ACCTNG 211 1ST SUMMATIVE TEST

Which of the following best defines accounting?

• The process of identifying and communicating economic information

• The process of making sales in a business

• The process of identifying and selling goods

• The process of promoting a product

According to the American Accounting Association (AAA), accounting is:

• A quantitative information system

• The process of identifying, measuring, and communicating economic information

• The method of recording transactions

• The system of auditing financial records

Which of the following is NOT a function of accounting?

• Recording

• Summarizing

• Interpreting

• Marketing

What is the primary purpose of financial accounting?

• To aid in management decisions

• To prepare and interpret financial information for users

• To promote company products

• To record daily transactions only

Which of the following is a type of financial statement?

• Statement of Financial Obligations

• Statement of Financial Health

• Statement of Financial Performance

• Statement of Financial Growth

What is the key difference between accounting and bookkeeping?

• Accounting is only for large companies

• Bookkeeping involves recording transactions, while accounting involves analysis and summarization

• Bookkeeping focuses on auditing financial statements

• Accounting focuses on taxes only

Who are the internal users of financial information?

• Customers and investors

• Company officers, employees, and owners

• Government agencies

• Potential investors and creditors

Auditing focuses on:

• The fairness of the presentation of financial statements

• Managing company operations

• Ensuring the correct amount of tax is paid

• Installing accounting systems

What is the main objective of tax accounting?

• To determine the cost of products

• To ensure compliance with taxation laws and regulations

• To prepare financial information for investors

• To analyze cash flow

Which of the following is NOT a branch of accounting?

• Auditing

• Government Accounting

• Marketing Accounting

• Cost Accounting