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Financial Accounting and Reporting Chapter 1 Exam Questions and Answers 100% Solved | Rated A+
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Financial Accounting and Reporting Chapter 1 Exam Questions and Answers 100% Solved | Rated A+ Accounting - The process of identifying, recording and communicating economic information that is used in making economic decisions. Identifying - The accountant analyzes each business transaction an...

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  • November 15, 2024
  • 19
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • financial accounting
  • financial
  • accounting and reporting
  • accounting
  • financial accounting and reporting
  • financial accounting and reporting

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  • Financial
  • Financial

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©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Financial Accounting and Reporting

Chapter 1 Exam Questions and Answers

100% Solved | Rated A+


Accounting - ✔✔The process of identifying, recording and communicating

economic information that is used in making economic decisions.

Identifying - ✔✔The accountant analyzes each business transaction and

identifies whether the transaction is an "accountable events" or "non-

accountable events"

Accountable Events - ✔✔Those that affect the assets. liabilities, equity,

income or expenses of a business.

Recording - ✔✔The account recognizes the identified "accountable

events". This process is called "journalizing".

After journalizing, the accountant then classifies the effect of the event on

the "accounts". This process is called "posting".

Account - ✔✔The basic storage of information in accounting. e.g., "cash",

"land", "sales", etc

,©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Communicating - ✔✔At the end of each accounting period, the accountant

summarizes the information processed in the accounting system to

produce meaningful reports.

What is the importance of summarizing the information processed in the

accounting system? - ✔✔This is important because the information

processed in the accounting system is useless unless it is communicated to

interested users.

How to communicate accounting information through interested users? -

✔✔Through accounting reports, the most common form of which is the

financial statements.

Nature of Accounting - ✔✔Accounting is a process with a basic purpose of

providing information about economic activities that is intended to be useful

in making economic decisions.

Types of Information Provided by Accounting - ✔✔1. Quantitative

information

2. Qualitative information

3. Financial information

Quantitative Information - ✔✔Information expressed in numbers, quantities,

or units

, ©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Qualitative Information - ✔✔Information expressed in words or descriptive

form

Where do we find qualitative information? - ✔✔Found in the notes of

financial statements as well as on the face of the other components of

financial statements

Financial Information - ✔✔Information expressed in money

Is financial information also a quantitative information? Why? - ✔✔Yes,

because monetary amounts are normally expressed in numbers.

Accounting as a science - ✔✔As a social science, accounting is a body of

knowledge that has been systematically gathered, classified, and organized

Accounting as art - ✔✔As a practical art, accounting requires the use of

creative skills and judgment.

Accounting as an information system - ✔✔A system is one that consist of

an input, a process, and an output.

What are the inputs, process, and outputs of accounting as an information

system? - ✔✔The inputs are the identified accountable events; the

processes are recording, classifying, and summarizing; and the output is

the accounting report that is communicated to the users.

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