Financial Accounting Topic 1

Which of the following does NOT define accounting?

• Summarising

• Classifying

• Making decision

• Recording

Bookkeeping does not involve one of the following steps. Which one is it?

• Interpreting

• Identifying

• Recording

• Measuring

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

• 1. Taxing authorities are considered as external users.

• 1. Present creditors are considered as external users.

• 1. Management is considered as an internal user.

• 1. Potential investors are considered as internal users.

Which of the following correctly states the liabilities of the business entities.

• A

• B

• C

• D

1. Differentiate sole proprietorship, partnership and limited company in terms of capital, management and liability of members.

1. Differentiate between accounting and bookkeeping.

1. Explain briefly the four stages of accounting.

1. State two internal users and two external users of accounting information and also state their purpose for using the information.

1. State two types of journals and two types of ledgers.

1. Accounting is part of the bookkeeping process.

• TRUE

• FALSE