Fundamentals of Accounting Quiz

What is accounting according to the Accounting Standards Council (ASC)?

• A service activity that provides quantitative information.

• A method of recognizing and communicating economic details.

• A system designed to identify and process economic information.

• An art of recording and classifying transactions.

What are the main functions of accounting?

• Recording, Classifying, Summarizing, Analyzing, Communicating

• Recording, Classifying, Reporting, Auditing

• Recording, Summarizing, Taxing, Budgeting

• Classifying, Analyzing, Reporting, Communicating

What is the primary focus of financial accounting?

• Preparation of general-purpose financial statements.

• Internal management decision-making.

• Government resource allocation.

• Tax collection and valuation.

What does management accounting primarily assist with?

• External reporting to stakeholders.

• Internal decision-making for management.

• Tax compliance and reporting.

• Auditing financial statements.

What is the role of government in accounting?

• Concerned with taxes and compliance with regulations.

• Focus on financial performance of businesses.

• Oversee the auditing process.

• Provide financial statements to the public.

What is the significance of accounting education for CPAs?

• It is a requirement to take the licensure examination.

• It helps in understanding tax regulations.

• It is necessary for auditing practices.

• It is not essential for a CPA's career.

What is the primary concern of tax accounting?

• Proper measurement of taxes owed by entities.

• Preparation of financial statements.

• Internal management reporting.

• Auditing financial records.

What does internal auditing focus on?

• Operational efficiency and effectiveness.

• External financial reporting.

• Tax compliance.

• Preparation of financial statements.

What is the historical significance of Fra Luca Pacioli in accounting?

• He is considered the father of accounting.

• He developed the first accounting software.

• He was the first to audit financial statements.

• He created the first financial statement format.

What is the purpose of the accounting cycle?

• To ensure reliable and relevant financial information.

• To prepare tax returns.

• To classify financial transactions.

• To audit financial statements.