who will
check if the company is regulated justly.

3. If you plan to provide bookkeeping services to your would-be clients, does this
include doing the legwork for processing business registration for a sole
proprietorship? Explain.
Considering the fact that I will be working with a sole proprietor who is probably
new to the business, I could be of assistance in the processing of the
registration of the business. However, my job is still mainly focused on
maintaining the business financial records and its compliance to the regulations
of tax, so in short, I will be able to assist but the proprietor must be in the whole
process as he or she is the sole owner, so the knowledge of the business and its
operations must be mainly known and familiar to him or her.

4. Identify what particular phase of accounting is illustrated in the following

separate scenarios and explain your answer:

a) Footing the trial balance of balances.

This is included in the process of summarizing. Footing is defined as calculating
the total credits and debits of the accounts, thus determines the balances that
are then reported on the financial statements.
 b) Cash sales is entered on the Cash Receipts Journal.
This is included in the process of recording as it is recording a transaction,
though it is specifying as classifying an account into the journal it belongs, it is
still under recording as it is taking note of the activities or transactions in this
specific journal/.

c) Explaining to the sole proprietor the items found on the notes to financial
statements and the significance of the financial ratios.
This is included in the process of interpreting as it is an action of
communicating the results of the company's standing based on the
transactions or financial events that occurred over time.

d) Analyzing business transactions in terms of debit and credit elements.

This is included in the process of recording as it involves the use of the general
journal. This process involves recording in different journals based on the
different transactions such as sales, purchases, cash receipts, cash
disbursements, payroll journals and general journal. By this, both transactions of
debit and credit will show and the flow of both elements will clearly project, thus
allows the analysis of transactions and continues on posting on the general and
subsidiary ledgers.

5. Corporate social responsibility (CSR) and corporate governance are the latest
concepts related to accounting as a social science. Hence, Accounting is treated
as a social science in the 21st century. Agree or disagree? Explain.
I agree that accounting should be treated as a social science in a sense that its
main goal is to provide factual information to its users, thus coincides with
corporate social responsibility. It also aims to abide to the different principles and
standards provided by GAAP and other accounting associations, which correlates
to the thought of corporate governance as a controlled organization that abides
to the rules and regulations stated by the associations and institutes in the field.
Accounting adapts various general subjects, one of which I can consider is social
sciences as it aims to be of service to the public with responsibility and honesty
in providing trustworthy and correct information to its main users.
Name: Francisco, Kisha Faith S. Score:
Class Schedule: MW, 4:30 PM – 6:00 PM Date: August 24, 2024

Exercise 1-1 True or False.

On the blank space provided before each number, write T if the statement is true;
write F if the statement is false. For a false statement, underline the word or
phrase that makes it false.

F 1. Management accounting is oriented towards the preparation of financial

statements to both internal and external users.

T 2. Bookkeeping is a mechanical process that records the routine economic

activities of a business.

T 3. Internal Auditing is an independent, objective assurance and consulting

activity designed to add value and improve an organization's operations.

F 4. Accounting information, though financial in nature, are presented in

qualitative form.

F 5. The summarizing phase is technically known as bookkeeping

F 6. External users of the financial statements include the potential

investors, creditors, president and employees.

T 7. Bookkeeping covers the procedural aspects of accounting work and

embraces record keeping function.

T 8. In recording certain events, estimates have to be made which requires

personal judgment. It is very difficult to expect accuracy in future
estimates hence objectivity is affected.

T 9. The financial statements are never free from subjectivity factor as these are
largely the outcome of personal judgement of the accountant with regard
to the adoption of the accounting policies.

T 10. Cooperative is a duly registered association of persons, with a common

bond of interest, who have voluntarily joined together to achieve a lawful
common social or economic end, making equitable contributions to the
capital required and accepting a fair share of the risks and benefits of the
undertaking in accordance with universally accepted cooperative
principles.
Name: Francisco, Kisha Faith S. Score:
Class Schedule: MW, 4:30 PM – 6:00 PM Date: August 24, 2024

Exercise 1-2

Identify the following businesses as follows:

A. Service firm
B. Merchandising firm
C. Manufacturing firm

B 1. Atlantic Hardware

A 2. Cebu Parklane International Hotel

A 3. E & J Vulcanizing Shop

A 4. E-Jeepney

A 5. Gothong Southern Shipping Lines

A 6. Home Development Mutual Fund

C 7. Jeston Mining & Development Corp.

A 8. Kentucky Fried Chicken

A 9. Makati Medical Center

B 10. Ministop

A 11. Palawan Pawnshop

C 12. Pull & Bear

B 13. Robinson’s Supermarket

A 14. Security Bank

A 15. Sony Authorized Service Center

A 16. Sumilon Bluewater Resort

C 17. Universal Robina Corp.

A 18. Vikings Luxury Buffet

C 19. Virginia Farms, Inc.

B 20. Watsons
Name: Francisco, Kisha Faith S. Score:
Class Schedule: MW, 4:30 PM – 6:00 PM Date: August 24, 2024

Exercise 1-3

Multiple Choice (n x 1) Encircle the letter of your chosen best answer.

1. This is the primary goal of a business

a. make a name in the community c. increase the selling price of its
product/service
b. earn profit d. none of these

2. The basic purpose of accounting is

a. To provide the information that the managers of an economic entity need
to control its operations
b. To provide information that the creditors of an economic entity can use
in deciding whether to make additional loans to the entity.
c. To measure the periodic income of the economic entity.
d. To provide quantitative financial information about an entity that is useful in
making rational economic decisions.

3. The objectives of financial reporting are based on

a. the need for conservatism. c. international financial reporting
standards
b. reporting on management’s stewardship d. the needs of the users of the
information

4. Which of the following is not a user of internal accounting information?

a. creditor b. store manager c. chief executive officer d. chief financial
officer

5. Which of the following does not describe accounting?

a. is an end rather than a means to an end.
b. useful for decision making.
c. used by business, government, non-profit organizations and individual.
d. language of business.

6. External users of the financial information include all of the following, except
a. Labor unions c. General public
b. Stockholders d. Line managers

7. The communication phase of accounting is accomplished by

a. processing data c. reporting to decision makers
b. recording data d. storing data

8. Which area of public accounting means the examination of financial

statements by a CPA for the purpose of expressing an opinion as to the
fairness of the statements?
a. Internal auditing c. External auditing
b. Taxation d. Management advisory services
Chapter 1 Overview of Accounting
9. They encompass the conventions, rules, and procedures necessary to
define what is accepted accounting practice.
a. Generally accepted accounting principles.
b. Accounting assumptions
c. Accounting concepts
d. Conceptual frameworks.

10. The form of business organization where capital is owned by two or more persons
who agreed to divide their net income or net loss based on the agreed profit and
loss ratio:
a. sole proprietorship b. partnership c. corporation

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