Introduction to accounting Test

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Introduction to accounting Test - 26

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Question 1
1 / -0

Amit is recording sales transactions in the accounting system so that they can be summarized in a logical manner for the purpose of providing financial information for decision-making. Amit is doing ___________.

A
Management Consulting

B
Review

C
Accounting

D
Auditing

Solution

To review is to check the work already done/performed.

Management consulting refers to providing suggestions/ recommendations to the management to perform the business more effectively.

Auditing is examining.

Amit is doing none of the three but a simple accounting exercise.
Question 2
1 / -0

Accounting information is being used by __________.

A
Customers

B
Researchers

C
Both A & B

D
None of the above

Solution

There are different people or the stake holders interested to know about the financial position of the organization. These are customers, creditors, lenders, existing and prospective investors , tax authorities.
Customers are more interested to know about the business performance and the future plans of the organization.
Researchers are interested to know the accounting information to do further research and cpmparison with other similar industries.
Question 3
1 / -0

Which of the following is characteristic of accounting information?

A
Verifiability

B
Neutrality

C
Completeness

D
All of the above

Solution

There are mainly 4 characteristics of the accounting information
1. Understandability:
2. Relevance
3. Reliability
4. Comparability

Here, Reliability includes information to be verifiable, neutral and complete.
Thus, all the options are correct.
Question 4
1 / -0

Accounting involves _________.

A
decision making for the management easy as financial results can be compared.

B
the records being put is a systematic pattern so that any point of time they can be used.

C
the financial information being stored in a meaningful way for taxation purpose

D
all of the above

Solution

Accounting plays an important and useful role for the business owner. Main advantages are :
To record all the business transactions in a systematic way so that information can be used as and when required.
Financial statements are prepared on the basis of information recorded in the books of account, so that management can take a decision by comparing the results.
Accounting plays a vital role in giving the information to the taxation authorities to know whether business is following all the rules and laws and paying the tax in timely manner.
Question 5
1 / -0

Who is the father of Double entry- Book Keeping?

A
F.W. Taylor

B
Henry Fayol

C
Lucas Pacioli

D
None of the above

Solution

Luca Pacioli was an Italian mathematician and is famously known as The Father of Accounting and Bookkeeping due to his tremendous contributions in the field of accounting.
Question 6
1 / -0

Which of the following characteristics of accounting information primarily allows user of financial statements to generate predictions about an organization?

A
Reliability

B
Timeliness

C
Neutrality

D
Relevance

Solution

Information is relevant if it is available in time and helps in prediction.
The management needs accounting information for making a useful decision like where to invest, how was the performance of the business the year, where management needs to improve but if management does not get this information on time then they cannot make a certain prediction which is important for the success of the company.
Question 7
1 / -0

The branch of accounts that deals with the calculation of unit cost of services is called.

A
Cost Accounting

B
Management accounting

C
Financial Accounting

D
All of the above

Solution

The branch of accounts that deals with the calculation of the unit cost of services are called Cost Accounting.
Financial Accounting deals with recording, summarizing and reporting a company's business transactions through financial statements.
Management accounting is the process of preparing reports about business operations that help managers make short-term and long-term decisions.
Question 8
1 / -0

Accounting involves -
(I) Recording
(II) Classifying
(III) Summarizing
Select the correct answer from the options given below:

A
(I)

B
(I) & (III)

C
(I) & (II)

D
All of the above are correct

Solution

Accounting starts with
-identifying a transaction and then recording in Journal
-then classifying in the ledger
-then summarising in final accounts
-then interpretation through Ratio analysis
-then finally communicating the information to the users of the financial statement.
Thus, the first step is identifying and the last step is communicating the information.
Question 9
1 / -0

Accounting information is being used by ___________.

A
Customer

B
Researchers

C
Both a & b

D
None of the above

Solution

Well, Accounting information is used by customers for knowing about the continuity of the business and researchers for knowing about doing research on the business
Therefore, accounting information is used by Customers and Researcherrs
Question 10
1 / -0

Which of the following is/are the branch of accounting?
(P) Financial Accounting
(Q) Cost Accounting
(R) Management Accounting
Select the correct answer:

A
(P)

B
(Q)

C
(R)

D
All of the above

Solution

There are three branches of accounting. They are:
1. Financial Accounting: Financial Accounting deals with recording, summarizing and reporting a company's business transactions through financial statements.
2. Cost Accounting: The branch of accounts that deals with the calculation of the unit cost of services are called Cost Accounting.
3. Management Accounting: Management accounting is the process of preparing reports about business operations that help managers make short-term and long-term decisions.

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Introduction to accounting Test - 26

Result

Introduction to accounting Test - 26

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SHARING IS CARING

Question 1

Management Consulting

Review

Accounting

Auditing

Solution

Question 2

Customers

Researchers

Both A & B

None of the above

Solution

Question 3

Verifiability

Neutrality

Completeness

All of the above

Solution

Question 4

decision making for the management easy as financial results can be compared.

the records being put is a systematic pattern so that any point of time they can be used.

the financial information being stored in a meaningful way for taxation purpose

all of the above

Solution

Question 5

F.W. Taylor

Henry Fayol

Lucas Pacioli

None of the above

Solution

Question 6

Reliability

Timeliness

Neutrality

Relevance

Solution

Question 7

Cost Accounting

Management accounting

Financial Accounting

All of the above

Solution

Question 8

(I)

(I) & (III)

(I) & (II)

All of the above are correct

Solution

Question 9

Customer

Researchers

Both a & b

None of the above

Solution

Question 10

(P)

(Q)

(R)

All of the above

Solution

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