ACTIVITY
ACCOUNTING AND FINANCE 5TH SEMESTER
Part One: Reading Comprehension
1. Budget
How important is business budgeting? Business budgeting is very important because it helps
businesses plan their financial future, measure performance, and make decisions effectively.
What is needed when a business prepares a budget? A business needs concrete goals that are
based on realistic forecasts.
What must managers do to prepare a budget? Managers must make educated guesses about how
much they can invest and decide whether to prepare a long-term or short-term budget.
What does ‘it’ refer to? The word “it” refers to budgeting.
What should a business do with a negative prediction about the economy? The business should
tighten its budget if the economic forecast is negative.
2. Cost Accounting
What is the major purpose of cost accounting? The main purpose of cost accounting is to determine
the cost of producing goods or providing services.
What is the category of automobiles, appliances, furniture, and clothing? They belong to the
assembly type of manufacturing.
Give some examples of continuous-process manufacturing. Examples include petroleum products,
paper, flour, cement, sugar, and metals.
Why are there different principal methods of determining costs? There are different methods
because manufacturing techniques differ — some use assembly production and others use
continuous processing.
How many principles are there for cost determination? What are they? There are two principal
methods: job order cost accounting and process cost accounting.
Part Two:
Explain the objectives of cost accounting in a brief. The objectives of cost accounting are to
determine the cost of production, control expenses, set appropriate selling prices, and help ensure
business profitability.
What are the main Journal entry characteristics? Each journal entry records a business transaction
using both a debit and a credit, and it includes the date, a description of the transaction, and the
monetary amounts involved.
Which categories do the accounts fall under? Accounts fall under five main categories: assets,
liabilities, equity, revenues, and expenses.
What is Inventory Accounting? Inventory accounting is the process of recording, valuing, and
managing the goods a company holds for sale or for use in production.
How Does Overdraft Protection Work? Overdraft protection allows a bank to cover transactions
when an account does not have enough funds, preventing returned payments or overdraft fees.
Part Three: Choose the Correct Answer
What accounting principle governs the timing of revenue recognition? The correct answer is a.
Realization principle.
The following journal entry component is: The correct answer is a. Drawings Account.
The following journal entry is: The correct answer is b. Expenses Paid.
Another name for the balance sheet is: The correct answer is b. Statement of Financial Position.
Which of the following is a category or element of the balance sheet? The correct answer is c.
Liabilities.
6. Classification Table
7. Revenue vs. Expenses
8. Debit / Credit