Fabm Chapter 5: Accounting Concepts And Principles

Front 1

GAAP

Back 1

A widely accepted set of rules, concepts, and principles that govern the application of accounting procedures.

Front 2

What does GAAP stand for?

Back 2

Generally Accepted Accounting Principles

Front 3

What are the accounting standards used in the Philippines?

Back 3

1. PAS

2. PFRS

Front 4

What does PAS stand for?

Back 4

Philippines Accounting Standards

Front 5

What does PFRS stand for?

Back 5

Philippine Financial Reporting Standards

Front 6

What council adopted the GAAP and applied it to the Philippine setting?

Back 6

FRSC

Front 7

What does FRSC stand for?

Back 7

Financial Reporting Standards Council

Front 8

Underlying Accounting Assumptions

Back 8

Important in understanding the manner in which data are processed and presented.

Front 9

What are the five basic assumptions?

Back 9

1. Time-Period

2. Accrual Basis

3. Going Concern

4. Monetary Unit

5. Economic Entity

Hint 9

TAGME

Front 10

Economic Entity Assumption

Back 10

Assumes that all of the business transactions are separate from the business owner's personal transactions.

Front 11

Accrual Basis Assumption

Back 11

Assumes that revenue or expense is recorded in the period it is earned, regardless of the time the cash is received or collected.

Front 12

Accrual Basis Assumption adheres to what principles?

Back 12

1. Revenue Recognition Principle

2. Matching Principle

3. Cost Principle

Front 13

Going Concern Assumption

Back 13

Assumes that a business entity is to remain in existence for an indeterminate amount of time.

Front 14

Monetary Unit Assumption

Back 14

Assumes that only transactions that can be expressed in terms of money are recorded.

Front 15

Where are non-financial information recorded?

Back 15

Memorandum Entries.

Front 16

Time-Period Assumption

Back 16

Assumes that a business completes the whole accounting process over a specific operating time period.

Front 17

What are the two types of Annual accounting periods?

Back 17

1. Calendar Year

2. Fiscal year

Front 18

Calendar Year

Back 18

A calendar year that ends on December 31 and starts on January 1. Else, Fiscal.

Front 19

True or False: The time interval is not needed in the heading of each financial statement.

Back 19

False.

Front 20

Basic Accounting Principles

Back 20

Detailed accounting rules and guidelines that entities must follow in order to enhance reliability, relevance, and consistency of financial information.

Front 21

What are the seven Basic Accounting Principles?

Back 21

1. Cost

2. Conservatism

3. Disclosure

4. Revenue Recognition

5. Objectivity

6. Matching

7. Materiality

Hint 21

CDROM

Front 22

Cost Principle

Back 22

All assets acquired should be valued and recorded based on the actual cash equivalent not the prevailing market/future value.

Front 23

Full Disclosure Principle

Back 23

If certain information is important to an investor or lender using the financial statements, that information should be disclosed within the statement/notes.

Front 24

A company usually lists its ______________________ as the first note to its financial statements.

Back 24

Significant Accounting Policies

Front 25

Matching Principle

Back 25

Requires that expenses be matched with revenues.

Front 26

Revenue Recognition Principle

Back 26

Revenue is recognized as soon as the goods have been sold or a service has been rendered, regardless of when the money is actually received.

Front 27

Materiality Principle

Back 27

Business transactions that may not affect the decision of a stakeholder and is not considered important may not be reported properly.

Front 28

Materiality Threshold

Back 28

10% of Total Asset

Front 29

"This principle allows an accountant to violate another accounting principle if an amount is insignificant."

What principle is the Materiality Principle disregarding?

Back 29

Matching Principle

Front 30

Conservatism Principle

Back 30

If there are two acceptable alternatives for reporting an item, choose the option that has a lower value.

Front 31

Conservatism Principle is also called the ______________

Back 31

Prudence Principle.

Front 32

Objectivity Principle

Back 32

Requires business transactions (bookkeeping and financial recording) to be impartial.

Front 33

Accounting Information can be expected to be ___________

Back 33

1. Consistent and Comparable

2. Relevant and Reliable

Front 34

Accounting Information is useful when it is ______________

Back 34

1. Relevant

2. Reliable

3. Consistent

Front 35

In Accrual basis, revenue is _________

Back 35

Earned.

Front 36

In Accrual basis, an expense is __________

Back 36

Incurred.

Front 37

In the future, revenue is _________

Back 37

Receivable.

Front 38

In the future, an expense is __________

Back 38

Payable.

Front 39

Interim Reports

Back 39

Financial Statements that have time periods of less than a year.