Financial Accounting Quiz

When Rashad, Damien, and Alfonso started their own tech startup, the process they used to keep track of their earnings and expenses is known as

• accounting

• controlling

• financing

• bookkeeping

The overall purpose of accounting in Rose's bakery is to

• maintain accurate reports

• compile the bakery’s expenses

• keep track of sales

• control the finances of the bakery

Why are accurate accounting records important to Malachi's Bakery?

• They prevent any financial losses

• They show the business how it is doing

• They increase the return on investments

• They give the business an image of success

At Liv's bakery, who regularly uses the managerial accounting information to make decisions?

• Managers

• Customers

• Creditors

• Investors

A creditor is most likely to examine a business’s financial accounting records if the business, owned by Taniyah and Rashad, is

• applying for a bank loan

• selecting a new market

• using cash accounting

• complying with regulations

Angie is an employee of the federal government who studies the financial reports of major businesses in the technology sector. The government’s purpose in assigning this task to Angie is to

• determine creditworthiness

• search for profitable investments

• decide if funds are available for pay raises

• identify trends in the industry

Imagine Coran runs a small cafe and uses an accounting system to manage the cafe's finances. For this system to be beneficial for Coran's business, the accounting information it contains must be:

• accurate and up to date.

• approved by the chief executive officer.

• posted by an accountant.

• recorded using the accrual method.

Imagine Rashad has started a small online business selling handmade pottery. Which of the following is a requirement for a good accounting system for his business:

• It should be updated annually.

• It should provide needed information quickly.

• It should eliminate the need for an accountant.

• It should be replaced every two or three years.

Two employees, JJ and Liv, used a business’s computerized accounting system to change some records. They were able to steal $50,000 from the business because the accounting system lacked which of the following:

• Protection from theft and fraud

• An affordable price

• A manual system as backup

• Printed financial statements

During a routine audit at a local bookstore, Angie found several items including checks, receipts, invoices, and purchase orders in the store's files. These items are examples of:

• financial statements.

• department ledgers.

• source documents.

• accounting standards.