ACCTG. 4&5
(Preliminary Examination)
September 2023
I.
Identification.
Direction: Identify what each statement refers to. Write answers on your test booklet.
1.
2.
3.
4.
This referred to conceptual and the why, reason or justification for any action adopted.
It refers to the art of recording.
It refers to the trading business.
This refers to the rules, procedures, practice and standards followed in the preparation and
presentation of financial statements.
5. It refers to the recording business transactions and the eventual preparation of financial
statements.
6. It refers that accounting entity is viewed as continuing in operation indefinitely.
7. What is IFRS stands for.
8. This refers to basis in identifying the proper accounting practices for the preparation and
presentation on financial statements.
9. This refers to the capacity of the information to influence a decision.
10. This refers to the result of adequate disclosure standards or the principle of full disclosure.
II.
TRUE or FALSE. Write True if the statement is correct and False if it is wrong.
1. The information contained in the financial statements must be free from bias.
2. Partnership can be easily dissolved by the withdrawal, retirement death or insanity of one
of the partners.
3. Your say on corporate affairs depends on the number of shares you own.
4. Service business is based primarily on their purchase price.
5. Merchandising business continuously innovative and abreast of changes in technology.
6. Manufacturing business has greater flexibility in managing costs.
7. Corporation is more difficult and more costly to form.
8. A stockholder who is not a member of the corporation’s board of director is relieved from
managerial responsibilities.
9. Partnership is lesser capital compared to corporation.
10. Sole proprietor are personally liable for debts and obligations of the business.
III.
Enumeration. Enumerate the following.
1. Forms of business organization
2. types of business activities
3. advantages of sole proprietorship
4. disadvantage of sole proprietorship
IV.
Essay. Answer the questions briefly. 5 pts. Each.
1. Explain the difference between sole proprietorship and partnership business.
2. Explain difference between service business and merchandising business.