Accountancy Readiness Test 1 Practice

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• Which stakeholder group requires information to regulate activities and determine taxation policies?
• Which statement describes a characteristic that is NOT part of faithful representation?
• Other Comprehensive Income is composed of income and expenses not presented as profit or loss under PFRS. Which statement is true about OCI?
• Which component is the Balance Sheet?
• Prudence is the inclusion of a degree of caution in making estimates under uncertainty and is commonly known as which term?
• Which accounting area is primarily used to support governance and risk management within an organization?
• Which method recognizes expense when benefits are expected to arise over several periods and the association with income cannot be directly determined?
• Measurement is the process of:
• Non-current liabilities are defined as which of the following?
• Business Accounting is also known as which of the following?
• Which statement about Current Assets is true?
• If going concern is not valid, what must be disclosed and what basis of reporting used?
• Trust Accounting deals with fiduciaries who hold customer money for what purpose?
• Liabilities are defined as which of the following?
• Which of the following is an example of a merchandising firm?
• Which of the following is NOT an intangible asset?
• Investors require information to determine what?
• Which principle allocates costs over multiple periods when there is no direct link to a specific income item?
• Which statement correctly describes a Corporation?
• Which statement best describes manufacturing firms?
• Which of the following is an example of Selling Expenses?
• Under the Matching Principle, expenses are recognized on the basis of:
• In what year was the FRSC established by the Board of Accountancy?
• Which statement best describes the ownership structure of a cooperative?
• What is the primary focus of the Conceptual Framework?
• An item is recognized as an asset if probable future benefits flow to the entity and the asset's cost or value can be measured reliably. This statement is true for which recognition concept?
• Which of the following is an example of a current liability?
• Which principle states that revenue should be recognized when earned and related expenses recognized in the same period?
• A present obligation is best described as what?
• Which description correctly defines a Partnership?
• Which principle requires accounting methods and procedures to be applied uniformly from period to period to achieve comparability?
• In a partnership, equity is referred to as what?
• The Cost of Sales Method is another name for which approach?
• What is the title of Luca Pacioli's notable work on accounting?
• Which term describes the cautious approach to ensure assets are not overstated?
• What does aqua-culture refer to?
• Which statement about managerial accounting is true?
• Which term is synonymous with Net Assets?
• Which statement defines Liabilities?
• Which statement best describes Income?
• Which of the following is an example of property, plant and equipment?
• Which of the following is a correct name for equity in a corporation?
• Lenders are interested in information to determine what?
• What characterizes the Accrual Basis of accounting?
• Which statement best describes the difference between managerial and financial accounting?
• Which statement defines Non-Current Assets?
• Which statement best defines a long-term investment?
• Recognition of a liability occurs when?
• What is the principal difference between the Nature of Expense Method and the Function of Expense Method?
• Which statement best describes the Function of Expense Method?
• Which statement best describes the primary difference in purpose between managerial accounting and financial accounting?
• Which depreciation example is listed under Selling Expenses for a store asset?
• Other Comprehensive Income is composed of income and expenses that are not presented as profit or loss as required by PFRS. Which statement is a typical example?
• Relevance is defined as information that is capable of influencing the decisions of capital providers by helping them evaluate past, present, or future events or confirm past evaluations.
• Which item is a selling expense?
• Verifiability helps assure users that information faithfully represents economic phenomena. Which statement best describes verifiability?
• Which statement best describes the asset recognition criterion?
• Which approach presents a separate income statement for profit or loss and a separate statement of comprehensive income beginning with profit or loss plus or minus other comprehensive income?
• Recognition of assets requires which condition?
• Which statement is true about the IASB?
• The financial structure of a company shows:
• Which statement defines Sole Proprietorship?
• Purposes of the Conceptual Framework include which item?
• Which item is considered an element of the conceptual framework's focus?
• Which statement is true about current liabilities?
• Going concern is an underlying assumption. Which option best describes it?
• Financial Performance is best described as being measured by which of the following?
• Which sector is composed of CPAs who work in government offices or public enterprises?
• Outflow of Resources Embodying Economic Benefits describes which concept?
• The concept 'Result of Past Transaction and Event' indicates what about assets?
• Adequate Disclosure Principle requires that if there is a material misstatement, proper disclosure should be made. What does this principle emphasize?
• The phrase Result of a Past Transaction or Event indicates which of the following about a liability?
• According to the American Institute of Certified Public Accountants, which statement defines accounting?
• Asset recognition requires which conditions?
• Verifiability in financial reporting is achieved when independent observers can research and reach a consensus that the depiction is faithful. Which option reflects this definition?
• Which principle requires that accounting records be based on reliable and verifiable data as evidence of transactions?
• The Birth of Auditing occurred in which year?
• Government accounting primarily involves which of the following?
• Solvency relates to the ability to pay for which type of obligations?
• What is the primary function of the financial statements?
• Timeliness in financial reporting means information is available when users need it and can influence decisions. Which option best reflects this definition?
• Which principle ensures assets or income are not overstated and liabilities or expenses are not understated?
• What is a primary function of FRSC?
• Flexibility in the context of the statement of financial position refers to the company’s ability to:
• What defines the Normal Operating Cycle?
• Which principle best describes cooperative membership?
• In the classification by function, which category would Advertising and Commission belong to?
• R.A. 3883 is the law governing which of the following?
• Which of the following is an example of a current asset?
• Comprehensive Income is defined as the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners.
• During which period were businesses required to keep accounting records?
• Suppliers and other Trade Creditors need information to determine what?
• Which qualitative characteristic of accounting information is defined as information capable of influencing the decisions of capital providers?
• Which statement correctly describes Recognition of assets?
• Which statement is NOT typically a current asset?
• Which stakeholder group has long-term involvement with the enterprise and a stake in its continuance?
• Which of the following is an example of Administrative Expenses?
• Which statement best defines Unit of Measure in accounting?
• Which of the following is NOT typically classified as a Selling Expense?
• Which statement is true about merchandising firms?
• What best describes the Philippine Institute of Certified Public Accountants (PICPA)?
• Which statement about Future Economic Benefits best describes assets?
• Which organizations were named as sectoral partners in the PICPA memorandum of agreement?
• Which statement about the Conceptual Framework is true?
• When was US GAAP developed?
• Which sector includes CPAs in the teaching profession, including academic administrators?
• The Accounting Entity (Separate Entity) assumption treats the business from the owner or management as what?
• Which description defines a Cooperative?
• Which activity is NOT included in agri-business?
• Estate Accounting is the accounting for fiduciaries who wind up the affairs of whom?
• In the provided examples, which item is categorized under Administrative Expenses?
• The cost principle requires that assets be recorded at what value?
• Since which period has accounting been characterized by collaboration among AICPA, FASB and SEC?
• What is the purpose of the accounting assumption?
• Which equation represents Capital or Equity?
• According to the American Accounting Association, how is accounting defined?
• Profit or Loss is the total of income minus expenses excluding Other Comprehensive Income. The resulting amount is commonly referred to as:
• Understandability in financial reporting refers to information that enables users with reasonable knowledge to comprehend its meaning. Which choice best captures this concept?
• Service firms are best described as firms that perform services for a fee, such as:
• Recognition of Liability requires which condition?
• What is the consequence for accountants found guilty of manipulating financial information?
• Asset recognition is recorded in the financial statements when which criteria are met?
• Which term describes the analysis showing which portion of claims on assets is funded by creditors versus by the company’s own equity?
• Which sector includes CPAs such as controllers and budget officers working in banks, manufacturing, merchandising, and service entities?
• What is the primary purpose of Cost Accounting?
• Where is the IASB based?
• Which of the following statements about the Conceptual Framework is true?
• Recognition of Income is recognized in the income statement when:
• What describes a Natural Business Year?
• R.A. 3883 is also known as which law?
• Which statement best describes an Expense?
• Which statement correctly describes accrual basis accounting?
• Which statement best defines comparability in financial reporting?
• Which organization uses the Conceptual Framework to develop IFRS?
• The Conceptual Framework focuses on which areas?
• Which policy recognizes expense immediately when no future economic benefits are expected or qualify for asset recognition?
• Which description matches the concept of an Expense?
• The Function of Expense Method is also known as the Cost of Sales Method.
• Which of the following is NOT a standard time period length used for general reporting?
• Capital or Equity is defined as what?
• Embezzlement occurs when accountants are given too much responsibility and little oversight. Which option matches this description?
• Which entity is characterized as an artificial being created by law?
• Tax accounting is based on enacted tax laws and includes the preparation of tax returns and consideration of the tax consequences of business transactions. It is primarily based on which source?
• Time-Period assumes the life of the business is divided into equal periods wherein at the end of each period, financial statements are prepared. Which option represents a valid example of a period length?
• GAAP provides a framework to ensure financial statements are reliable and comparable. Which statement best captures this purpose?
• Which organization created the Accounting Standards Council (ASC)?
• Tax Evasion is described in the material as:
• Public Practice CPAs provide services to the general public for a fee. Which option best describes this practice?
• If there is a conflict, which prevails?
• Institutional Accounting is the accounting for which entities?
• Measurement is defined as:
• Which of the following is a limitation of accounting?
• Which statement best describes agri-business?
• Forensic accounting is which field?
• Which stakeholder group is affected by information about the enterprise's trends and prosperity, especially from a public-interest perspective?
• How are assets classified as current or non-current?
• Accounting ethics refers to what?
• Which principle describes expense recognition over several periods when benefits are expected to arise over time and not tied to a specific income item?
• Which principle requires that accounting methods and procedures be applied uniformly from period to period to achieve comparability in the financial statements?
• The balance sheet provides information about liquidity, solvency, flexibility and financial structure. Which option is true?
• In accounting history, what does Credere mean in Latin?
• Public Practice CPAs provide services to which group?
• Which of the following is NOT a limitation of accounting?
• Which presentation method groups expenses by their nature and is commonly called the Single Step Approach?
• Which option best defines Equity?
• In accounting history, what is the meaning of the Latin term Debere?
• Administrative expenses pertain to expenses related to what?
• In the One Statement Approach, which components are presented in a single financial statement?
• Liquidity pertains to which aspect of a company's finances?
• Which of the following is an example of an intangible asset?
• According to the American Standards Council, accounting is defined as what?
• Which set lists the three characteristics that define faithful representation?
• Which item would not typically appear as a Selling Expense?
• Which statement best describes Reliable Basis for the Measurement?
• The Accounting Standards Council (ASC) was created to do what?
• Which term describes managerial accounting in the context of management needs?
• Which of the following is an example of Other Comprehensive Income?
• GAAP stands for Generally Accepted Accounting Principles. What is GAAP primarily used for?
• Which statement about the calendar year is true?
• Which statement best describes financial accounting?
• Merchandising firms are defined as those that:
• Which user group is described as being interested in the enterprise's ability to pay dividends?
• Institutional Accounting is primarily used for which entities?
• Which item is an example of a Liability?
• Which statement describes the Financial Reporting Standards Council (FRSC)?
• Administrative expenses include which of the following?
• Income in accounting is defined as:
• Fiscal year is the period that begins on the 1st day of any month of the year except January and ends on the last day of the twelfth month. Which statement best reflects this rule?
• Equity or Capital is best described as:
• Receivership accounting deals with the management of accounts by a fiduciary appointed to take charge of a financially unstable business pending its disposition. Which option best describes this practice?
• Internal auditing is best described as:
• When alternatives exist, the alternative with the least favorable effect on equity should be chosen. Which term describes this?
• In this context, what does hybrid mean?
• Luca Pacioli is generally associated with which accounting concept?
• Commerce and Industry refers to CPAs employed in private firms such as banks, manufacturing, merchandising, and service entities. Which statement best describes this sector?
• Long-term obligations are defined as those that will mature for more than 12 months from the reporting period.
• Which user group would most likely seek information about remuneration and retirement benefits?
• External auditing is best described as:
• Calendar year is defined as which period?
• The fiscal year may begin on which of the following days?
• Assets definition?
• Which statement about qualitative characteristics is true?
• Which date marks the invention of the Abacus according to the historical timeline?
• Which statement best captures the essence of internal auditing?
• Which statement best describes Property, Plant and Equipment?
• Which group is concerned with stability and profitability to assess remuneration and retirement benefits?
• Qualitative characteristics are the attributes that make information useful. Which statement best reflects this?
• Income is recognized when:
• Which description best defines an Asset?