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Chapter 1
Introduction to Accounting
PROBLEM 1: TRUE OR FALSE
1. TRUE
2. FALSE – only accountable events
3. TRUE
4. TRUE
5. TRUE
6. TRUE
7. TRUE
8. TRUE
9. FALSE
10. TRUE
PROBLEM 2: TRUE OR FALSE
1. FALSE
2. FALSE
3. FALSE – Finance
4. TRUE
5. FALSE
6. TRUE
7. TRUE
8. FALSE – sole proprietorship
9. FALSE – corporation
10. TRUE
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PROBLEM 3: FOR CLASSROOM DISCUSSION
1. D
2. D
3. A
4. C
5. C
6. C
7. C
8. C
9. D
Explanation:
- Choices (a) and (b) are incorrect because these are advantages
of a partnership over a sole proprietorship.
- Choice (c) is incorrect because a partnership has a limited life.
- Choice (d) is correct. The general partners of a partnership are
liable for partnership debts up to their personal assets.
10. D
PROBLEM 4: MULTIPLE CHOICE
1. D
2. A
3. B
4. C
5. D
6. D
7. C
8. A
9. C
10. D
Explanation:
Choices (a) and (b) are incorrect. The incapacitation of the owner
or a co-owner necessarily dissolves a sole proprietorship or a
partnership.
Choice (c) is incorrect. Cooperatives have also some degree of
continuity because the incapacitation of a member does not
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necessarily dissolve a cooperative. However, that degree of
continuity is usually lower than that of a corporation because a
cooperative’s lack of profit motive can adversely affect its growth.
Moreover, a cooperative’s success greatly depends on the
members’ cooperation; failure to sustain that cooperation can
adversely affect the cooperative’s continuity.
PROBLEM 5: MULTIPLE CHOICE
1. A
2. B
3. B
Explanation: General record keeping (i.e., maintaining of journal
and ledger) is within the scope of financial accounting. These
general records provide information needed in the other branches
of accounting.
4.
5.
6.
7.
8.
9.
10.
D
A
A
D
A
D
A
PROBLEM 6: CASE STUDY
The learner’s work is graded based on the teacher’s judgment.
PROBLEM 7: ESSAY
The learner’s work is graded based on the teacher’s judgment.