Easylink First Month Quiz - Accounting

What is the main purpose of Financial Accounting of a firm?

• Preparation of General Purpose Financial Statements in compliance with Standards

• Recording transactions to find the profit for the year

• To communicate information for decision making of the stakeholders of the firm

• Recording transactions for the use of managers

Who are the users of Management Accounting Reports?

• Government and Auditors

• Managers and Directors

• Suppliers and Customers

• All Employees

Which of the following statements about Management Accounting is true?

• It provides on demand information for all stakeholders

• It provides information as prescribed in the accounting standards

• It contains only past information about a firm

• It contains both past and future information about a firm

Which one of the following will fall under the definition of a liability?

• Debtors

• Cash

• Owner's Equity

• Bank Loan

Which of the following statements are false?

• If you cannot work out a value for an item that will bring you future benefits, then you cannot keep this as an asset in your records.

• A debtor is a debt to your business

• A liability is a debt for your business

• Liabilities will have an outflow of economic benefits in the future

It is a legal requirement to provide Financial Accounting Reports.

• False

• True

Which one of the following is not a component of Financial Accounting?

• Notes

• Inventory Changes Statement

• Cash Flows Statement

• Profit or loss Statement

Which one of the following can be considered as an asset?

• Cash in Bank

• Net Profit

• Tax Payable

• Creditors

The main difference between Management Accounting and Financial Accounting is;

• Financial Accounting records only monetary transactions

• Management accounting reports contain only non-monetary values

• Financial Accounting is for all stakeholders and Management Accounting is for internal use only

• Management accounting reports should be published annually.

Which of the following is not an element of Financial Accounting?

• Equity

• Liabilities

• Purchases

• Assets