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- 1. Multiple Choice
“GAAP” refers to ______________.
Guidelines for Accountants, Accounting Procedures
General Association of Accounting Practitioners
General Accounting and Auditing Principles
Generally Accepted Accounting Principles
- 2. Multiple Choice
The requirement that only transaction data capable of being expressed in terms of money be included in the accounting records relates to the ____________.
economic entity assumption
monetary unit assumption
cost principle
both b and c
- 3. Multiple Choice
The assumed continuation of a business entity in the absence of evidence to the contrary is an example of the accounting concept of ______________.
going concern
comparability
consistency
accrual
- 4. Multiple Choice
It is assumed that the revenue is recorded in the period it is earned, regardless of the time the cash is received or collected. What assumptions underlie this accounting transaction?
economic entity assumption
accrual basis assumption
going concern assumption
monetary unit assumption
- 5. Multiple Choice
Mr. Alexis Cruz, the owner of Bilis Serbisyo Repair Shop, bought supplies for his son's school project. This is a personal transaction of the owner and should not be recorded in the accounting books of the business. What assumptions underlie this accounting transaction?
economic entity assumption
accrual basis assumption
going concern assumption
monetary unit assumption
- 6. Multiple Choice
GAAP is a widely accepted set of rules, concepts, and principles that govern the application of accounting procedures.
TRUE
FALSE
- 7. Multiple Choice
Accountants must use their judgment to record transactions that require estimation. Conservatism principle should be applied by the accountants in exercising judgment.
TRUE
FALSE
- 8. Multiple Choice
The monetary unit assumption assumes that the monetary unit used in recording business transactions is stable.
TRUE
FALSE
- 9. Multiple Choice
Users of financial reports expect that accounting information is reliable, verifiable, and objective.
TRUE
FALSE
- 10. Multiple Choice
Cost is more definite and determinable than other valuation methods.
TRUE
FALSE
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