Fundamentals of Accountancy, Business, and Management (FABM) 1 Practice Exam

These questions are part of the practice quiz. Start practicing

• The basic function of accounting is the generation of relevant and timely financial information for interested parties.
• 2 Users of Financial Information are:
• Internal users use financial information to set goals for their companies.
• Old Stone Labels are believed to date back to approximately how many years ago?
• Which archaeologist from the German Institute of Archaeology unearthed clay tablets regarded as among the oldest written tax accounting records?
• Which type of business operation produces items by converting raw materials into finished goods, with overhead costs?
• Involves conducting a careful and diligent study aimed at discovering and interpreting facts, revising accepted theories in the light of new facts, or the practical application of such new or revised theories for the generation of a new knowledge. This is known as:
• The predecessor of the present American Institute of Certified Public Accountants was which organization?
• During which century did Luca Pacioli write Summa de Arithmetica, Geometrica, Proportioni et Proportinalita?
• An adjusting entry to record depreciation for equipment with cost $24,000, estimated life 6 years, no salvage value, using straight-line method is to
• In double-entry accounting, which statement is true?
• Which term refers to writing down of business transactions chronologically in the books of account as they transpire?
• The discipline that focuses on a careful study of cost data to support production planning is:
• Which statement best describes fixed costs vs variable costs?
• The examination and review of accounting reports to ascertain their fairness, propriety, and reliability is called.
• Which form of external capital involves ownership interest in the business?
• Why is budgeting important in business management?
• The term that includes the raw materials, direct labor, and factory overhead as part of production costs is:
• COA stands for which of the following?
• Which term represents the qualitative and quantitative financial information about the business transactions in a language comprehensible to the users of financial statements?
• Which principle emphasizes recording assets at the price paid to acquire them, not at current market value?
• Which statement about accrual accounting is true?
• What is an ethical dilemma in accounting?
• Accumulated depreciation is which type of account?
• The International Accounting Standards Board superseded which organization?
• What is posting?
• Which 12-month period starts on any month of the year and ends twelve months after the starting period?
• The Information Age is also known as which of these terms?
• In Mesopotamia, which two forms of records were used to document loans, herds, crops, and trade?
• Which term describes the process of turning raw materials into finished goods?
• NOT an internal user?
• Which term is preparing the financial statements from the transactions recorded in the books of account that are designed to meet the information needs of its users?
• What is the full form of IASB?
• What is a chart of accounts?
• Which statement is true regarding the American Institute of Certified Public Accountants?
• Which financial statement shows the company's revenues and expenses for a period?
• Which accounting activity involves keeping a chronological diary of events measured in pesos?
• Which principle requires that information be disclosed to enable informed decision-making by users?
• Internal Users are the primary users of financial information who are inside the reporting entity and are directly involved in managing the company's daily operations. Which term describes them?
• What does budgeting help manage in relation to cash flow?
• The Greeks adopted which writing system to facilitate record-keeping before developing their own alphabet?
• The Old Stone Labels were found in the tomb of which Egyptian ruler?
• As evidence that Greek bankers offered credit and transferred funds between cities, which type of records is cited?
• External users are outsiders to the company who may significantly affect the business entity.
• Which term refers to writing down of business transactions chronologically?
• Which principle recognizes income when it is earned and expenses when incurred?
• Which of the following would be increased by recording a debit?
• Which financial statement shows the assets, liabilities, and owner's equity at a point in time?
• Which book contains all the real estate surveyed by William the Conqueror and taxes due to them?
• Which term describes the act of grouping transactions into assets, liabilities, and owners' equity?
• What is the revenue recognition principle?
• Cotrugli's manuscript titled which work contains a brief description of the double-entry bookkeeping and was never printed?
• Which of the following is an external user of financial information?
• Which organization defines management accounting as a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy?
• Which section of Summa de Arithmetica contains 36 short chapters that describe bookkeeping?
• DTI stands for which government department?
• The collection, determination, allocation, assessment, interpretation, and control of cost data, particularly the cost of production in a manufacturing concern, is associated with which accounting field?
• When revenue is earned but cash has not yet been received, the adjusting entry typically includes:
• Which term is sorting similar and related business transactions into the three categories of assets, liabilities, and owners' equity?
• At period end, what happens to temporary accounts?
• If a company prepaid insurance of $1,200 for one year on January 1, what is the adjusting entry recorded on March 31 for one quarter used?
• Which principle requires treating the business and its owners as separate accounting entities?
• Which of the following best describes accrued expenses?
• What is the primary focus of the Domesday Book as described?
• Who granted the royal charter to the Institute of Accountants in Glasgow on July 6, 1854, thereby creating the profession of Chartered Accountant?
• Which type of business organization is a separate legal entity?
• If Revenues are 100,000 and Expenses are 85,000, Net Income is
• Which board specifically develops standards for not-for-profit and state and local governments?
• Which organization is described as the professional body for management accounting?
• Which ancient device functioned as a calculator?
• GASB stands for which of the following?
• What is the matching principle?
• What are the four aspects of accounting?
• Which term means something done as work or for a particular purpose?
• Summa de Arithmetica, Geometrica, Proportioni et Proportinalita translates to which of the following?
• Which type of operation involves the production of goods from raw materials and incurs overhead costs?
• Which of the following describes an advantage of forming a partnership over a sole proprietorship?
• Which principle states that all material facts that significantly affect financial statements must be disclosed?
• Which civilization is credited with introducing the use of an annual budget?
• Which pair represents the two users of financial information?
• Which business form is characterized by investors called stockholders and ownership measured in shares of stock?
• What does the acronym AICPA stand for?
• Which fundamental principle requires that all business transactions entered in the accounting records be duly supported by verifiable evidence?
• Which term is defined as a skill acquired by experience, study, or observation?
• A completed action which can be expressed in monetary terms. Which term describes this concept?
• What does the term 'Prepaid' typically represent?
• What is the purpose of a trial balance?
• Which term describes presenting financial information in a language users can understand?
• After closing entries are posted, a post-closing trial balance should show which of the following?
• What is the effect of depreciation on the financial statements?
• Section 109 of Presidential Decree No. 1445 states that _____________ encompasses the process of analyzing, classifying, summarizing, and communicating all transactions involving the receipt and disposition of government funds and property, and interpreting the results thereof.
• Which organization is a group-owned and democratically managed association of individuals who pool resources and profits?
• What does the acronym SEC stand for?
• Who wrote Summa de Arithmetica, Geometrica, Proportioni et Proportinalita, regarded as foundational to accounting knowledge?
• What does the current ratio measure?
• Which group is identified as an internal user of financial information?
• What are the stone labels found in the tomb of King Scorpion I that recorded taxes on oil and linens called?
• What is the purpose of internal controls in accounting?
• Which group evaluates a business's ability to pay its obligations when extending credit?
• The acronym BIR stands for:
• Which civilization introduced coin money around 600 BCE?
• Which 12-month period starts on January 1 and ends on December 31?
• Which of the following is NOT one of the four aspects of accounting?
• The step that focuses on converting recorded data into an organized summary for users is called?
• What is the primary objective of the Fundamentals of Accountancy, Business, and Management 1 course?
• The term that involves planned grading and formal teaching in an educational institution by a professional accountant is:
• Under which accounting principle are revenues recognized at the point of sale and expenses recognized when incurred, irrespective of cash flow?
• The preparation of monthly value-added tax, percentage tax, expanded withholding tax returns quarterly and annual tax returns, and any other taxes applicable to business is part of:
• External users may be interested in which of these?
• Which act was passed by the US Congress in 2002 to protect investors from corporate misinformation?
• Accounting is the process of identifying, recording, and communicating which aspects of a business?
• Which statement best describes accounting?
• If rent for the next six months is prepaid for $6,000, what adjusting entry is made at month end after two months?
• What does the acronym IMA stand for?
• Which figure did Pacioli credit for the original idea of double-entry bookkeeping?
• Which concept requires using uniform accounting methods from period to period, with changes clearly explained?
• Which document is commonly used to record a sale transaction?
• Which term describes a series of actions that produce something or lead to a particular result?
• Which writing material developed by ancient Egyptians around 4000 BCE enabled recording of commercial transactions as well as religious texts and other literature?
• Which accounting concept requires assets and services acquired by the business to be recorded at their original acquisition cost?
• The cost of production includes the raw materials, direct labor, factory overhead, and all other costs involved in each stage of production of the finished goods. Which term describes these costs?
• Which formula correctly computes net income?
• Which fundamental concept states that financial information is prepared for specified time periods, such as one year?
• In a perpetual inventory system, which entry is recorded to recognize the sale of inventory for cash, where cost of goods sold is $50 and the sale price is $150?
• When was the Dodd-Frank Act signed into Federal Law?
• Under which principle are revenues recognized when goods are delivered and expenses recognized when incurred?
• Who performed extensive writing and recording duties in Mesopotamian civilization, analogous to present-day accountants?
• If Net Sales are 120,000 and Cost of Goods Sold is 75,000, what is the Gross Profit?
• Record a sale on credit for $1,200.
• GAAP stands for which of the following?
• De Computis et Scripturis is a section of Summa that is described as containing how many chapters?
• The acronym DTI refers to which of the following?
• Which of the following is NOT listed as a basic accounting principle?
• According to revenue recognition principles, when is revenue typically recognized?
• Are terms revenue and income interchangeable? Explain.
• What term refers to the coordinated estimation of revenues and taxes in relation to national expenditures?
• Which document is typically used to record a purchase from a supplier?
• Which equation correctly states the fundamental accounting equation?
• For tax purposes and SEC compliance, which group uses financial information?
• In England, which figure took possession of all properties in the name of the king upon invasion?
• Which topic discusses the origins of writing itself may have been developed from early marks used to keep account of goods more than 5,300 years ago?
• Which statement best describes government accounting as defined in Section 109 of Presidential Decree No. 1445?
• Depreciation expense has which effect on the financial statements?
• Which accounts have normal credit balances?
• If a company earns revenue on credit but does not yet collect cash, how does accrual vs cash basis affect when revenue is recognized?
• Which business organization is an association of small producers and consumers who own, manage, and patronize the business?
• How is gross profit calculated?
• Which term means that approaches used in reporting must be uniformly employed from period to period, with any changes clearly explained?
• Record a cash sale of $750 when cash is received.
• What is the purpose of a post-closing trial balance?
• If revenues are recognized before they are earned without adjusting entries, what would happen to the financial statements?
• Which of the following represents permanent accounts?
• When was the royal charter to the Institute of Accountants granted by Queen Victoria?
• Which form of business organization provides limited liability protection for its owners?
• Which option lists all internal users?
• Ethics in accounting refers to
• Types of business organizations
• Which term refers to presenting the financial information to users?
• What is a journal entry?
• The professional accountant imparts knowledge to students enrolled in an accounting subject either in basic accounting or in higher accounting subjects. This activity is called:
• Which accounting principle requires that assets be recorded at their original cost?
• Which statement about corporations is correct?
• What term refers to the methods used by a business to keep records of its financial activities and summarize these accounts in periodic accounting reports?
• What is the primary purpose of source documents in recording transactions?
• What is the break-even point?
• Which internal user uses financial information to set goals for the company?
• Which historical period saw hand tools replaced by machine tools, transforming accounting into an actual profession?
• How does not-for-profit differ from for-profit in terms of profit distribution?
• Which basic concept regards the business enterprise as separate and distinct from its owners and from other business enterprises?
• Which principle states that information is material if omitting or misstating would influence decisions?
• Which field involves a careful and diligent study to discover facts, revise theories, or apply new knowledge in accounting?
• What is an adjusting entry and why is it necessary at period end?
• Which basic accounting principle ensures consistency of accounting methods over time?
• Which civilization introduced coin money around 600 BCE and adopted the Phoenician writing system, using the Greek alphabet for record-keeping?
• Which type of business activity involves Buying and selling of goods and includes marketing to customers?
• Which principle governs the timing of revenue and expense recognition based on accrual accounting?
• Which statement about employees is true?
• Which concept refers to information being significant enough to influence prudent users’ decisions?
• Which statement best describes Owner's Equity?
• The 2002 act passed to protect investor interests is commonly known as what?
• What does the statement of changes in equity report?
• Potential investors or creditors are interested in which aspects?
• The Securities and Exchange Commission (SEC) was formed as a result of which historical event?
• DBM stands for which of the following?
• Which case is described as the greatest corporate fraud case in American history that led to the closure of Arthur Andersen?
• The date listed as the signing date for the Dodd-Frank Act in the material is which of the following?
• Which accounts have normal debit balances?
• Which type of business operation is focused on providing services and relies on the skill and quality of service?
• Which area of study involves the planned grading and formal teaching in an educational institution by a professional accountant?
• Depreciation affects which financial statements directly?
• Which record is the oldest surviving accounting record in the English language, containing the yearly accounting of rents, fines, and taxes due to the King from 1130 to 1830?
• In accrual accounting, when are revenues recognized?
• What are two primary sources of external capital for a business?
• What is the purpose of closing entries?
• Which term refers to information being significant enough to influence decision-making and should be disclosed in financial statements?
• What does FASB stand for?
• IASB stands for which organization?
• Which term refers to sorting transactions into assets, liabilities, and owners' equity to aid reporting?
• The agencies responsible in performing government accounting functions are which of the following sets?
• Which of the following is a typical purpose of adjusting entries related to revenue?
• What is the effect of recording depreciation expense on the financial statements?
• Which term describes the occupation or function of serving?
• Which organization is responsible for setting standards for private sector financial reporting in the United States?
• Which term is defined as a skill acquired by experience, study, or observation?
• Which statement requires that all material facts that will significantly affect the financial statements must be indicated?
• Provide an example of a deferral and its adjusting entry.
• Name two common source documents used in recording transactions.
• In which year did the United States experience a major economic recession according to the material?
• Which of the following would be increased by recording a credit?
• Which figure is commonly regarded as the 'Father of Accounting'?
• Provide adjusting entry for accrued salaries of $600 at year-end.
• Which statement best describes accounting?
• Which concept states that financial reporting only concerns information significant enough to influence decisions?
• An adjusting entry for accrued service revenue of $900 at year-end should record
• IASC stands for which organization?
• Which term describes the systematic process of measuring and reporting relevant financial information about the activities of an economic organization or unit?
• Which type of business activity is defined as buying and selling goods, with marketing to customers?
• What form of business organization is owned by two or more people who contribute capital and share profits?
• NOT an external user group?
• Which artifact type records tax and accounting records in Mesopotamia?
• Which year saw the birth of the first national US accountancy?
• Which form of business organization is owned and managed by a single person?
• What does a trial balance attempt to prove?
• Which concept states that information is material if its omission or misstatement could influence decisions?
• Name three common forms of business organization.
• Which word best describes a series of actions that lead to a result?
• What is a general ledger?
• What is the fundamental difference between cash basis and accrual basis accounting?
• Which statement correctly contrasts a corporation with a sole proprietorship?
• Which action occurs through the preparation and distribution of financial and other accounting reports?
• What term refers to the standards, assumptions, and concepts generally accepted in accounting?
• The device that functioned as a calculator in ancient times developed by ancient Sumerians in 5,000 BCE?
• Which concept assumes that the business enterprise will continue to operate indefinitely?
• Which journal entries correctly record (a) purchase of supplies on credit for $300; (b) payment of $200 on accounts payable?
• Under the accrual principle, which statement is true?
• Which audit firm was associated with the Enron scandal and subsequently closed?
• Which concept means assets are reported at their original cost rather than current market value?
• What term refers to the economic events of an organization?
• Which set correctly lists the three main types of business activities/operations?