Introduction to Accounting

A complete set of financial statement has five basic components.

• True

• False

The financial statements are outputs of the accounting process.

• True

• False

The objective of financial statement is to provide information about the financial position, financial performance, and cash flows of a business that is useful to specific users so that they can make sound decision.

• True

• False

Business transactions are limited to interactions being engaged by business with customers and suppliers.

• True

• False

Financial statements provide information about a business’ asset, liabilities, equity, income and expenses, cash flows and contribution by and contributions to owners in their capacity as owners.

• True

• False

There is only one acceptable definition of accounting.

• True

• False

Accounting is only applicable to business rendering of services because accounting is a service activity.

• True

• False

Because accounting is systematic, definite techniques and their application require particular skill and experience.

• True

• False

Accounting is considered to be the language of business because it tells the luck of business.

• True

• False

Accounting deals only with economic transactions or business transactions that are financial in nature.

• True

• False