Information has the qualitative characteristic of timeliness if it is available to users in time to be abke to influence their decisions.

Total assets are 100. Total liabilities are 60. Total equity before income and expenses, is 30. If total income is 50, total expenses must be 30

Total income is 50. Total expenses are 60. Therefore, the difference of 10 is loss.

All the processes in an accounting system must observe the equality of the accounting equation

An intention to obtain control over an economic resource at a future time does not result to the recognition of an asset at present

Physical possesion is a necessary condition in order for control over an asset to exist.

All events involving an entity are recorded in the books of accounts

An entity controls an economic resource if it has the exclusive right to enjoy the economic benefits from the resource, including the ability to prevent others from enjoying those benefits

Total assets are 80. Total equity is 60. Therefore, total equity is 20.

Accountable events are recorded in the books of of accounts through a process of journalizing

After becoming a Certified Public Accountant (CPA), Mr. A worked as an external auditor in one of the biggest auditing firms in our country. Two years later, an international auditing firm offered Mr. A an external audit job abroad. which Mr. A accepted. Mr A will be applying similar accounting standards in his new job comoared to those that he has applied in his previous job.

Financial statements are prepared at least annually because of the concept of time period

Materiality is an "entity-specific" concept. Therefore, something that is material for one entity must necessarily be material for another entity

You own a business. Your business extends credit to various customers. One day, you found out that one of your customers account as loss because you don't expect that the customer will be able to pay you anymore. You are applying the conxept of prudence or conservatism.

Total assets are 10. Total Liabilities are 6. Therefore, total equity is 4.

The basic purpose of accounting is to provide information about economic activities that is intended to be useful in making economic decisions

An accounting period that shorter than 12 monthd is called an "interim period"

Total Liabilities are 60. Total equity is 30. Therefore, total assets are 30.

Total assets are 100. Total Liabilities are 40. Total equity, before income and expenses, are 40. Therefore, profit is 20.

In most cases, the start-up capital for a manufacturing business is more significant compared to a service business

In partnership or a sole proprietorship, the owner's liability for business debts is limited only to the amount the owner has contributed to the business

When determining the existence of an asset, legal ownership is always a necessary factor to consider

Financial Statements are the structured representation of an entity's financial position and results of its operations

Beggining equity is 10. Loss during the period is 4. If there are no other changes in equity, the ending balance of equity must be 6.

The anticipation of loss but not of gain is an application of the concept prudence or conservatism.

Presenting all amounts in the financial statements in Philippine pesos and disregarding the effects of inflation on the purchasing power of the Philippine peso relate to the concept of separate entity concept

The output in the financial accounting process is the financial statements

You are planning on investing in the shares of stocks of ABC Inc. You then downloaded ABC Inc.'s financial statements from internet to help you analyze whether the current market price of ABC Inc.'s shares are undervalued or overvalued. In this regard, you are considered an internal user of financial statements.

As practical art, accounting requires the use of creative skills and judgement

The settlemnt of a liability requires the transfer of an economuc resource

A property that you do not have the right to use, sell, lease, transfer, or other similar rughts may not be your asset, even if you are the legal owner of that property.

A fiscal year period that starts on july 1 of yhe current year ends in on july 31 of the following year

Both the definitions if income and expenses encompass changes in assets and liabilities but excluding those changes that relate to business owner's investments to, or withdrawals from, the business

The corporate form of a business organization provides the highest degree of continuity

The difference between income and expenses is profit or loss. There is a profit if income exceeds expenses.

Financial accounting is concerned with the preparation of information geared towards the common and specific needs of external users only

The cost of providing financial information should not exceed the expected benefits to be derived from the information's use

Accounting concepts and principles (assumptions or postulates) are a set of logical ideas and procedures that guide the accountant in recording and communicating economic information

Accounting information is expressed onlu in numbers but never in words

Under the accrual basis of accounting, economic events recorded in the period in which they occur rather than at the point in time when they affect cash

Bookkeeping refers to the whole process of indentifying, recording, and communicating information to interested users

Your business has total assets of 10M, total liabilities of 6M and total equity of 4M. This means that out of tbe totak 10M resources, you provided 6M

Equity is defined as a residual amount -- being the difference between total assets and total liabilities

Legal obligations arise only from law.

Entity A acquires a regular ballpen. Instead of recognizing the cost of the ballpen as an asset to be subsequently depreviated, Entuty A immediately charges it as expense. This is an application of the concepts of materiality and cost-benefit.

Control is an essential aspect in tbe definition of an asset. Control means legal ownership.

Materiality is a matter of proffesional judgement and is based on the size and nature of an item being judged

An economic resource can produce economic benefits in many ways, including the potential of the resource to provide the entity, directly or indirectly, with cash.

The terms 'economic resource' and present obligation' refer to 'income' and 'expenses', respectively.

You own a business. Your business lacks capital so you provided additional cash. This transaction would result to income by your business.

The logical notions and procedures that guide the accountant in recording and communicating financial information and collectively known as "accounting laws and regulations"

Today, you went to the sari-sari store to buy one bottle of soy. You promised to pay for the soy next week. The store owner records immediately the sale today, rather than next week after collecting your due. This is an application of the accrual basis of accounting.

Beginning equity is 100. Profit during the perios is 20. If there are no other changes in equity, the ending balance of the equity must be 120.

The money and other resources contributed by the business owner to the business are owned by the business and are not the personal property of the owner anymore. This is an application of the concept of going concern.

A "reporting entity" (or simply 'entity') is one that is required, or chooses, to prepare financial statements

Measuring is the phase in accounting where financial statements are prepared and provided to interested users

Auditing is the branch of accounting that involves the inspection of an entity's financial statements or business processes to ascertain their correspondence with established criteria

Investment and credit decisions are most likely to be made by internal users of financial information

Total income is 100. Total expenses are 40. Therefore, the difference of 60 pesos is profit.

The opposite of going concern is liquidating concern, and this is the case if the business intends to end its operations or if it has no other choice but to do so.

Total assets are 20. Total Liabilities are 16. Therefore, total equity is 36.

The government regulatory body that us tasked with regulating corporations, including partnerships, is the CDA.

The basic accounting equation is Assets + Liabilities = Equity

Sociological and pyschological matters are within the scope of accounting

Unlike bookkeeping, accounting requires the interpretation of the significance of the information processed.

A business that converts raw materials into final products is called merchandising business.

Entity A is undergoing liquidation. Enity A's finacial statements therefore whould be prepared using the going concern assumption

Income decreases equity, while expenses increase equity.

A present obligation can result from a future event

Income is defined as increases in assets or decreases in liabilities that result in an increase in equity, other than those that relate to contributions by the business owner(s)