Reviewer-for-accouting-chapter-1-and-2.docx

(Reviewer/Retention Paper) Property of :

Course/Institute :

Chapter I: The Environment of Financial Accounting and Reporting… IDENTIFICATION:

_______________1. (________) is an Information System, that is designed to identify, collect, measure, and communicate economic information about a business entity (Firm) to those having interest in the financial affairs of the entity. _______________2. The process of developing general-purpose financial statements and reporting general-purpose accounting information to various external users is called (_______). _______________3. Accountants are (_______) that uses (_______) to communicate and interpret their work to internal and external users. _______________4. External financial reporting is governed by an (______________) that are designed to carefully define what information a firm must disclose to outsiders. _______________5. Financial Statements are most commonly prepared in accordance with an accounting model based on (_____________) and the (______________) concept. _______________6. (___________) include present and potential stockholders, investors, creditors, suppliers, customers, legislators, trade associations and others, who lack direct access to the information generated by the internal operations of the business and must rely on generalpurpose financial statements to make their investment, credit and public policy decisions. _______________7. The (________) are concerned with the risk inherit in, and the return provided by their own investments. They also need information to help them control the business and make investment decisions. _______________8. The (__________) are interested in the information that enables them to determine whether their loans, and the interest attaching to them will be paid when due. _______________9. The (_________) are interested in the information about the stability and profitability of their employers and the ability of the enterprise to provide renumeration, retirement benefits and employment opportunities. _______________10. The (___________) are interested about the allocation of resources and, therefore, the activities of enterprises. And also they require information in order to regulate the activities, determine taxation policies and as the basis for national income and similar statistics. _______________11. The (___________) have an interest in information about the continuance of an enterprise, especially when they have a long-term involvement with, or are dependent on, the enterprise.

(Reviewer/Retention Paper) _______________12. (___________) are the managers of a business entity, responsible for managing efficiently and effectively, and who have the power and authority to obtain whatever economic information that they need.

_______________13. Users expect that financial statements to be presented (_____), (_____), and (_____) the company’s financial operations.

_______________14. (___________) helps accountants meet the information demands of users by providing guidelines and limits for financial reporting.

_______________15. The (______________) was formed in 1973 to develop worldwide accounting standards to harmonize conflicting national standards.

_______________16. In 1981, the (_______________) created the (_____________) to formalize the accounting standard-setting function in the Philippines. Its main function was to establish and improve accounting standards that would be generally accepted in the Philippines.

_______________17. The (____________) has the legal authority to prescribe accounting principles and practices usually for all companies issuing publicly traded securities.

_______________18. The (____________) administers the provisions of the Internal Revenue Code. However, they do at times influence the choice of accounting methods and procedures.

_______________19. A (_____________) is vital to financial governance of entities. This is a set of accounting principles, standards, interpretation and pronouncements that must be adopted in the preparation and submissions of the annual financial statements of a particular class of entities.

_______________20. The Financial Reporting Framework does not override or is not limited to the (_________) when there are conflictions. _______________21. The costs of providing financial information fall initially on the preparer (company) and then are passed on to consumers (external users). These costs include the cost of collecting, processing, auditing, and communicating the information as well as those associated with losing a competitive advantage by disclosing the information.

(Reviewer/Retention Paper) ENURMERATION: 1. Users’ Decision involve decisions about the……. a. b. c.

2. Who are the External Users’ of Financial Statements a. b. c. d. e. f. g.

3. There 2 users of Financial Statement who are they? a. b.

(Reviewer/Retention Paper) Property of :

Course/Institute :

Chapter II: Conceptual Framework and Theoretical Structure of Financial Accounting and Reporting, Part I IDENTIFICATION:

_______________1. The (________) provides a strong theoretical foundation and allows for the systematic adaption of accounting standards for a changing business environment. _______________2. Is it true that Conceptual Framework is not a standard? and none of the concepts override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the Board in developing standards. _______________3. (_________) are entities which have issued a class of securities listed for trading on an Exchange. _______________4. The (__________) is the “why” or purpose of accounting. _______________5. The objective of the (___________) is to provide financial information that is useful to users in making decisions relating to providing resources to the entity. ______________6. (________) refers to the ability of a company to use its financial resources to adapt change. ______________7. The (__________) refers to the availability of cash in the near future after taking account of financial commitments over this period. ______________8. (_________) refers to the availability of cash over the longer term to meet financial commitments as they fall due. ______________9. (_________) refers to the ability of a company to maintain a given physical level of operations. _____________10. The (_________) and (_________) are the fundamental qualitative characteristics of a useful financial information, and the guiding concepts that apply throughout the revised conceptual framework. _____________11. (__________) is capable of making a difference in the decisions made by the users. _____________12. Financial information is capable of making a difference in decisions if it has: (___________) and (___________). _____________13. Financial Information has (___________) if it can be used as an input to processes employed by users to predict future outcomes.

(Reviewer/Retention Paper) ______________15. Financial Information has (__________) if it provides feedback about (Confirms or Changes) previous evaluations. The information helps users to confirm or correct earlier predictions. ______________16. A practical boundary or constraint to achieving desired qualitative characteristics of relevance on the type of information provided is (________). ______________17. (___________) means that the numbers and descriptions match what really happened or existed. ______________18. (__________) means that all information necessary for a user to understand the economic activity or a phenomenon must be depicted, including all necessary descriptions and explanations. ______________19. (_________) means that an enterprise cannot select information to favor one set of interested parties over another. And it is supported by the exercise of prudence. ______________20. It will be a more accurate (faithful) representation of a financial item if it is (___________). ______________21. The (_________), (________), (________) and (________) are qualitative characteristics that enhance the usefulness of information that is relevant and faithfully represented. These characteristics distinguish more-useful information from less-useful information. ______________22. (___________) is the qualitative characteristic that enables uses to identify and understand similarities in and differences among items (such as economic events between companies). ______________23. (___________) refers to the use of the same methods for the same items, either from period to period within a reporting entity or in a single period across entities. ______________24. (___________) means that different knowledgeable and independent observers or users could reach consensus although not necessarily complete agreement that a depiction is a faithful representation. It occurs when independent measurers using the same methods obtain similar results. ______________25. (___________) means verifying an amount or other representation through direct observation, for example, by counting cash. ______________26. (___________) means checking the inputs to a model, formula or other technique and recalculating the output using the same methodology. ______________27. (___________) means having information available to decision makers in time to be capable of influencing their decisions. ______________28. (___________) serves a “link” between the decision-makers and the accounting information.

(Reviewer/Retention Paper) ENUMERATION: 1. What are the purposes of the Conceptual Framework a. b. c. d. e.

2. What are the Qualitative Characteristics of Accounting Information a. b.

3. What are the Elements of Financial Statements a. b. c. d. e. f. g. h.

4. What is under the Fundamental Quality: Relevance a. b. c.

(Reviewer/Retention Paper) 5. What is under the Fundamental Quality: Faithful Representation a. b. c. d.

6. What is the Enhancing Qualitative of Accounting Information a. b. c. d.