Accounting and Finance Quiz

What is the primary purpose of accounting?

• To measure the physical assets of a business

• To identify, measure, and communicate economic information

• To conduct market research

• To create advertising campaigns

Which of the following is NOT a goal of accounting?

• Accumulate and report on financial information

• Assist in managing a business

• Develop marketing strategies

• Provide information for investing or lending decisions

What does the term 'financial accounting' refer to?

• Preparing internal reports for management

• Preparing and presenting financial information for external users

• Creating company policies

• Conducting employee performance reviews

What does the 'matching principle' relate to?

• Matching suppliers with customers

• Matching inputs and outputs in financial reporting

• Matching budgets with actual expenses

• Matching investments with returns

Which of the following is a limitation of accounting information?

• The immediate availability of real-time data

• Time lag in financial reporting

• Precision in forecasting future trends

• Zero subjectivity in financial reporting

Why is accounting referred to as the 'language of business'?

• It helps businesses with language training

• It translates economic events into financial statements that are understandable to users

• It involves translating documents into multiple languages

• It is used exclusively in international trade

What is the focus of management accounting?

• External financial reporting

• Internal decision-making and planning

• Regulatory compliance

• Market analysis

Which accounting principle states that expenses should be matched with revenues?

• Cost Principle

• Matching Principle

• Profit Recognition Principle

• Going Concern Principle

What does the entity concept imply in accounting?

• A business is the same as its owners

• Business transactions are recorded separately from the owner’s personal transactions

• All transactions are recorded on a cash basis

• A business’ transactions are ignored if the owner is involved

What is the primary difference between financial accounting and management accounting?

• Financial accounting focuses on internal users; management accounting focuses on external users.

• Financial accounting provides information for decision-making; management accounting does not.

• Financial accounting provides information for external users; management accounting focuses on internal users.

• Financial accounting is concerned with future trends; management accounting deals with historical data.