Introduction to accounting Test

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Introduction to accounting Test - 13

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Weekly Quiz Competition

Question 1
1 / -0

________ is the language of business and used to communicate financial and other information to different interested parties like creditors, investors, researchers, governments etc.

A
Accounting

B
Cost Accounting

C
Costing

D
Management Accounting

Solution

Accounting is known as the language of the business as it communicates that how the business is operating, whether it is making profit or loss etc.
Accounting is used to communicate financial and other information to different interested parties like creditors, investors, researchers, governments etc.
Question 2
1 / -0

Which of the following would be considered as external users of accounting information's?

A
Board of Directors

B
Shareholders

C
Finance manager

D
Sales manager

Solution

External Users of Financial statements are those people which are outside the affairs of the business but use accounting information.
Example: banks, shareholders, creditors, etc.
Question 3
1 / -0

The sale of merchandise to the customers is an

A
External event

B
Internal event

C
Social event

D
None of the above

Solution

There are mainly Two Types of Economic events i.e., External Events and Internal Events.
External Events are those events that involve transactions between an outsider and an organization.
In this example, the Customer is an outsider and goods belongs to the business, therefore, this is an example of External Events.
Question 4
1 / -0

Business organisations involves

A
Non-financial Events

B
Economic events

C
Social Events

D
Welfare events

Solution

Economic Events are results of transactions that take place in the business organisations and which can be measured in monetary terms.
For example, expenditure incurred on its installation and trial runs incurred on Purchase of machinery.
Business organization involves only economic transaction.
Non-Economic Events are not recorded in the books of accounts as they cannot be recorded in measured in monetary terms.
Example: Death of the Partner or Key Manager.
Question 5
1 / -0

The prime objective of accounting is to _________________.

A
To record economic data

B
Provide the information basis of action

C
Classifying and recording business transaction

D
Attainment of economic goal

Solution

Accounting is an art of recording, classifying, summarizing and interpreting the data in a significant manner of money's worth business transactions.

The prime function of accounting is to classify and record all such business transaction. It plays an important role in providing appropriate information to the business for decision making.
Question 6
1 / -0

Which of the following statements is not an objective of financial reporting?

A
Provide information that is useful in investment and credit decisions.

B
Provide information regarding policy of organisation

C
Provide information that is useful in assessing cash flow prospective

D
None of these

Solution

They depict not only profits and losses, but even assets and liabilities. Let's take a look at the objectives of financial statements along with their features. They even help readers of these statements know the accounting policies used in them. These statements also provide information relating to the company's cash flows .
Question 7
1 / -0

Which of the following statements about differences between financial and managerial accounting is incorrect?

A
Managerial accounting information is prepared primarily for martial parties such as stockholders and creditors; financial accounting is directed at internal users

B
Financial accounting is aggregated; managerial accounting is focused on products and departments

C
Managerial accounting pertains to both past and future items; financial accounting focuses primarily on past transactions and events

D
Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors

Solution

Managerial accounting is for internal users like the owner, directors
whereas
Financial accounting is for external users like shareholders, creditors, bank etc.
Therefore, Only Option A is incorrect and the remaining are correct.
Question 8
1 / -0

_____________ is a post mortem of past costs.

A
Financial accounting

B
Cost accounting

C
Both A and B

D
None of these

Solution

Financial Accounting also has its limitation. It records all the transaction on its historical cost and does not consider the changes happen in future.
Financial Accounting does not consider the effect of inflation and change in the price level.
Therefore, it is a post mortem of the cost recorded in books of account.
Question 9
1 / -0

____________ provides information for income determination.

A
Financial accounting

B
Cost accounting

C
Management accounting

D
None of these

Solution

Financial accounting results in the determination of net income at the bottom of the income statement. Assets, liabilities and equity accounts are reported on the balance sheet. The balance sheet utilizes financial accounting to report ownership of the company's future economic benefits.
Question 10
1 / -0

____________ is the oldest branch of accounting.

A
Financial accounting

B
Cost accounting

C
Management accounting

D
None of these

Solution

Accounting has various branches. Such as:
1. Cost Accounting
2. Management Accounting
3. Financial Accounting.
Financial accounting is the oldest branch of accounting.
It has certain limitations too. To overcome these limitations, other branches i.e.cost accounting and management accounting are introduced.

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Re-Attempt Weekly Quiz Competition

Introduction to accounting Test - 13

Result

Introduction to accounting Test - 13

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SHARING IS CARING

Question 1

Accounting

Cost Accounting

Costing

Management Accounting

Solution

Question 2

Board of Directors

Shareholders

Finance manager

Sales manager

Solution

Question 3

External event

Internal event

Social event

None of the above

Solution

Question 4

Non-financial Events

Economic events

Social Events

Welfare events

Solution

Question 5

To record economic data

Provide the information basis of action

Classifying and recording business transaction

Attainment of economic goal

Solution

Question 6

Provide information that is useful in investment and credit decisions.

Provide information regarding policy of organisation

Provide information that is useful in assessing cash flow prospective

None of these

Solution

Question 7

Managerial accounting information is prepared primarily for martial parties such as stockholders and creditors; financial accounting is directed at internal users

Financial accounting is aggregated; managerial accounting is focused on products and departments

Managerial accounting pertains to both past and future items; financial accounting focuses primarily on past transactions and events

Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors

Solution

Question 8

Financial accounting

Cost accounting

Both A and B

None of these

Solution

Question 9

Financial accounting

Cost accounting

Management accounting

None of these

Solution

Question 10

Financial accounting

Cost accounting

Management accounting

None of these

Solution

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