Chapter 1 ACCTG Exercises

EXERCISE 1
(TRUE or FALSE)
Name: Year and Section:
Date: Score:
Write TRUE if the statement is correct or FALSE if it is incorrect.
_________________1. Accounting is an art and a perfect science
_________________2. Internal accounting reports are more strictly governed by the required accounting
standards than the general accounting for external users
_________________3. Employees and investors are external users of financial reports
_________________4. The success or failure of business is due to accounting records are kept
_________________5. Bookkeeping is synonymous to accounting
_________________6. Auditing is performed before financial accounting starts
_________________7. The American Institute of Certified Public Accountants describes Accounting as an

Art.
_________________8. Management accounting provides reports for internal users. These financial
reports observe generally accepted accounting principles
_________________9. Bookkeeping is the procedural portion of the Accounting Process
_________________10. Accounting identifies, measures and communicates information about economic

entities for use in making economic decisions.
_________________11. Auditing is recording, classifying and summarizing of business transactions
_________________12. In classifying phase of accounting, items are sorted and grouped.
_________________13. The Accounting Standards Council sees accounting as a service activity
_________________14. Accounting is broader in scope than Bookkeeping
_________________15. Accounting serves as a means of communication in the business only
ACCTG 101- FINANCIAL ACCOUNTING AND REPORTING (FUNDAMENTALS) 1|Page

EXERCISE 2
(MULTIPLE CHOICE)
Date: Score:
Encircle the letter that corresponds to the best answer
1. The function of Accounting is to provide
a. Quantitative Information
b. Qualitative Information
c. Quantitative and Qualitative Information
d. Mission and Vision
2. Which of the following is not an appropriate description of Accounting?
a. Accounting is an information system
b. Accounting is an exact science and art
c. Accounting is the language of Business
d. Accounting is a process that leads to understandable information
3. The following are the external users of general purpose financial statements, except:
a. Creditors
b. Managers
c. Government
d. Employees
4. Statement 1: Accounting is useful in making economic decisions
Statement 2: Accounting demands critical thinking and creative skills
a. Only Statement 1 is correct
b. Only Statement 2 is correct
c. Both Statements are correct

d. Both statements are incorrect
5. This work in accounting is performed after the work of accountant is completed
a. Bookkeeping
b. Recording
c. Auditing
d. Reporting
6. Accountants employed by a business firm or a non- government organization are said to be

engaged in
a. General Accounting
b. Public Accounting
c. Private Accounting
d. Independent Accounting
7. These external users of financial reports primarily use accounting information to assess
their return on investment im the business
a. Government and its agencies
b. Investors
c. Management
d. Creditors
8. The field of accounting which is directly involved in the preparation of financial statements
is:
a. Cost Accounting
b. Managerial Accounting
c. General Accounting
d. Internal Auditing
9. The field of accounting which deals on ensuring adherence to prescribed management

policies is:
a. General Accounting
b. Cost Accounting

c. Managerial Accounting
d. Internal Auditing
10. This accounting organization aims to promulgate and improve the accounting standards
that will constitute GAAP in the Philippines.
a. Philippine Institute of Certified Public Accountants
b. The Professional Regulatory Board of Accountancy
c. Professional Regulation Commission
d. Financial Reporting Standards Council

EXERCISE 3
(MATCHING TYPE)
Date: Score:
Identify what is being referred in each statement given. Refer your answer to the list provided for
and write your answer before each number.
a. Financial Accounting g. Auditing
b. Accounting h. Classifying
c. Budget Accounting i. Basic Accounting
d. Management Accounting j. Recording
e. Financial Accounting k. Management Advisory Services
f. Controller l. Reporting
___________________________1. Sorting and grouping similar items together
___________________________2.It covers the efficient management of cash and other resources by

anticipating or predicting monetary objectives in the future
__________________________3. It includes the design, installation and improvement of the firm’s general
accounting system necessary for controlling
__________________________4. Examination of the accuracy of the accounting records
__________________________5. Provides management of plan for future operations
__________________________6. Focuses on records, business transactions, developed into sets of financial

reports
__________________________7. The highest accounting officer in a company
__________________________8. Branch of accounting that is concerned primarily with the preparation of

general purpose financial statements
__________________________9. What function do accounting journals serve in the accounting process?
__________________________10. The procedural element of accounting

Chapter 1 ACCTG Exercises

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EXERCISE 1

Name: Year and Section:

Write TRUE if the statement is correct or FALSE if it is incorrect.

_________________1. Accounting is an art and a perfect science

_________________3. Employees and investors are external users of financial reports

_________________5. Bookkeeping is synonymous to accounting

_________________6. Auditing is performed before financial accounting starts

_________________7. The American Institute of Certified Public Accountants describes Accounting as an

_________________9. Bookkeeping is the procedural portion of the Accounting Process

_________________10. Accounting identifies, measures and communicates information about economic

_________________11. Auditing is recording, classifying and summarizing of business transactions

_________________12. In classifying phase of accounting, items are sorted and grouped.

_________________13. The Accounting Standards Council sees accounting as a service activity

_________________14. Accounting is broader in scope than Bookkeeping

_________________15. Accounting serves as a means of communication in the business only

ACCTG 101- FINANCIAL ACCOUNTING AND REPORTING (FUNDAMENTALS) 1|Page

Name: Year and Section:

Encircle the letter that corresponds to the best answer

1. The function of Accounting is to provide

c. Quantitative and Qualitative Information

d. Mission and Vision

2. Which of the following is not an appropriate description of Accounting?

a. Accounting is an information system

b. Accounting is an exact science and art

c. Accounting is the language of Business

d. Accounting is a process that leads to understandable information

4. Statement 1: Accounting is useful in making economic decisions

Statement 2: Accounting demands critical thinking and creative skills

a. Only Statement 1 is correct

b. Only Statement 2 is correct

c. Both Statements are correct

ACCTG 101- FINANCIAL ACCOUNTING AND REPORTING (FUNDAMENTALS) 2|Page

5. This work in accounting is performed after the work of accountant is completed

6. Accountants employed by a business firm or a non- government organization are said to be

a. Government and its agencies

9. The field of accounting which deals on ensuring adherence to prescribed management

ACCTG 101- FINANCIAL ACCOUNTING AND REPORTING (FUNDAMENTALS) 3|Page

a. Philippine Institute of Certified Public Accountants

b. The Professional Regulatory Board of Accountancy

c. Professional Regulation Commission

d. Financial Reporting Standards Council

ACCTG 101- FINANCIAL ACCOUNTING AND REPORTING (FUNDAMENTALS) 4|Page

Name: Year and Section:

a. Financial Accounting g. Auditing

c. Budget Accounting i. Basic Accounting

d. Management Accounting j. Recording

e. Financial Accounting k. Management Advisory Services

___________________________1. Sorting and grouping similar items together

___________________________2.It covers the efficient management of cash and other resources by

__________________________4. Examination of the accuracy of the accounting records

__________________________5. Provides management of plan for future operations

__________________________6. Focuses on records, business transactions, developed into sets of financial

__________________________7. The highest accounting officer in a company

__________________________8. Branch of accounting that is concerned primarily with the preparation of

__________________________9. What function do accounting journals serve in the accounting process?

__________________________10. The procedural element of accounting

ACCTG 101- FINANCIAL ACCOUNTING AND REPORTING (FUNDAMENTALS) 5|Page

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