Accountancy Profession

According to the definition of accounting provided by the American Accounting Association, identifying is the first part of the accounting process.

Which of the following is a non-reciprocal transfer?

a. Purchase of equipment on account

b. Donation of asset to a charitable organization

c. Payment of long-term loan with the bank

d. Conversion of raw materials to finished goods

e. Vandalism

b. Donation of asset to a charitable organization

*Purchase of equipment on account and payment of long-term loan are reciprocal transfer.

Vandalism is an external event other than transfer.

According to the IRR of RA 9298, who among the following can teach business law?

I. Certified Public Accountants

II.Members of Integrated Bar of the Philippines

III. Chairperson of CHED

a. I and II

b. II only

c. I only

d. I and III

e. I, II and III

a. I and II

All of the following are events considered as exchange or reciprocal transfer, except

a. purchase of investment in equity securities

b. sale of equipment for non-interest bearing note

c. subscription of the entity's own equity instrument

d. exchange of a note payable for an account payable

e. borrowing of money from a bank

c. subscription of the entity's own equity instrument

*Subscription of the entity’s own equity instrument is considered an external event other than transfer.

As independent or external auditors, CPAs are primarily responsible for

a. filing financial statements with the SEC

b. certifying the accuracy of financial statements

c. preparing financial statements in conformity with GAAP

d. expressing an opinion as to the fairness of financial statements

d. expressing an opinion as to the fairness of financial statements

* Auditing or specifically external auditing is the "examination of financial statements by independent certified public accountant for the purpose of expressing an opinion as to the fairness with which the financial statements are prepared.

Since an auditor cannot provide absolute assurance, it cannot certify the accuracy of the financial statements (see auditing theory discussion on the limitations of audit).

As part of the identifying process, which of the following is external event other than transfer?

(1) Sale of inventories on account

(2) Payment of taxes

(3) Impairment of assets

(4) Inventory obsolescence

a. 1 and 2 only

b. 4 only

c. 3 and 4 only

d. 1 and 3 only

e. 2 and 3 only

c. 3 and 4 only

*Sale of inventories is classified as an exchange transaction involving a reciprocal transfer. Payment of taxes, on the other hand, is a non-reciprocal transfer.

Determine whether the following statements are true or false:

I. The term "recognition" as used in accounting refers to the process of incorporating the effects of an accountable event in the statement of financial position or the statement of profit or loss and other comprehensive income through a journal entry.

II.The accounting process of assigning numbers, commonly in monetary terms, to the economic transactions and events is referred to as classifying.

a. True, False

b. False, True

c. False, False

d. True, True

a. True, False

*Statement II is false because the definition pertains to measuring and not classifying.

In relation to PICPA, the accredited national professional organization of CPAs in the Philippines, which of the below statement(s) is (are) incorrect?

I. There shall only be fifteen (15) national directors to be maintained at all times apportioned according to sectors in the four geographic areas

II. The PICPA shall renew its Certificate of Accreditation once every three years (3) years after the date of the Resolution granting the petition for re-accreditation and the issuance of the said certificate upon submission of the necessary requirements.

a. Statement I only

b. Statement II only

c. Both Statements

d. None from the Statements

a. Statement I only

*Under R.A. 9298, There shall only be fifteen (15) national directors of PICPA, unless there is a valid reason to have additional representation.

In relation to the Professional Regulatory Board of Accountancy, determine which of the following statements is incorrect.

S1: The four sectors in the practice of accountancy shall as much as possible be equitably represented in the Board of Accountancy.

S2: No person shall serve the Board of Accountancy for more than 10 years.

a. S1 only

b. S2 only

c. Both statements

d. None from the statements

b. S2 only

Mr. Maestro Yessur, a topnotch CPA, is a professor in a university where he teaches mainly home economics, music and physical education. Those subjects require that the teacher must be awesome. Mr. Maestro is also frequently invited as a judge in beauty pageants and singing contests and as a referee in mixed martial arts competitions. Mr. Maestro is considered to be practicing accountancy in which of the following sectors?

a. Academe

b. Public accounting

c. Commerce and industry

d. None of these

d. None of these

*Mr. Maestro is not in the practice of academe or education since he is not handling any subject related to accounting and finance. Thus, Mr. Maestro Yessur is not practicing the accountancy profession.

S1: The members of the Board shall choose a chairperson from among themselves

S2: The body mandated by law to promulgate rules and regulations affecting the practice of accountancy is Professional Regulation Commission

a. False, true

b. True, false

c. True, true

d. False, false

d. False, false

*The chairperson is appointed by the President of the Republic of the Philippines. The members can also choose among themselves a vice chairman.

The body mandated by law to promulgate rules of R.A. 9298 is the Professional Regulatory Board of Accountancy.

The Board of Accountancy (BOA) shall be composed of a

a. Six (6) members with a chairman for a total of six (6) individuals

b. Chairman and six (6) members for a total of seven (7) individuals

c. Chairman and fifteen (15) members

d. Chairman and seventeen (17) members

b. Chairman and six (6) members for a total of seven (7) individuals

The following are regarded by RA 9298 as CPA services in public practice if offered or rendered on a fee basis and to more than one client:

I. Preparation and signing of audit reports

II. Professional assistance on accounting procedures

III. Representation of clients before governmental agencies on tax and other matters regardless to its relation to accounting

a. Yes, yes, yes

b. Yes, no, yes

c. Yes, no, no

d. Yes, yes, no

d. Yes, yes, no

The following statements are provided for your evaluation:

S1: Under the identifying process of accounting, only accountable events are recognized. Non-accountable events are always disclosed in the notes to financial statements.

S2: The measuring process is the analytical component of the accounting process.

a. True, False

b. False, True

c. False, False

d. True, True

c. False, False

*The first statement is incorrect because non-accountable events are disclosed only if they relevant to user’s decision making.

The second statement is also incorrect because measuring is the technical component of the accounting process.

The following statements relate to the Professional Regulatory Board of Accountancy. Determine which of the following statements is incorrect?

Statement 1: The Chairman and member of the Board of Accountancy shall be appointed by the Commission upon the recommendation of the board in coordination with the APO.

Statement 2: In order to be a chairman or member of the Board of Accountancy, the person should be a duly registered Certified Public Accountant with at least ten (10) years of work experience in the public practice of the accountancy profession.

a. Only Statement 1

b. Only Statement 2

c. Both Statements

d. None from the Statements

c. Both Statements

The practice of accountancy here in the Philippines is regulated by

a. R.A. 9892, The Philippine Accountancy Act of 2004

b. R.A. 9298, The Philippine Accountancy Act of 2004

c. R.A. 9298, The Law of Accountancy Profession of 2004

d. R.A. 9892, The Law of Accountancy Profession of 2004

b. R.A. 9298, The Philippine Accountancy Act of 2004

The term of the vice-chairman of the Board of Accountancy is good for ______.

a. One year

b. Two years

c. Three years

d. Six months

a. One year

Under R.A. 9298, a person is deemed to be in the practice of the accounting profession in commerce and industry when he/she:

a. holds or is appointed in an accounting professional group in government or in a government owned and/or controlled corporation including those performing proprietary functions, where decision making requires professional knowledge in the science of accounting.

b. involved in decision making requiring professional knowledge in the science of accounting as well as the accounting aspects of finance and taxation or is employed in a position that requires CPA.

c. in an education institution which involve teaching of accounting, auditing, management advisory services, accounting aspect of finance business law, taxation, and other technically related subjects.

d. is holding out himself/herself as one skilled in the knowledge, science, and practice of accounting, and as a qualified person to render professional services as a certified accountant.

b. involved in decision making requiring professional knowledge in the science of accounting as well as the accounting aspects of finance and taxation or is employed in a position that requires CPA.

Which of the following is an internal event recorded on the books of an entity?

a. Donation

b. Fair Value changes of assets

c. Casualty

d. Provision of capital by investors

c. Casualty

*Donation, fair value changes and provision of capital are external events.

Which of the following is NOT a characteristic of accounting?

a. Accounting focuses on quantitative information

b. Accounting addresses the needs of the users in terms of their decision making

c. Accounting measures changes in entity's economic resources in terms of money and sociological impact

d. The results of the accounting process is subject to user's interpretation

c. Accounting measures changes in entity's economic resources in terms of money and sociological impact

*One of the basic features of financial accounting is the direct measurement of economic resources and obligations and changes in them in terms of money ONLY.

Which of the following is not a function of the Board of Accountancy?

a. To supervise the registration, licensure, and practice of accountancy in the Philippines

b. To issue, suspend, revoke, or reinstate the certificate of registration for the practice of the accountancy profession

c. To prescribe and/or adopt a code of ethics for the practice of accountancy

d. To adopt an official seal of the Commission

d. To adopt an official seal of the Commission

*The correct function is “To adopt an official seal of the Board”.

Which of the following is not a qualification for the Accredited Professional Organization (APO) of CPAs in the Philippines to renew its accreditation?

I. It shall have credible plan to enlist into active membership majority of CPAs in public practice

II. Its executive director work as full-time director

III. It is a duly registered stock corporation by SEC.

a. I and II

b. II and III

c. I, II and III

d. I and III

e. Answer not given

d. I and III

*For Statement I, the correct qualification should be “ It shall have a creditable plan to enlist into active membership within three (3) years, at least a majority of the CPAs in the practice of accountancy” and not just CPAs in public practice.

For Statement III, the correct qualification should be “ It is duly registered as a non-stock corporation or association by the SEC”.

Which of the following is not a qualification of a member of the Board of Accountancy?

a. He must a natural-born citizen and a citizen of the Philippines

b. He must be of good moral character and must not have been convicted of crimes involving moral turpitude

c. He must be a duly registered certified public accountant with at least 10 years of experience in public accounting

d. He must not be a director or officer of the APO of CPAs at the time of his appointment

c. He must be a duly registered certified public accountant with at least 10 years of experience in public accounting

Which of the following is NOT part of the conditions for the continuity of accreditation of PICPA?

I. It is duly registered as a stock corporation or association by the Securities and Exchange Commission (SEC).

II. It shall have a full-time career Executive Directors who shall implement the policies promulgated by the PICPA Board of Directors and shall have direct supervision over the PICPA Secretariat

III.Its membership is open to all registered CPAs but particularly caters practitioners in public practice

a. I and II

b. II and III

c. I and III

d. I, II and III

c. I and III

*PICPA is registered with SEC as a non-stock corporation. PICPA’s membership shall include CPAs in all sectors and does not specifically cater any sector of the accountancy profession.

Which of the following is not within the powers and functions of the Board of Accountancy in accordance with R.A. 9298?

a. To prescribe and/or adopt a Code of Ethics for the practice of accountancy

b. To adopt an official seal of the Republic of the Philippines

c. To administer oaths in connection with the administration of R.A. 9298

d. To supervise the registration, licensure, and practice of accountancy in the Philippines

b. To adopt an official seal of the Republic of the Philippines

Which of the following is qualified to be a member or chairman of Professional Regulatory Board of Accountancy?

I. A person convicted of political crimes

II. A person serving as a partner on one of the biggest firms in the Philippines

III. A person who is a former director of PICPA

a. I only

b. II only

c. III only

d. I, II and III

d. I, II and III

*For Statement I, the person should be convicted of crimes involving moral turpitude in order to be disqualified from being a member or chairman of the Board of Accountancy.

For Statement II, ownership on any accounting or auditing firm in the Philippines does not preclude a person from being a member or chairman of the Board of Accountancy.

For Statement III, the person should be a PICPA director at the time of appointment to be excluded from being a member or chairman of the Board of Accountancy.

Which of the following is the definition of accounting provided by the Accounting Standards Council (ASC)?

a. Accounting is a service activity that provides quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision.

b. 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 a financial character and interpreting the results thereof.

c. Accounting is the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of information.

d. Accounting is the systematic evaluation of the fairness on the entity's financial statements, the report of which is to be used by third parties.

a. Accounting is a service activity that provides quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision.

Which of the following statements is incorrect regarding the Professional Regulatory Board of Accountancy?

S1: The Chairman and member of the Board shall hold office for a term of three (3) years. No person who has served two successive complete terms as chairman or member shall be eligible for reappointment as chairman or member until the lapse of three (3) years.

S2: The Professional Regulations Commission doesn’t have the power the remove any member of Board of Accountancy.

a. S1 only

b. S2 only

c. Both Statements

d. None from the statements

a. S1 only

Which of the following statements is true?

I. Loss from theft should be classified as a nonreciprocal transfer

II. Internal events are changes in economic resources by actions of other entities that do not involve transfers of enterprise resources and obligations

III. Nonreciprocal transfers involve the transfer of resources in only one direction, either from an entity to other entities or from other entities to the entity.

IV. Internal events are sudden, substantial, unanticipated reductions in enterprise resources not caused by other entities

V. Fire, earthquake and flood are examples of accountable events classified as internal events.

a. I, II, III, V

b. I, III, V

c. II, III, IV, V

d. I, III, IV, V

b. I, III, V

*Statement II is incorrect since the definition provided pertains to external events other than transfer.

Statement IV is incorrect since it is the definition of casualty. Casualty is just a type of internal event.

Who appoints the chairman and the members of the Professional Regulatory Board of Accountancy?

a. The chairperson of the Professional Regulations Commission

b. The President of the Republic of the Philippines

c. The Senate President of the Republic of the Philippines

d. The President of the Philippine Institute of Certified Public Accountants

b. The President of the Republic of the Philippines

*Under Section 5 of RA 9298, the chairman and six (6) members of the Board of Accountancy are to be appointed by the President of the Philippines.

Accounting has been given various definitions, which of the following is not one of those definitions?

A. Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

B. 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 of at least, of a financial character and interpreting the results thereof.

C. Accounting is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.

D. Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of information.

C. Accounting is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users.

=> Definition of Auditing

Consider the following statements:

S1: Identifying is the process of analyzing events and transactions to determine whether or not they will be recognized. Only accountable events are recognized.

S2: All transfers (whether reciprocal or non-reciprocal) are external events but not all external events are transfers.

S3: Measuring, a formal component of the accounting process, is the process of assigning peso amounts to the accountable events.

A. True, false, false

B. False, true, true

C. True, true, false

D. False, false, true

E. True, true, true

C. True, true, false

=> S1 and S2 is correct; S3: Measuring is a technical component

What is the overall objective of accounting?

A. To measure the periodic income of the economic entity.

B. To provide information that the creditors can use in deciding whether to grant loans to an entity.

C. To provide the information that the managers of an economic entity need to control the operations.

D. To provide quantitative financial information about an entity that is useful in making economic decision

D. To provide quantitative financial information about an entity that is useful in making economic decision

Which of the following is considered to be an external event other than transfers?

I. Theft III. Change in market value of assets

II. Vandalism

A. I and II

B. II and III

C. I and III

D. I, II and III

E. Answer not given

B. II and III

=> Theft is a non-reciprocal transfer

One of the basic features of financial accounting is

A. Direct measurement of economic resources and obligations and changes in them in terms of money.

B. Direct measurement of economic resources and obligations and changes in them in terms of money and sociological impact.

C. Direct measurement of economic resources and obligations and changes in them in terms of money and psychological impact.

D. Direct measurement of economic resources and obligations and changes in them in terms of money and sociological and psychological impact.

A. Direct measurement of economic resources and obligations and changes in them in terms of money.

Which of the following statements in relation to the Board of Accountancy and its composition is (are) incorrect?

I. The Board shall be composed of a chairman and six (6) member to be appointed by the Chairman of the Professional Regulations Commission.

II. The Board shall elect a chairman from, among its members to serve for a term of one year.

III. The Board consists of a Chairman and six members with a term of 3 years, renewable.

A. I and II

B. II and III

C. I and III

D. II only

E. I only

A. I and II

=> I.: appointed only by the President of the Philippines

=> II.: vice chairman not chairman

The Professional Regulatory Board of Accountancy shall be composed of a chairman and six (6) members to be appointed by the <LIST A> from a list of three (3) recommendees for each position and ranked by the <LIST B>, from a list of five (5) nominees for each position submitted by <LIST C>.

LIST A LIST B LIST C

A. Commission PICPA President of the Phil.

B. President of the Phil. PICPA Commission

C. Commission Commission PICPA

D. President of the Phil. Commission PICPA

D. President of the Phil. Commission PICPA

If the PICPA fails to submit to the PRC its own nominees within 60 days prior to the expiry of the term of an incumbent

chairman or member of the Board of Accountancy (BOA), the PRC in consultation with the BOA shall submit to the

President a list of how many nominees for each vacant position?

A. 2 C. 4

B. 3 D. 5

B. 3

Which of the following is not a qualification of a member of the Board of Accountancy?

A. He must be a natural-born citizen and a resident of the Philippines.

B. He must not be a director or officer of the Accredited National Professional Organization of CPAs at the time of his appointment.

C. He must be of good moral character and must not have been convicted of crimes involving moral turpitude.

D. He must be a duly registered certified public accountant with at least ten years of experience in public accounting.

D. He must be a duly registered certified public accountant with at least ten years of experience in public accounting.

=> in any scope of practice of accountancy

In relation to the qualification of a member or chairman of Board of Accountancy, which of the following is incorrect?

I. Must be a naturalized citizen and a resident of the Philippines

II. Must be a duly registered Certified Public Accountant with at least three (3) years of meaningful experience in any scope of practice of accountancy.

III. If the Chairman or any member of the Board is still in active practice of public accountancy or connected with any office in commerce and industry or in the government, he/she must go on leave during the pendency of any case involving himself/herself, his firm, partnership, company or government office, or inhibit himself/herself completely in all the stages of the proceedings thereof

A. I and II D. II only

B. II and III E. I only

C. I and III

A. I and II

=> I.: natural-born citizen

=> II.: at least 10 years of experience

The following statements relate to the term of office of the chairman and members of the Board of Accountancy.

Which of them is incorrect?

A. The chairman and members of the Board of Accountancy shall hold office for a term of three years.

B. Any vacancy occurring within the term of a member shall be filled up for the unexpired portion of the term only.

C. Appointment to fill up an expired term is not to be considered as a complete term.

D. The Board of Accountancy member who has served two successive complete terms as chairman or member shall be eligible for reappointment until the lapse of three years.

D. The Board of Accountancy member who has served two successive complete terms as chairman or member shall be eligible for reappointment until the lapse of three years.

=> lapse of one year

No person shall serve the Professional Regulatory Board of Accountancy for more than

A. 3 years C. 9 years

B. 6 years D. 12 years

D. 12 years

Which of the following is not within the function and powers of Board of Accountancy?

A. To investigate violations of RA 9298 and the rule regulations promulgated hereunder and for his purpose, to issue summons, subpoena and subpoena ad testificandum and subpoena daces tecum to violators or witness thereof and compel their attendance to such investigation or hearings and the production of documents in connection therewith.

B. To issue, suspend , revoke, or reinstate the Certificate of Registration for the practice of the accountancy profession

C. To administer oaths in connection with the administration of this Act.

D. To adopt an official seal of the Commission.

D. To adopt an official seal of the Commission.

=> Board not Commission

Which of the following is not a function of Professional Regulatory Board of Accountancy?

I. To issue, suspend, revoke, or reinstate the Certificate of Registration for the practice of the accountancy profession;

II. To suspend or remove any member of the board.

III. To establish teaching standards, including the qualifications of members of the faculty of schools and colleges of accountancy

A. I and II D. I only

B. II and III E. II only

C. I and III

B. II and III

=> II.: President of the Philippines only

=> III.: CHED

Who has the power to suspend or remove any member of the Board of Accountancy?

A. The Chairman of the FRSC C. The Chairman of the AASC

B. The Chairman of the PRC D. The President of the Philippines

D. The President of the Philippines

Which of the following is not a ground for suspension or removal of members of BOA?

A. Neglect of duty or incompetence

B. Intolerance of any violation of RA 9298

C. Final judgment of crimes, involving moral turpitudes

D. Rigging of the certified public accountants’ licensure examination results.

B. Intolerance of any violation of RA 9298

S1: The law regulating the practice of accountancy in the Philippines is RA 9289 or the Philippine Accountancy Act of 2004.

S2: A corporation can be registered for the purpose of practicing public accounting profession in the Philippines

S3: Continuing Professional Education is required for both renewal of CPA license and accreditation to practice the accountancy profession

A. True, true, false D. False, false, false

B. False, false, true E. True, false, true

C. True, false, false

B. False, false, true

Determine whether the following statements are true or false:

I. Independent external auditors perform attest function.

II. If a CPA wants to practice public accountancy, one must obtain first certificate of recognition from the board of accountancy.

A. True, false C. False, false

B. False, true D. True, true

A. True, false

The following is deemed a practice of accountancy, except:

A. Appointment to a position in the government that requires a CPA license as a prerequisite.

B. Employment as budget officer in a local government unit regardless of the officer being a holder of a CPA license or not.

C. Teaching professional subjects in a collegiate program leading to the degree of Bachelor of Science in Accountancy.

D. Representing his clients before government agencies on tax and other matters related to accounting.

B. Employment as budget officer in a local government unit regardless of the officer being a holder of a CPA license or not.

Which of the following organization has been recognized by the Commission on October 2, 1975 per Accreditation No.15, as Accredited Professional Organization?

A. Board of Accountancy (BOA)

B. Philippine Institute of CPAs (PICPA)

C. Association of CPA's in Public Practice (ACPAPP)

D. Association of CPAs in Education (ACPAE)

B. Philippine Institute of CPAs (PICPA)

Which of the following is part of the conditions for the continuity of accreditation of PICPA?

I. Its membership shall include CPAs in all sectors namely, public practice, commerce and industry, academe/education and government

II. It shall have a creditable plan to enlist into active membership all of the CPAs in the practice of accountancy

III. It shall be judicious and prudent in the management of its financial resource

A. I and II C. I and III

B. II and III D. I, II and III

C. I and III

=> II.: should be majority not all

Unless there is a valid reason to have additional representation, the PICPA shall have how many national directors?

A. 12 C. 15

B. 14 D. 20

C. 15

Which of the following statements is (are) incorrect regarding PICPA?

I. The fifteen (15) national directors shall be apportioned according to sectors in the three geographic areas (Luzon, Visayas and Mindanao) based on the ratio of latest available number of members in good standing from those areas;

II. Membership in PICPA shall be a bar to membership in any other association of certified public accountants.

III. PICPA is registered with the Security and Exchange Commission as a profit-oriented corporation and recognized by the Board, subject to the approval by the Commission

A. I only D. II and III

B. II only E. I, II and III

C. III only

E. I, II and III

=> I.: 4 geographic areas including NCR

=> II.: meaning of bar is not allowed; it should be allowed

=> III.: PICPA is a non-stock corporation

What is the law regulating the practice of accountancy in the Philippines?

a. R.A. No.9298

b. R.A. No.9198

c. R.A. No. 9928

d. R.A. No. 9892

a. R.A. No.9298

It is the body authorized by law to promulgate rules and regulations affecting the practice of the accountancy profession in the Philippines.

a. Board of Accountancy

b. Philippine Institute of Certified Public Accountants

c. Securities and Exchange Commission

d. Financial Reporting Standards Council

a. Board of Accountancy

The Continuing Professional Development is required for

a. Renewal of CPA license

b. Accreditation to practice the accountancy profession.

c. Both renewal of CPA license and accreditation to practice the accountancy profession.

d. Neither renewal of CPA license nor accreditation to practice the accountancy profession.

c. Both renewal of CPA license and accreditation to practice the accountancy profession.

Certified Public Accountants are licensed by

a. PICPA

b. The Securities and Exchange Commission

c. The Financial Executives Institute of the Philippines

d. The state government

d. The state government

Which statement is incorrect in relation to the practice of public accounting?

a. Single practitioners for the practice of public accounting shall be registered CPAs in the Philippines.

b. Partners of partnership formed for the practice of public accounting shall be registered CPAs in the Philippines.

c. The SEC can register any corporation organized for the practice of public accounting.

d. A certificate of accreditation shall be issued to CPAs who have acquired at least 3 years of public practice.

c. The SEC can register any corporation organized for the practice of public accounting.

Which of the following correctly describes accounting?

A. The function of accounting is to provide quantitative information about economic entities that is intended to be useful in making economic decisions.

B. Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information.

C. Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are of financial character and interpreting the results thereof.

D. All of these correctly describe accounting.

D. All of these correctly describe accounting.

=> A. ASC

=> B. AAA

=> C. AICPA

Statement 1: Accounting is the major facet of a business responsible for generating funds needed to support the operations.

Statement 2: The main purpose of accounting is to provide information that is useful in making economic decisions.

A. Both statements are true.

B. Both statements are false.

C. Only the first statement is true.

D. Only the second statement is true.

D. Only the second statement is true

=> Statement 1 is false because it is the function of finance that is responsible for generating forms needed to support the operations of an organization.

This process involves the recognition or non-recognition of business activities or transactions as accountable events.

A. Identifying.

B. Measuring.

C. Recording.

D. Classifying.

A. Identifying

Which of the following are considered as accountable events?

I. Payment of employee salaries and wages.

II. Death of company CEO.

III. A company signed an agreement to provide services to a client for 3 years.

IV. Sale of company products to a customer.

A. I and III.

B. I and IV.

C. II and III.

D. III and IV.

E. I, III, and. IV.

B. I and IV

=> An Event is accountable only if it has an effect on the elements of FS

=> Items I and IV involve cash flows; Therefore, they are considered accountable events

This process involves assigning'amounts to accountable economic events and transactions.

A. Identifying.

B. Measuring.

C. Assigning.

D. Recording.

B. Measuring

What is the correct order of the phases of accounting?

A. Recording → Classifying → Summarizing → Interpreting.

B. Recording → Summarizing → Classifying → Interpreting.

C. Interpreting → Recording → Classifying → Summarizing.

D. Interpreting → Recording → Summarizing→ Classifying.

A. Recording → Classifying → Summarizing → Interpreting.

Which phase of accounting is known as the bookkeeping phase?

A. Recording.

B. Classifying.

C. Summarizing.

D. Interpreting.

A. Recording

International Financial Reporting Standards (IFRSs) are issued by the:

A. Accounting Standards Board (IASB).

B. International Accounting Standards Committee (IASC).

C. Financial Reporting Standards Board (FASB).

D. Financial Reporting Standards Council (FASC).

A. Accounting Standards Board (IASB).

The accounting standards issued by the International Accounting Standards Committee (IASC) are called:

A. International Financial Reporting Standards (IFRS)

B. International Accounting Standards (IAS)

C. Philippine Financial Reporting Standards (PFRS)

D. Philippine Accounting Standards (PAS)

B. International Accounting Standards (IAS)

Which of the following statements are correct about the IASB and IASC?

I. The IASB was formed to replace the IASC.

II. The IASC was formed to replace the IASB.

III. The accounting standards issued by the IASB were adopted by the IASC.

IV. The accounting standards issued by the IASC were adopted by the IASB.

A. Statements I and III

B. Statements I and IV

C. Statements II and III

D. Statements II and IV

B. Statements I and IV

=> IASC is the predecessor of the IASB. All the accounting standards issued by IASC were adopted by the IASB

What is the proper order in the development of,an IFRS?

I. Exposure draft

II. Accounting standard

III. Discussion paper

A. I, II, III

B. I, Ⅲ, II

C. III, I, II

D. III, II, I

C. III, I, II

The committee that develops authoritative interpretations of existing IAS and IFRS and provides guidance on financial reporting issues not specifically addressed by IAS and IFRS is the:

A. Standards Interpretations Committee (SIC)

B. International Financial Reporting Standards Interpretations Committee (IFRSIC)

C. Philippine Interpretations Committee (PIC)

D. Financial Reporting Standards Committee (FRSC)

B. International Financial Reporting Standards Interpretations Committee (IFRSIC)

Which of the following statements is incorrect about the IFRSIC (or IFRIC)?

A. IFRSIC is the current interpretative body of the IASB.

B. SIC was reconstituted as IFRIC.

C. The interpretations issued by IFRIC become part of IFRS once they are approved by the IASB.

D. All these statements are correct about the IFRSIC (or IFRIC).

D. All these statements are correct about the IFRSIC (or IFRIC).

The current accounting standard-setting body in the Philippines is the:

A. International Accounting Standards Board.

B. Accounting Standards Council.

C. Financial Reporting Standards Board.

D. Financial Reporting Standards Council

D. Financial Reporting Standards Council

=> FRSC is the Philippine accounting standard-setting body, while IASB is the international accounting standard-setting body.

The Philippine accounting standard-setting body was established by the

A. Board of Accountancy (BOA).

B. Professional Regulation Commission (PRC).

C. International Accounting Standards Board (IASB)

D. President of the Philippines.

B. Professional Regulation Commission (PRC).

Which of the following is correct about Financial Reporting Standards Council (FRSC)?

A. The FRSC replaces the Accounting Standards Council (ASC).

B. The FRSC's main function is to establish generally accepted accounting principles in the Philippines.

C. The FRSC was established to assist the Board of Accountancy in carrying out its power and function in promulgating accounting standards in the Philippines.

D. All of these are correct about the FRSC.

D. All of these are correct about the FRSC.

Which of the following statements is/are true about the accounting standards issued by the Financial Reporting-Standards Council (FRSC)?

A. The accounting standards issued by the FRSC are called Philippine Accounting Standards (PAS) and Philippine Financial Reporting Standards (PFRS).

B. The accounting standards issued by the FRSC constitute the highest hierarchy of GAAP in the Philippines.

C. The accounting standards issued by the FRSC are based on the accounting standards issued by the International Accounting Standards Board (IASB).

D. All of these are true about the accounting standards issued by the Financial Reporting Standards Council (FRSC).

D. All of these are true about the accounting standards issued by the Financial Reporting Standards Council (FRSC).

Philippine Interpretations Committee (PIC) was established by the:

A. Financial Reporting Standards Council (FRSC).

B. Professional Regulation Commission (PRC).

C. Board of Accountancy (BOA).

D. International Accounting Standards Board (IASB).

A. Financial Reporting Standards Council (FRSC).

Which of the following is correct about the Philippine Interpretations Committee (PIC)?

A. The PIC was established to develop authoritative interpretations of existing PAS and PFRS and provide guidance on financial reporting issues not specifically addressed in PAS and PFRS.

B. A PIC Interpretation becomes part of PFRS once they are approved by the FRSC.

C. IFRIC and SIC are the international counterparts of PIC.

D. All of these are correct about the PIC.

D. All of these are correct about the PIC.

The PFRSs include which of the following?

A. Philippine Accounting Standards.

B. Philippine Financial Reporting Standards.

C. Philippine Interpretations Committee Interpretations.

D. All of these are included in PFRSs.

D. All of these are included in PFRSs

The body authorized by law to promulgate rules and regulations affecting the practice of accountancy in the Philippines is the:

A. Financial Reporting Standards Council.

B. Professional Regulation Commission.

C. Board of Accountancy.

D. Philippine Institute of Certified Public Accountants.

C. Board of Accountancy.

The primary service offered by CPAs in public practice is:

A. Professional consultancy services.

B. Auditing services.

C. Taxation services.

D. Government accounting services.

B. Auditing services.

Alexandria, a CPA, is employed in BCV Enterprises as the company's chief accountant. In this case, Alexandria is practicing her profession under what scope?

A. Public accountancy.

B. Commerce and industry.

C. Academe.

D. Government.

B. Commerce and industry.