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a
1. The primary responsibility for the preparation and
presentation ofthe nancialstatements of an entity is reposed
inthe
a. Management of theentityb. Internalauditorc.
Externalauditor
d. Controller
a
2. Financial statements must be prepared atleast
a. nnually
b. !uarterlyc."emiannuallyd. E#ery t$oyears
d
%. $hich of the follo$ing accounts $ould be increasedby a
debit&
a. "hare
capitalb. 'otespayablec. ccountspayable
d. (i#idends
b). these are present obligations of an entity arising from past
transactionsor e#ents* thesettlement of $hich is expected to result
in an out+o$ from the entity ofresources
embodying economic benets
a.ssets
b. ,iabilitiesc.E-uity
d. Expenses
d. it is the residual interest in the assets of theentity
after
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deducting all of itsliabilities
a. Income
b. Expense
c. 'et incomed.E-uity
a
/. The assumption that an enterprise $ill continue in operation
for theforeseeable future
is based ona. 0oingconcern c. rudence
b. ccounting entity d. Materiality
b
. In the e#ent of con+ict bet$een the economic substance of a
transactionand the legal
form* the economic substance shall pre#ail. This concept is3no$n
as
a. Form o#ersubstanceb. "ubstance o#erformc.
Faithfulrepresentationd.Completeness
c
4. 5hich is incorrect concerning users and theirinformation
needs&a. ,enders are interested in information that enables
them todetermine $hether theirloans and the interest on these loan
$ill bepaid in dueb. The pro#iders of ris3 capital and their
ad#isers are concerned $iththe ris3 of inherentin return pro#ided
by theirin#estment
c. 0o#ernment and its agencies ha#e an interest in information
about thecontinuance ofan enterprise especially $hen they ha#e
long6term in#ol#ement orare dependent on the
enterprise.d. Employees and their representati#e groups are
interested ininformation about thestability and protability ofthe
entity.
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d
7. $hich of the follo$ing is 8are9 realaccount8s9&
a. 0ood$illb."ales
c. ccounts :ecei#able
d. ;oth good$ill and ccounts :ecei#able
b
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