Accounting History, Principles, Laws, and Professional Ethics Lecture

These flashcards review key historical milestones, legal developments, fundamental principles, ethical standards, business structures, and practice areas covered in the lecture notes on accounting.

What is the primary purpose of accounting as a service activity?

To provide quantitative, primarily financial, information about an economic entity that is useful in making economic decisions.

Where were the clay bullae considered the first form of bill of lading discovered?

In modern Iraq.

What did ancient Mesopotamian clay tablets record?

Payment of wages and the costs of labor and materials.

Which ancient legal code required merchants to give buyers a sealed memorandum?

The Code of Hammurabi.

What record-keeping device did the Inca Empire use?

The quipu.

Where was the earliest evidence of business bookkeeping found, according to the notes?

Florence, France.

Which ledgers showed early evidence of double-entry bookkeeping?

The ledgers of Renieri, Fini, and Brothers.

Who kept double-entry records for Gioanni Farolfi and Company?

Amatino Manucci.

Which 1494 book by Luca Pacioli detailed double-entry bookkeeping?

"Summa de Arithmetica, Geometria, Proportioni et Proportionalita."

What was the purpose of the French Code of Savary?

To require an annual fair-value statement of financial position and protect the economy from bankruptcies.

Who first grouped similar transactions separately and posted monthly totals to the journal?

Nicolas Petri.

In which country did the modern accounting profession first form?

Britain.

Which U.S. corporation is noted for publishing early consolidated financial statements?

United States Steel.

What U.S. tax provision allowed companies to deduct depreciation charges?

The corporate income tax law permitting depreciation deductions from taxable income.

Who published "The Model Chart of Accounts"?

Eugen Schmalenbach.

Which Philippine act first recognized Filipino accountants as CPAs (43 were registered)?

Act No. 3105.

Which law replaced the 1923 Philippine Accountancy Act in 1967?

Republic Act No. 5166 (The Accountancy Act of 1967).

Which organization was created in 1973 to issue international accounting standards?

The International Accounting Standards Committee (IASC).

Which presidential decree replaced the 1967 Accountancy Act in the Philippines?

Presidential Decree No. 692 (The Revised Accountancy Law).

What Philippine organization is the accredited professional body representing CPAs?

The Philippine Institute of Certified Public Accountants (PICPA).

What document sets ethical guidelines for professional accountants?

The Code of Ethics for Professional Accountants.

Which body originally set Philippine accounting standards before IASB adoption?

The Accounting Standards Council (ASC).

What agreement committed FASB and IASB to converge U.S. GAAP and IFRS?

The Norwalk Agreement.

Which Philippine law currently governs the practice of accountancy?

Republic Act No. 9298.

Which council replaced the Auditing Standards Practices Council in the Philippines?

The Auditing and Assurance Standards Council (AASC).

Which committee issues Philippine interpretations of accounting standards today?

The Philippine Interpretations Committee (PIC).

What replaced Continuing Professional Education (CPE) requirements in the Philippines?

Continuing Professional Development (CPD).

What ASEAN agreement enables mutual recognition of accountants?

The ASEAN Mutual Recognition Arrangement for Accountancy.

In the operating cycle, what asset is created by the sale of goods or services?

A receivable.

Give two examples of operating costs listed in the notes.

Salaries, rentals, or utilities (any two).

Define a sole proprietorship.

A business with a single owner who receives all profits, bears all losses, and is personally liable for all debts.

How are general partners in a partnership liable for debts?

They have unlimited liability that can extend to personal assets.

What distinguishes a corporation’s legal status and liability?

It is created by law, has rights of succession, and its stockholders are not personally liable for corporate debts.

Which accounting assumption allows an entity’s life to be divided into equal reporting periods?

The time-period (periodicity) assumption.

Which assumption treats the Philippine peso as a stable measuring unit?

The monetary-unit assumption.

What does the going-concern assumption state?

That the entity will continue operating for the foreseeable future.

According to the objectivity principle, on what should accounting records be based?

The most reliable data available.

How should acquired assets be recorded under the historical cost principle?

At their actual original cost.

When is revenue recognized under the revenue recognition principle?

When goods are delivered or services are rendered.

When should expenses be recognized according to the expense recognition (matching) principle?

When the related goods or services are used up, not when paid.

What does the adequate disclosure principle require?

That all relevant information be disclosed in the financial statements.

Which principle focuses only on information significant enough to affect decisions?

The materiality principle.

Why must firms apply accounting methods consistently from period to period?

To achieve comparability within the enterprise.

Under the ethical principle of integrity, how should accountants act?

They should be straightforward and honest in all professional and business relationships.

Which ethical principle requires accountants to maintain knowledge and skill?

Professional competence and due care.

What are the two phases of professional competence?

Attainment (education, training, experience) and maintenance (continuing professional development).

When may an accountant disclose client information under the confidentiality principle?

Only with proper authority or a legal obligation.

Name two sectors, other than public practice, where CPAs may work.

Commerce and industry, government service, or education/academe (any two).

List three specialized fields of accounting mentioned in the notes.

Auditing, taxation, management accounting, financial accounting, cost accounting, government accounting, or financial management (any three).

Which international body replaced the IASC as the main standard-setter?

The International Accounting Standards Board (IASB).

What is the primary purpose of accounting as a service activity?

To provide quantitative, primarily financial, information about an economic entity that is useful in making economic decisions.

Where were the clay bullae considered the first form of bill of lading discovered?

In modern Iraq.

What did ancient Mesopotamian clay tablets record?

Payment of wages and the costs of labor and materials.

Which ancient legal code required merchants to give buyers a sealed memorandum?

The Code of Hammurabi.

What record-keeping device did the Inca Empire use?

The quipu.

Where was the earliest evidence of business bookkeeping found, according to the notes?

Florence, France.

Which ledgers showed early evidence of double-entry bookkeeping?

The ledgers of Renieri, Fini, and Brothers.

Who kept double-entry records for Gioanni Farolfi and Company?

Amatino Manucci.

Which 1494 book by Luca Pacioli detailed double-entry bookkeeping?

"Summa de Arithmetica, Geometria, Proportioni et Proportionalita."

What was the purpose of the French Code of Savary?

To require an annual fair-value statement of financial position and protect the economy from bankruptcies.

Who first grouped similar transactions separately and posted monthly totals to the journal?

Nicolas Petri.

In which country did the modern accounting profession first form?

Britain.

Which U.S. corporation is noted for publishing early consolidated financial statements?

United States Steel.

What U.S. tax provision allowed companies to deduct depreciation charges?

The corporate income tax law permitting depreciation deductions from taxable income.

Who published "The Model Chart of Accounts"?

Eugen Schmalenbach.

Which Philippine act first recognized Filipino accountants as CPAs (43 were registered)?

Act No. 3105.

Which law replaced the 1923 Philippine Accountancy Act in 1967?

Republic Act No. 5166 (The Accountancy Act of 1967).

Which organization was created in 1973 to issue international accounting standards?

The International Accounting Standards Committee (IASC).

Which presidential decree replaced the 1967 Accountancy Act in the Philippines?

Presidential Decree No. 692 (The Revised Accountancy Law).

What Philippine organization is the accredited professional body representing CPAs?

The Philippine Institute of Certified Public Accountants (PICPA).

What document sets ethical guidelines for professional accountants?

The Code of Ethics for Professional Accountants.

Which body originally set Philippine accounting standards before IASB adoption?

The Accounting Standards Council (ASC).

What agreement committed FASB and IASB to converge U.S. GAAP and IFRS?

The Norwalk Agreement.

Which Philippine law currently governs the practice of accountancy?

Republic Act No. 9298.

Which council replaced the Auditing Standards Practices Council in the Philippines?

The Auditing and Assurance Standards Council (AASC).

Which committee issues Philippine interpretations of accounting standards today?

The Philippine Interpretations Committee (PIC).

What replaced Continuing Professional Education (CPE) requirements in the Philippines?

Continuing Professional Development (CPD).

What ASEAN agreement enables mutual recognition of accountants?

The ASEAN Mutual Recognition Arrangement for Accountancy.

In the operating cycle, what asset is created by the sale of goods or services?

A receivable.

Give two examples of operating costs listed in the notes.

Salaries, rentals, or utilities (any two).

Define a sole proprietorship.

A business with a single owner who receives all profits, bears all losses, and is personally liable for all debts.

How are general partners in a partnership liable for debts?

They have unlimited liability that can extend to personal assets.

What distinguishes a corporation’s legal status and liability?

It is created by law, has rights of succession, and its stockholders are not personally liable for corporate debts.

Which accounting assumption allows an entity’s life to be divided into equal reporting periods?

The time-period (periodicity) assumption.

Which assumption treats the Philippine peso as a stable measuring unit?

The monetary-unit assumption.

What does the going-concern assumption state?

That the entity will continue operating for the foreseeable future.

According to the objectivity principle, on what should accounting records be based?

The most reliable data available.

How should acquired assets be recorded under the historical cost principle?

At their actual original cost.

When is revenue recognized under the revenue recognition principle?

When goods are delivered or services are rendered.

When should expenses be recognized according to the expense recognition (matching) principle?

When the related goods or services are used up, not when paid.

What does the adequate disclosure principle require?

That all relevant information be disclosed in the financial statements.

Which principle focuses only on information significant enough to affect decisions?

The materiality principle.

Why must firms apply accounting methods consistently from period to period?

To achieve comparability within the enterprise.

Under the ethical principle of integrity, how should accountants act?

They should be straightforward and honest in all professional and business relationships.

Which ethical principle requires accountants to maintain knowledge and skill?

Professional competence and due care.

What are the two phases of professional competence?

Attainment (education, training, experience) and maintenance (continuing professional development).

When may an accountant disclose client information under the confidentiality principle?

Only with proper authority or a legal obligation.

Name two sectors, other than public practice, where CPAs may work.

Commerce and industry, government service, or education/academe (any two).

List three specialized fields of accounting mentioned in the notes.

Auditing, taxation, management accounting, financial accounting, cost accounting, government accounting, or financial management (any three).

Which international body replaced the IASC as the main standard-setter?

The International Accounting Standards Board (IASB).