LO:C Purpose of accounting MCQ

What is one of the primary purposes of accounting?

• Conducting employee performance reviews

• Recording transactions

• Improving marketing strategies

• Hiring employees

How does accounting help in the management of a business?

• By developing new products

• By assisting with planning, monitoring, and controlling financial activities

• By increasing sales

• By improving customer service

Why is compliance important in accounting?

• To prevent fraud and ensure legal regulations are followed

• To create marketing strategies

• To manage employees

• To increase customer satisfaction

Which of the following is NOT a part of measuring performance in accounting?

• Analyzing financial data

• Tracking sales

• Developing new products

• Assessing profit and loss

How does accounting assist in fraud prevention?

• By tracking trade receivables and trade payables

• By promoting products

• By creating financial statements

• By ensuring compliance with the law

Which of the following is an example of capital income?

• Cash sales

• Loan

• Rent received

• Commission received

Which type of income is generated from the sale of goods and services for cash?

• Capital income

• Revenue income

• Loan income

• Investment income

Which of the following is considered revenue income?

• Owner’s capital

• Interest received

• Shares

• Mortgage

What is the source of capital income in a business?

• Cash sales

• Trade receivables

• Loans and mortgages

• Interest received

Which type of income is represented by shares?

• Revenue income

• Discount received

• Capital income

• Rent received