Division of NORTHERN SAMAR

Gamay 1- District
GAMAY NATIONAL HIGHSCHOOL
SY 2022-202

Subject & Grade Level: FABM 1 Score: _________

Name of Learner:____________________ Section:________

Test 1- Directions: Read carefully each item. Use a separate sheet for your
answers. Write only the letter of the best answer for each test item.

1. It is involved in providing professional services particularly in performing tasks by making

financial reports regarding the financial activities of economic entities. What nature of
accounting is it?
A. An Art and a Science B. A Discipline C. A Language of Business D. A Service Activity
2. What function of accounting is considered to be the basic function of accounting?
A. Identifying, Recording, and Communicating B. Recording, Measuring, and Communicating
C. Measuring, Identifying and Communicating D. Communicating, Identifying and Measuring
3. Luca Pacioli is the father of modern accounting and ____________________.
A. An Accountant B. A Merchant C. A Mathematician D. A Priest
4. Who introduced the use of three books in doing accounting – memorandum where the
transactions are noted; the journal where the debits and credits of transactions are listed; and
the ledger where posting are done.
A. Andrea Barbarigo C. Jacques Savary B. Eugen Schmalenbach D. Luca Pacioli.
5. According to AICPA, Accounting is the art of recording, classifying and summarizing in a significant
manner and in terms of money, transactions and events which are in part at least of financial character
and interpreting the results thereof. In this definition, what is being centered on the long- established
bookkeeping functions of accountants?
A. To classify and summarize business transactions and events and afterward to interpret their outcome.
B. To record and summarize business transactions and events and afterward to interpret their outcome.
C. To record, classify, and summarize business transactions and events and afterward to interpret their
outcome.

D. To record and classify business transactions and events and afterward to interpret their outcome.

6. External financial reports are usually prepared for those who have _______________.

A. Direct access to the management of the business.

B. For the efficient operation and control of the business.

C. No direct access to the management of the business.

D. For the effective operation and control of the business.

7. They use the financial statement of their suppliers to assess the latter’s continuity in business
because some of them are dependent on the existence of their supplier to insure the availability of
supplies that will sustain their business operations.

A. Employees B. Customers D. Investors D. Lenders

8. Statement 1: The T-account or Ledger of our present accounting system has derived its accounting
form from the “Massari Ledgers of commune Genoa. Statement 2: The oldest evidence of records
keeping was the clay tablet of Mesopotamia, 60% of which dealt with commercial transactions, accounts
payable, and receivables.

A. Only statement 1 is correct. B. Only statement 2 is correct.

C. Both statements are correct. D. Both statements are incorrect

. 9. Which of the following external users of accounting information is perceived to be the most
important user in a macro-user oriented accounting system?

A. Creditors B. Government and its agencies

C. Investors D. Employees

10. The statement of financial condition reports the following, except

A. Financial Position B. Liquidity C. Profitability D. Solvency

11. These external users of financial reports primarily use accounting information to assess their return
on investment in the business.

A. Government B. Investors C. Creditors D. Management

12. It refers to the reciprocal value parted with regarding the obligation of the business to hold in trust
the investment of the owner.

A. Capital B. Credit C. Debit D. Liability

13. 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 is correct D. Both statement are incorrect.

14. The following describe the double-entry bookkeeping, except______________

A. based on principle of balance B. value received = value parted with

C. based on dual-aspect concept D. transactions are journalized in two books

15. The following statements describe the nature of accounting, except

A. Accounting is a service activity. B. Accounting is a process, an art, and a discipline.

C. Accounting is a language and the eyes of business. D. Accounting

16. A company requires that expenses must be matched with revenues.

A. Accrual Concern Concept B. Going Concern Concept

C. Materiality Principle D. Matching Principle

17. Aling gempot sold a piece of cupcake to her neighbor. Apparently, her customer is out cash so Aling
gempot had to consider it as credit but still recorded it in her books. What concept of accounting was
observed?

A. Accrual Concern Concept B. Going Concern Concept

C. Materiality Principle D. Matching Principle

18.Gale started a business assuming that it will not enter into a liquidation and the business will run
forever.

A. Accrual Concern Concept B. Going Concern Concept

C. Materiality Principle D. Matching Principle

19. A professional judgement is needed to decide if an amount is insignificant or immaterial.

A. Accrual Concern Concept B. Going Concern Concept

C. Materiality Principle D. Matching Principle

20. An entrepreneur considers the original amount of the item bought regardless of the time of
purchase to be shown in the financial statements.

A. Economic Entity Concept B. Historical Cost Principle

C. Monetary Unit Concept D. Time Period Concept

21. When creating a business, the entity of the owner must be separated from the business. What
concept is being identified in the statement given?
A. Economic Entity Concept B. Historical Cost Principle

C. Monetary Unit Concept D. Time Period Concept

22. A fundamental concept that uses a Philippine peso for economic activities which allows the
accountants to add and subtract peso amounts as though each peso has the same purchasing power as
any other peso at any time.

A. Economic Entity Concept B. Historical Cost Principle

C. Monetary Unit Concept D. Time Period Concept

23. The life of a business may be reported either monthly or yearly depending on the period of the
business.

A. Economic Entity Concept B. Historical Cost Principle

C. Monetary Unit Concept D. Time Period Concept

24. Sufficient information must be disclosed in the financial statements.

A. Full Disclosure B. Monetary Unit Concept C. Objectivity D. Time

25. In order to Bookkeeping must be free of bias and prejudice

A. Full Disclosure B. Monetary Unit Concept C. Objectivity

26. One criteria for general acceptance of an accounting principle that the results in information is
meaningful and useful to those who need to know certain organization.

A. Feasibility B. Relevance C. Objectivity D. All of the above

27. These criteria often conflict with on another, a principle that can be implemented without undue
complexity or cost.

A. Feasibility B. Relevance C. Objectivity D. All of the above

28. It is a widely accepted set of rules, concepts, and principles which governs the application of
accounting principles developed by the accounting professionals to guide the recording and reporting
financial information.

A. Philippine Accounting Standard (PAS) B. Philippine Financial Reporting Standard (PFRS)

C. Generally Accepted Accounting Principles (GAAP) D. Financial Reporting Standards Committee

(FRSC)

29. A principle states that the recording of acquired properties and services should be recorded at their
actual cost and not at what management thinks they are worth as at reporting date.

A. Historical Cost B. Relevance C. Cost Principle D. A and C

30. Which principle/guideline requires the company's financial statements to have footnotes containing
information that is important to users of the financial statements?
 A. Materiality B. Full Disclosure C. Cost Principle D. Objectivity Principle

TEST 11. ENUMERATION:

1. Give the 8 elements of Accounting concept: ( 1-8)
2. What are the 7 basic principles of Accounting (9-15)

GOODLUCK!!!

PREPARED BY:
LILIAN T. MENGULLO
TEACHER