Accrual basis of accounting records income when earned regardless of when cash is received.Select one:True The firm can create as many capital accounts as there are owners in a corporation. Select one:True and is a current asset. Select one:True The cash in a financing activity mostly involve current assets or income and expense accounts. Select one:True SFP is an acronym for Statement of Financial Position, which is also known as the Balance Sheet. Select one:True A mortgage payable is a noncurrent liability. Select one:false Land is a current asset. Select one:True Among all the activities, only financing activities have different ways of being presented. Select one:True The transactions falling under operating activities does not primarily involve cash received from customers and paid to suppliers, lenders, or employees. Select one:false The cost accountant handles Management Accounting. Select one:false A liability is a present obligation arising out of past events. Select one:true Increase in assets is recorded as a Debit. Select one:true Financing activities are the common transactions happening in the organization. Select one:false Investing activities cannot be presented in direct or indirect method. Select one:true Cash flows are categorized into three types: operating, investing, and financing activities. Select one:false Accrual basis of accounting is a basic accounting principle that states that income shall only be recognized when cash is received, and expenses shall only be recorded when cash is paid. Select one:false Cash flows are categorized into three types; these activities does not determine the purpose for which the cash has been used. Select one:true The following are cash flow transactions under the direct method except Select one: Cash paid to creditors Current assets are expected to be used after 12 months. Select one:false The owner's equity is also called capital, net assets, or net worth. Select one:true GAAP is Generally Applicable Accounting Principles. Select one:false Services businesses offer products. Select one:false Merchandising business are charging fees for rendered services. Select one:false Cash and cash equivalents are noncurrent assets. Select one:true Liabilities are present obligations arising from past events. Select one:true CPA means Certified Public Accountant. Select one:true Gains increase the income of the business. Select one:true Owner's Equity is to sole proprietorship as Capital is to corporation. Select one:false In cash basis accounting, income shall only be recognized when cash is received, and expenses shall only be recorded when cash is paid. Select one:true Owner's equity represents the right of the owner over the resources of the firm. Select one:true Manufacturing business converts raw materials to finished goods. Select one:true Cash and cash equivalents are current assets. Select one:true The Calendar year ends on January 01. Select one:true The Statement of Financial Position is commonly prepared at the year ended December 31. Select one:false There are common account titles between assets and liabilities. Select one:true A sole proprietor's equity account is written as follows: name of owner, capital. Select one:true Stockholders are the owners of a corporation. Select one:false Revenues are also known as income. Select one:true Cash basis accounting is not acceptable in the accounting industry though we need to understand this in order to prepare our cash flow statement. Select one:true If the firm has been operating in the past year, the beginning capital of the current year is the same as the ending capital of the previous year. Select one:false Net loss indicates that the business is doing well. Select one:false Operating activities may be presented using either the direct method or indirect method. Select one:true Capital is also known as a residual asset. Select one:false The acquisition and disposal of long-term assets, including investments not considered cash equivalents are parts of an investing activities. Select one:true Capital is also known as a residual asset. Select one:false Residual asset is the result of combining liabilities and equity. Select one:false roperty, plant, and equipment are assets. Select one:true If the beginning capital of Mrs. Castro is P200,000 and she made an additional investment during the year of P100,000 with a net profit of P52,000, how much is the ending capital? Select one:P352,000 If additional investment of the owner is P650,000 and payment of long-term loan to the bank is P700,000, how much is the net cash increase or decrease from financing activities? Select one:Decrease of P50,000 Cash basis accounting relies entirely on the payment and receipt of cash. Select one:true Liabilities are company's obligations. Select one:true Beginning inventory is P50,000, net cost of purchases is P125,000, and ending inventory is P35,000. Compute for the cost of goods sold. Select one:P140,000 Withdrawals or drawings are resources of the firm which were taken by the owner for personal use. Select one:true Sole proprietorships mostly managed by their owners. Select one:false Operating expenses and operating income or operating loss are items which can be found in an income statement prepared in a multi-step approach. Select one:false Losses are outflows that result from the main activity of the business. Select one:false Investments made by the owner may represent the original investment made at the start of business, and any additional investments thereafter. Select one:true Account form is more commonly used form of an SFP. Select one:true The following are the advantages of forming a partnership except ~Minimal regulatory requirements than corporation. Select one:Can exist for a period of 50 yrs The following are examples of non-current assets except ~Property, plant and equipment. Select one:Accounts Receivable It is a voluntary association of at least 15 persons having a common bond of interest for the purpose of generating capital from among themselves through a systematic and continuous savings program in order to grant loans to each other at reasonable rates of interest. Select one: partnership Accounting is defined in part as the art of ____________, ___________, and ____________ in a significant manner and in terms of money, transactions and events. Select one:recording, classifying, summarizing The following are cash flow transactions under the direct method except Select one:Cash paid to creditors In the statement of changes in equity of a sole proprietor, this is deducted from the beginning capital to arrive at the ending capital Select one:withdrawal This occurs whenever the enterprise purchased goods or received services on account issuing a promissory note to settle the account in a specified future date. Select one:Notes Payable Branch of accounting solely for government purposes such as collecting of taxes, computing of national income, fixing the gross national product target, ascertaining the balance of payments position, etc.. Select one: Government Accounting Liabilities are present obligations arising from past events.. Select one:true Bank loans are credited to Loans Payable or Mortgage Payable. Select one:true A mortgage payable is a noncurrent liability.. Select one:false Noncurrent assets are assets that are expected to be used within 12 months. Select one:false Report form is where assets are listed on the left side. Select one:false Asset is equal to Liability plus Capital. Liability is equal to Asset minus Capital. Select one:Both statements are true The owner invests trucksto be used in the business. Select one:Asset Increase, Equity Increase A Statement of Financial Position is a formal statement presenting the three accounting elements which are? Select one:assets, liabilities and equity Salaries are considered income to the business. Select one:false A form of business organization which has unlimited liability for any debt of the business which may extend up to the owner's personal properties. Select one:Sole proprietorship Net income is a result of expenses higher than revenues. Select one:false Also known as Time Period Concept Select one:Periodicity AICPA means Select one:American Institute of Certified Public Accountants A business organization where two or more persons join together to contribute money, property or industry for purposes of dividing the profits (or loss) among themselves. Select one:Partnership Which of the following will cause owner's equity to increase? Select one:Revenue All of the following are general and administrative expenses except Select one:Advertising & promotional expenses What is the effect on accounting equation of Triple A when it records the transaction as a debit to Rent Expense for P8,000 and a credit to Accounts Payable for P8,000?Owner's (or Stockholders') Select one:Equity Decrease, Liability Increase When the owner makes withdrawal from the business for personal use, only the asset decreases. Select one:false Entity principle separate business from personal transactions. Select one:true If revenue increases and cost of goods sold remains constant, gross profit also increases. Select one:trueThe financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the __________. Select one:Statement of Financial Position Accounting is the language of business. Select one:true The Statement of Financial Position has two forms. Select one:true Cash, Accounts receivable and Office supplies are examples of current assets. Select one:true Increases in the assets are recorded on the right side of the account. Select one:false Current assets are obligations expected to be settled after a year. Select one:false Income statement covers a period of time. Select one:true Debit entries with a larger number would always possess a debit balance. Select one:true Manufacturing business changes the basic inputs into products that are sold to individual customers. Select one:true Examples of real accounts are revenues, expenses, and drawing accounts. Select one:false Cash, building, and office supplies are examples of assets. Select one:true Wages are considered expenses. Select one:true A promissory note issued by the customer is an evidence of the notes receivable account. Select one:true Assets minus Liabilities is equal to Equity is also considered an Accounting Equation. Select one:true Examples of this type of business are laundry shops, salons, spas, dress shops, barber shops, appliance repair shops, vulcanizing shops, computer/internet shops, printing and photocopying. Select one:Service business A mortgage payable is a noncurrent liability.. Select one:false Withdrawals are also known as "drawings". Select one:true If Revenue is greater expenses, there is a Gain. Select one:false Losses from trading investments of a law firm are not considered expenses. Select one:true Accounting is the system of measuring business activities of financial character. Select one:true Any twelve-month period starting from any month other than 01 January Select one:Fiscal year Capital is another term for equity. Select one:true As compared to the corporation, single proprietorship is easier to form because of its simplicity in operation. Select one:true The following are examples of non-current assets except Select one:Accounts Receivable This principle has two aspects, the quantifiability and stability of peso. Select one:Stable monetary unit Refers to the outflows of resources usually paid in cash or incurred on credit resulting from the main operating activities of the business. Select one:Expenses Capital are claims by creditors against the company's assets. Select one:false Rent Expense, Wages Expense and Utilities Expense are nominal accounts. Select one:true The accounts in the report form of SFP are arranged in a single column wherein assets are listed first, followed by the liabilities and owner's equity.. Select one:true Revenue is synonymous to Gains. Select one:false The business receives cash from a bank loan. Select one:Asset Increase, Equity Increase Ownership of a cooperative is divided into shares of stock. Select one:false What form of the SFP wherein the assets are listed on the left side and the liabilities and equity are on the right side, and the two sides must equal? Select one:Account form Meaning of GAAP Select one:General Accepted Accounting Principles Account form is more commonly used form of an SFP. Select one:true Losses are outflows that result from the main activity of the business. Select one:false Management accounting is also referred to as General Information Financial Accounting. Select one:false Increase in assets is recorded as a Debit.. Select one:true Current assets are presented in the SFP as follows: Select one:Cash, Accounts Receivable, Prepaid expense In this concept, accounts assume that the business will continue operating at a foreseeable future. Select one:going concern concept Long-term debts are noncurrent. Select one:true It is the difference arrived at after deducting withdrawals from the sum of the beginning capital, additional investments, and profit. Select one:ending capital The equation for cost of goods sold is: Select one:Beginning inventory + Net cost of goods purchased - Ending inventory These are reductions in the total sales price given to the customer if the account will be paid within a short period of time. Select one:sales discount The following are parts of the heading of the Statement of Changes in Equity except: Select one:net profit These are resources of the firm which were taken by the owner for personal use. Select one:Withdrawals It represents the residual claim of the owner on the total resources or assets of the firm after deducting the claims of creditors. Select one: Statement of Income Net Profit is derived from: Select one:statement of income An income statement for _________________ could be written using a single-step approach. Select one:service businessIt is the usual account title used for corporations. Select one:Stockholder's Equity How many parts does the Statement of Changes in Equity have? Select one:5 Income statement for merchandising businesses usually have how many sections? Select one:7 These are added to the capital beginning to arrive at the total investments used during the year. Select one:investment The owner's equity is usually consists of ___________________. Select one:Owner's investment and the earned profit less any withdrawals made during a given period. The heading of a statement of income usually consists of the following except: Select one:Both A and B These are deducted in the purchase price either because of returns or reductions due to defects or damages of goods purchased. Select one:Purchase returns and allowances Its use varies depending on the form of business organization. Select one:Equity Accounts It is the total or gross purchases less any purchase discounts and purchase returns and allowances. Select one: Net cost of goods purchased Refers to total or gross sales less any sales discounts, and sales returns and allowances. Select one:net sales It is the difference arrived at after deducting withdrawals from the sum of the beginning capital, additional investments, and profit. Select one:ending capital How many sections do income statement for merchandising businesses usually have? Select one:7 This could be deducted to the beginning capital and additional investments done during the year. Select one:net loss It is the total or gross purchases less any purchase discounts and purchase returns and allowances. Select one: Net cost of goods purchased It represents the total amount of inventory on hand. Select one:Merchandise Inventory These are reductions in the total sales price given to the customer if the account will be paid within a short period of time. Select one:Sales discount The following consists an income statement for merchandising businesses except: Select one: None of the choices Operating expenses and operating income or operating loss are items which can be found in an income statement prepared in a multi-step approach. Select one:true