Podcast
Questions and Answers
What is the primary purpose of accounting?
What is the primary purpose of accounting?
Which of the following best defines accountable events in accounting?
Which of the following best defines accountable events in accounting?
Which method of measuring economic transactions is not influenced by estimates?
Which method of measuring economic transactions is not influenced by estimates?
What does the internal event of 'production' refer to in accounting terms?
What does the internal event of 'production' refer to in accounting terms?
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What is a nonreciprocal transfer in accounting?
What is a nonreciprocal transfer in accounting?
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Which of the following measurements is generally affected by estimates?
Which of the following measurements is generally affected by estimates?
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What does the process of communicating in accounting entail?
What does the process of communicating in accounting entail?
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Which of the following is NOT typically recognized in accounting?
Which of the following is NOT typically recognized in accounting?
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What is the primary function of bookkeeping?
What is the primary function of bookkeeping?
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Which sector of accountancy involves working in an educational institution?
Which sector of accountancy involves working in an educational institution?
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Which body is responsible for adopting the Philippine Financial Reporting Standards?
Which body is responsible for adopting the Philippine Financial Reporting Standards?
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What is a consequence of not following uniform reporting standards?
What is a consequence of not following uniform reporting standards?
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What do 'Generally Accepted' standards signify?
What do 'Generally Accepted' standards signify?
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In what order do entities prioritize their accounting policies according to the hierarchy of reporting standards?
In what order do entities prioritize their accounting policies according to the hierarchy of reporting standards?
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What does the preparation of a Trial Balance typically conclude?
What does the preparation of a Trial Balance typically conclude?
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What type of employment is involved in the Practice in Commerce and Industry sector?
What type of employment is involved in the Practice in Commerce and Industry sector?
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What is the primary purpose of accounting?
What is the primary purpose of accounting?
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Which type of accounting information is prepared according to GAAP/PFRS?
Which type of accounting information is prepared according to GAAP/PFRS?
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What does the Double Entry System in accounting entail?
What does the Double Entry System in accounting entail?
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Which accounting concept assumes that an entity will continue to operate indefinitely?
Which accounting concept assumes that an entity will continue to operate indefinitely?
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Qualitative information in accounting is characterized by what?
Qualitative information in accounting is characterized by what?
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Which of the following is NOT considered a type of economic activity in accounting?
Which of the following is NOT considered a type of economic activity in accounting?
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What is the best example of special purpose accounting information?
What is the best example of special purpose accounting information?
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Which accounting concept emphasizes the matching of revenues with their associated costs?
Which accounting concept emphasizes the matching of revenues with their associated costs?
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What is the primary purpose of financial accounting?
What is the primary purpose of financial accounting?
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Which accounting branch focuses primarily on internal users of management?
Which accounting branch focuses primarily on internal users of management?
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What does cost accounting systematically record and analyze?
What does cost accounting systematically record and analyze?
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What is the main focus of government accounting?
What is the main focus of government accounting?
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Which type of accounting is concerned with preparing tax returns?
Which type of accounting is concerned with preparing tax returns?
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What defines fiduciary accounting?
What defines fiduciary accounting?
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What is a key function of social accounting?
What is a key function of social accounting?
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What does accounting research involve?
What does accounting research involve?
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What is the primary objective of the International Accounting Standards Board (IASB)?
What is the primary objective of the International Accounting Standards Board (IASB)?
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When was the International Accounting Standards Board (IASB) established?
When was the International Accounting Standards Board (IASB) established?
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What was the previous name of the IFRS Foundation before July 1, 2010?
What was the previous name of the IFRS Foundation before July 1, 2010?
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Which elements are included under International Financial Reporting Standards (IFRSs)?
Which elements are included under International Financial Reporting Standards (IFRSs)?
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What is the first step in the due process of developing IFRSs?
What is the first step in the due process of developing IFRSs?
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What is NOT a component of the IFRSs development due process?
What is NOT a component of the IFRSs development due process?
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What does the final publication of a standard include?
What does the final publication of a standard include?
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Which organization is responsible for issuing interpretations under IFRSs?
Which organization is responsible for issuing interpretations under IFRSs?
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Study Notes
Bookkeeping and Accounting
- Bookkeeping involves recording transactions and concludes with preparing a Trial Balance.
- Accounting interprets processed information, which is distinct from bookkeeping.
- Accountancy consists of four practice sectors:
- Public Practice: Offers auditing/accounting services to multiple clients.
- Practice in Commerce and Industry: Decision-making roles in the private sector.
- Practice in Academe/Education: Teaching accounting-related subjects.
- Practice in Government: Positions in government or government-owned corporations (GOCC) related to accounting.
Accounting Standards
- Philippine Financial Reporting Standards (PFRS) represent the Generally Accepted Accounting Principles (GAAP) in the Philippines.
- PFRS involves Standards and Interpretations adopted by the Financial Reporting Standards Council (FRSC).
- The components of PFRS include PFRSs, Philippine Accounting Standards (PASs), and Interpretations, supported by application guidance.
- Uniform reporting standards ensure comparability of financial statements, reduce fraudulent reporting, and enhance decision-making.
- "Generally Accepted" standards may be set by authoritative bodies or accepted through practice over time.
- Establishing financial accounting standards requires majority agreement among practicing accountants.
Overview of Accounting
- Accounting is the identification, measurement, and communication of economic information for informed judgments and decisions.
- Serves as the language of business and functions as an information system.
- Involves the significant recording, classifying, and summarizing of financial transactions.
Identifying, Measuring, and Communicating
- Accountable events impact assets, liabilities, equity, income, or expenses, while non-accountable events are disclosed only via memorandum entry.
- Types of events include external (reciprocal transfers like sales, donations) and internal (production losses, unexpected damages).
- Measurement methods entail historical cost, fair value, present value, and various valuation bases, often influenced by estimates.
- Communication involves recording, classifying, summarizing, and interpreting data into useful information, typically through financial statements.
Basic Purpose of Accounting
- Provides relevant information for economic decision-making.
- Economic Entities use accounting for activities such as production, consumption, investments, and more.
Types of Information in Accounting
- Quantitative: Numerical data.
- Qualitative: Descriptive data.
- Financial: Monetary information.
Types of Accounting Information by User Needs
- General Purpose: Meets common needs and adheres to GAAP/PFRS.
- Special Purpose: Meets specific user requirements outside traditional financial accounting.
Accounting Concepts
- Foundation principles of accounting include the Double Entry System, Going Concern Assumption, Materiality, and Accrual Basis.
- Emphasizes consistency, transparency, and proper matching of costs and revenues.
Branches of Accounting
- Financial Accounting: Focuses on general purpose financial statements.
- Management Accounting: Information for internal management use.
- Cost Accounting: Analysis of production-related costs.
- Auditing: Evaluating assertions against established criteria.
- Tax Accounting: Preparation for tax returns and advice.
- Government Accounting: Focus on public funds and accountability.
- Fiduciary Accounting: Management of accounts on behalf of others.
- Estate Accounting: Management of accounts for deceased individuals.
- Social Accounting: Communicating social/environmental impacts.
International Accounting Standards
- International Accounting Standards Board (IASB) creates global standards for accounting.
- Established in 2001, succeeding the International Accounting Standards Committee (IASC).
- IFRS includes standards from both IASB and IASC, alongside interpretations.
Due Process in IFRS Development
- Involves identifying topics, consulting with national standards, public comment on drafts, and rigorous feedback processes.
- Ensures transparency and thoroughness in establishing international accounting standards.
Summary of Other Relevant International Organizations
- Various international organizations contribute to the development and promotion of accounting standards.
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Description
This quiz explores the fundamentals of bookkeeping and accounting, highlighting the key differences between the two processes. It also discusses the various sectors in the practice of accountancy. Test your knowledge of these essential financial concepts!
