Chapter 1

Book keeping is mainly concerned with

• Recording of financial data

• Interpreting the data for internal and external users

• Designing the systems in recording, classifying, and summarizing the recorded data

• None of the above

Accounting is referred to as the "language of ___________________."

• Profit

• Accounting

• Life

• Business

Which of the following does NOT define accounting?

• Classifying

• Summarising

• Making decision

• Recording

Which one of these types of business organisations are controlled by one individual ?

• Sole proprietorship

• Partnership

• Limited company

These types of business organisations are managed and controlled by a board of directors appointed by the shareholders.

• Sole proprietorship

• Limited company

• Partnership

If the business fails and the assets are not enough to cover the debt, the payables do not have a right against the owners’ personal properties.

• Sole proprietorship

• Limited company

• Partnership

This type of business have the obligation to keep books and prepare accounts.

• Sole proprietorship

• Limited company

• Partnership

Which statements are TRUE ?

• Accounting is part of bookkeeping process.

• Shareholders contribute capital to the business

• The partnership and sole proprietorship have limited liability.

• The local authority is an internal user of accounting information.

Which of the following would NOT be considered as internal users of accounting data for a company?

• External auditor

• President of the company

• CEO of the company

• Salesman of the company

A supplier can be a company or an individual that

• provides goods and services used by the business

• gives loans to the business to help finance its activities

• owns shares of the business