Introduction to Accounting Quiz

Which one of these is the correct accounting process?

• Journal – Ledger – Trial Balance – Financial Statements

• Financial Statements – Trial Balance – Ledger - Journal

• Journal – Ledger – Financial Statements – Trial Balance

• Journal – Trial Balance – Ledger – Financial Statements

Which one of these Financial Statements components that shows the performance of a business?

• Statement of Financial Position

• Statement of Profit or Loss

• Statement of Changes in Equity

• Statement of Cash Flows

_____________ implies that a business is a separate unit from the owner of the business.

• Money Measurement concept

• Accrual concept

• Economic Entity concept

• Going Concern concept

Which of these is the characteristic of a sole proprietorship?

• More than one owner

• Difficult to setup

• Limited liabilities

• Unlimited liabilities

Which of these is not an example of an external user of accounting information?

• An owner

• A creditor

• A government agency

• A potential investor

Accounting is responsible in preparing Financial Statements while bookkeeping is not.

• False

• True

Financial Statements are prepared before preparing the Trial Balance.

• True

• False

Managers are one of the internal users of accounting information.

• True

• False

One of the characteristics of a company is unlimited liabilities.

• False

• True

A business entity concept combines the business assets with the owner’s personal assets.

• True

• False