ARFB113 Topic 1

Which of the following statements best describes the term 'accounting'?

• Accounting is a process of recording economic events in journals and ledgers in the proper order, so that the financial statements prepared are correct.

• Accounting is a process of keeping business records to determine the profit made in a financial period.

• Accounting is a technique of recording business data using the double-entry system to produce an accurate trial balance to aid decision-making.

• Accounting is a process which involves analysing business data, and recording and communicating financial information of an entity in a specified period to be used for decision-making.

The financial accounting process involves all of the following, except

• Identifying economic transactions that are relevant to the business.

• Communicating financial information to users by preparing financial reports.

• Recording non-quantifiable economic events.

• Analysing and interpreting financial reports.

Bookkeeping is different from accounting. Which part of the accounting process does bookkeeping primarily involve?

• Identification

• Measurement

• Communication

• Recording

Which of the following highlights the correct order of the stages in an accounting cycle?

• Journalising, financial statements, posting to the ledger and trial balance.

• Journalising, posting to the ledger, trial balance and financial statements.

• Posting to the ledger, trial balance, financial statements and journalising.

• Posting to the ledger, journalising, financial statements and trial balance.

_____________ presents the financial performance of a business for a specific period of time.

• Statement of profit or loss

• Statement of financial position

• Statement of changes in equity

• Statement of cash flows

______________determines and issues accounting standards for the preparation of financial statements, which are required to be prepared or lodged under any law administered by the Securities Commission Malaysia, Bank Negara Malaysia or the Registrar of Companies.

• Malaysia Boleh

• Malaysian Accounting Standards Board

• Malaysian Institute of Accountants

• Malaysian Institute of Certified Public Accountants

For a business, a supplier can be a company or an individual that

• gives loans to the business to help finance its activities.

• the business sells goods or services to.

• provides goods and services used by the business.

• owns shares of the business.

_______________ deals with designing and evaluating business processes, preparing budgets, preparing trend analysis and ratio analysis, and forecasting

• Financial accounting

• Auditing

• Taxation

• Management accounting

Which type of business organisation has a separate legal entity from its owners, and the owners are not liable for the debts of the business?

• Sole proprietorship

• Partnership

• Limited company

• None of the above

You are one of the users of annual report provided by company. What do you want to know in the annual report? Provide ONE (1) answer only.