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Fundamentals of Accountancy, Business and Management (FDNACCT)

FDNACCT 02 · Concepts and Principles

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Concepts and Principles. Test concepts and calculations with worked solutions.

Jade Laurence EmpleoPublic15 questionsFundamentals of Accountancy, Business and Management (FDNACCT)Updated
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Amounts are Philippine pesos (₱). Enter numeric answers without a currency symbol; commas are optional. Use accrual accounting, periodic inventory, prepaid expenses under the asset method, unearned revenue under the liability method, straight-line depreciation, and the allowance method unless a question states otherwise. Interest uses a 360-day year or months/12. Follow the course cash-flow convention: interest/dividends received are investing, interest/dividends paid are financing. Each Practice Lab table has one highlighted blank. Questions are independent; use only the facts given in that question.

Questions

01A report helps forecast future revenue. Which aspect of relevance does this illustrate?
  1. Predictive value
  2. Verifiability
  3. Neutrality
  4. Historical cost
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
02Actual results are compared with a prior forecast. What value does the comparison provide?
  1. Monetary value
  2. Confirmatory value
  3. Uniformity
  4. Liquidity
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
03Which set belongs to faithful representation?
  1. Comparability, timeliness, clarity
  2. Complete, neutral, free from error
  3. Predictive, confirmatory, liquid
  4. Cost, time, currency
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
04Which is an enhancing characteristic?
  1. Relevance
  2. Faithful representation
  3. Timeliness
  4. Accrual
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
05Owner groceries are kept out of business expense records. Which assumption applies?
  1. Entity
  2. Going concern
  3. Time period
  4. Cash basis
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
06Financial statements cover one calendar year. Which assumption explains this?
  1. Monetary unit
  2. Periodicity
  3. Prudence
  4. Substance over form
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
07A service is completed in December and paid in January. When is revenue recognized under accrual accounting?
  1. January only
  2. December
  3. When the owner withdraws cash
  4. Only at year two
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
08A customer pays for next month’s service. What is recorded initially?
  1. Revenue only
  2. Cash and unearned revenue
  3. Expense and cash
  4. Owner capital
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
09Which statement about prudence is correct?
  1. Always understate assets
  2. Always overstate expenses
  3. Use caution while remaining neutral
  4. Never estimate uncertain amounts
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
10A small item is expensed rather than tracked over many years because tracking costs outweigh useful information. Which constraint is illustrated?
  1. Going concern
  2. Cost-benefit
  3. Double entry
  4. Accrued revenue
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
11An invoice supports the recorded purchase. Which concept is most direct?
  1. Objectivity
  2. Drawings
  3. Periodicity
  4. Uniformity
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
12Using the same depreciation method for similar equipment across years primarily supports what?
  1. Consistency and comparability
  2. Intentional understatement
  3. Cash basis accounting
  4. Unlimited liability
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
13The business owes December electricity but pays in January. What is recognized in December?
  1. Nothing
  2. Expense and payable
  3. Prepaid asset and cash
  4. Owner drawing
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
14Which disclosure practice can obscure material information?
  1. Clear classification
  2. Scattering related facts across unrelated places
  3. Explaining estimates
  4. Grouping similar items usefully
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
15Why can a properly explained estimate still be useful?
  1. Estimates must always be exact
  2. Its process and limitations can be faithfully described
  3. It cannot influence decisions
  4. Neutrality requires ignoring it
FDNACCT Unit 2_Accounting Concepts and Principles_Study Guide.pdf, pp. 1–4
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