FSPS0042 Introduction to Financial Accounting

Which of the following does NOT define bookkeeping?

• Classifying

• Making decision

• Summarising

• Recording

All the following statements about users of accounting information are correct EXCEPT

• Taxing authorities are considered as external users

• Present creditors are considered as external users

• Management is considered as an internal user

• Potential investors are considered as internal users

Which one of these business organisations has a separate legal entity from its owner(s), but the owner(s) is/are liable for the debts of the business?

• Sole proprietorship

• Public limited company

• Private limited company

• All the above

Which of the following refers to the accounting treatment of like items within each accounting period and from one period to the next

• Accruals

• Going concern

• Consistency

• Prudence

The nature of an asset is best described as:

• an economic resource that is expected to benefit future operations

• something with physical form that is valued at cost in the accounting records

• something owned by a business that has a ready market value

• an economic resource representing cash or the right to receive cash in the future

Assets are usually reported at their

• historical cost

• current market value

• appraised value

• none of the above

Which of the following are income?

• Motor vehicle

• Salaries

• Sales

• Purchases

Which one of the following statements is CORRECT?

• Assets + Capital = Liabilities

• Liabilities - Capital = Assets

• Assets + Liabilities = Capital

• Liabilities + Capital = Asset

What is the first step in the accounting cycle?

• Adjusting Entries 

• Closing Entries 

• Recording Transactions 

• Financial Statements

Which financial statement is prepared first in the accounting cycle?

• Statement of Financial Position

• Statement of Cash Flows

• Trial Balance

• Statement of Profit and Loss