Introduction to Accounting Quiz

What is the primary goal of accounting?

• To calculate tax liabilities

• To keep a record of transactions

• To provide financial information to stakeholders

• To record only cash transactions

Who among the following primarily needs accounting information to assess the solvency of a business?

• Management

• Creditors

• Government

• Employees

Which of these is not an advantage of accounting?

• Facilitates control over assets

• Predicts future economic trends

• Prevents all errors and frauds

• Assists in decision-making

What does the convention of conservatism in accounting imply?

• Recording revenue when earned, regardless of receipt

• Recording higher values for assets

• Recording anticipated losses but not gains

• Reporting optimistic financial results

Which accounting principle assumes the business will operate indefinitely?

• Cost Principle

• Matching Principle

• Going Concern Principle

• Consistency Principle

What is the purpose of an accounting equation?

• To measure profit or loss

• To maintain balance in the books

• To ensure compliance with standards

• To explain the relationship between assets, liabilities, and equity

Which Indian Accounting Standard (Ind AS) covers 'Revenue from Contracts with Customers'?

• Ind AS 115

• Ind AS 1

• Ind AS 21

• Ind AS 10

In the American approach, which account type is debited when assets increase?

• Liability Account

• Revenue Account

• Expense Account

• Asset Account

What is the purpose of a trial balance?

• To prepare financial statements

• To locate errors in journal entries

• To verify that total debits equal total credits

• To record transactions

Which of the following accounts has a credit balance?

• Cash Account

• Capital Account

• Equipment Account

• Rent Expense Account