UNIT 1
Who is traditionally credited as the "Father of Modern Accounting" for formally describing the double-entry bookkeeping system in his 1494 work Summa de Arithmetica, Geometria, Proportioni et Proportionalita?
A. Adam Smith
B. Luca Pacioli
C. Leonardo da Vinci
D. Lucas Palico
B. Luca Pacioli
The primary objective of Financial Accounting is to provide financial information to which group of users?
A. Internal management and employees
B. Regulatory bodies only
C. External users, such as investors and creditors
D. Cost analysts and budget officers
C. External users, such as investors and creditors
Which form of business organization is characterized by having a single owner who is personally responsible for all the debts and obligations of the business?
A. Corporation
B. Cooperative
C. Partnership
D. Sole Proprietorship
D. Sole Proprietorship
It also known as bookkeeping
A. Posting
B. Journalizing
C. Booking
D. Communicating
B. Journalizing
In ancient Mesopotamia (circa 3000 B.C.), accounting records were primarily kept on:
A. Papyrus scrolls
B. Wooden tally sticks
C. Stone tablets
D. Stone monuments
C. Stone tablets
Which of the following is considered an internal user of accounting information?
A. Government Regulatory Agencies
B. Customers
C. Production Department Heads
D. Potential Investors
C. Production Department Heads
A business that purchases finished goods from manufacturers and resells them to customers without transforming the goods is classified as a:
A. Service business
B. Manufacturing business
C. Merchandising business
D. Hybrid business
C. Merchandising business
Responsible for developing and maintaining accounting records
A. Accountant
B. Supervisor
C. Bookkeeper
D. Owner
C. Bookkeeper
Accounting involves three main processes. Which among these processes is not included?
A. spending
B. identifying and analyzing
C. recording or journalizing
D. communicating
A. spending
An investor is an external user of accounting information. Their primary decision based on financial reports is:
A. Setting the production quota for the next month
B. Deciding whether to buy, hold, or sell the company's stock
C. Negotiating the salary of the company president
D. Calculating the company's annual tax liability
B. Deciding whether to buy, hold, or sell the company's stock
Which form of business organization is best equipped to raise large amounts of capital by selling shares of ownership to the general public?
A. Sole Proprietorship
B. General Partnership
C. Cooperative
D. Corporation
D. Corporation
An accountant cannot proceed with recording without identifying first the relevant financial data. What nature of accounting does this statement manifest?
A. accounting as an information system
B. accounting as an art
C. accounting as a service activity
D. accounting as a process
D. accounting as a process
Who are the primary users of accounting or financial information?
a. internal users
b. external users
c. both
d. none of the above
a. internal users
What type of business activity is characterized by using raw materials, labor, and overhead to produce tangible finished products?
A. Service
B. Trading
C. Financing
D. Manufacturing
D. Manufacturing
Which branch of accounting should you request when you want to investigate if financial statements are reported accurately?
A. tax accounting
B. auditing
C. accounting research
D. accounting education
B. auditing
Which of these users examines accounting information to decide on penalties and surcharges from non-compliance to existing laws and regulations?
a. regulatory bodies
b. public
c. customers
d. investors
a. regulatory bodies
The primary disadvantage for the owner of a Sole Proprietorship is:
A. Difficulty in transferring ownership
B. Unlimited personal liability for business debts
C. Double taxation of profits
D. Subject to excessive regulation
B. Unlimited personal liability for business debts