SH3 Exercise PSAT semester 1 2425

What is the main function of accounting?

• To calculate the tax that must be paid by the company.

• To provide financial information for business decision makers.

• To record all financial transactions that occur within the company.

• To ensure that the company complies with all government regulations.

In the accounting equation, which element represents the owner's equity?

• Assets

• Liabilities

• Owner's capital

• Expenses

When the owner adds investment to the business, how does this transaction affect the accounting equation?

• Assets increase, Liabilities decrease

• Assets increase, Equity increases

• Liabilities increase, Equity increases

• Assets decrease, Equity increases

If a business purchases equipment on credit, how does this transaction reflect in the accounting equation?

• Assets increase, Liabilities increase

• Assets decrease, Liabilities increase

• Liabilities increase, Equity decreases

• Equity increases, Liabilities decrease

What is the main function of financial statements in a business?

• To accurately measure the business's profit.

• To provide information for managerial decisions.

• To assess the business's continuity.

• To record all transactions of the company.

How do business expenses paid in cash affect the accounting equation?

• Assets increase, Liabilities decrease

• Assets decrease, Equity decreases

• Liabilities decrease, Equity increases

• Assets decrease, Liabilities decrease

Which of the following is not an example of a stakeholder in a business?

• Customer

• Government

• Competitor

• Employee

The first step in the accounting process is...

• Collecting source documents.

• Recording transactions in the journal.

• Preparing financial statements.

• Providing advice to business owners.

Which document is commonly used as proof of cash payment by a business?

• Invoice

• Memo

• Credit note

• Check

The financial statement that shows the financial position of a company at a specific point in time is...

• Income Statement

• Cash Flow Statement

• Balance Sheet

• General Journal