Accounting Quiz

Which of the following statements regarding accounting is incorrect?

• All business transactions and events are recorded in the accounting books.

• Although bookkeeping and accounting are interrelated, they are not the same.

• The purpose of accounting is to provide information that is useful in making economic decisions.

• A transaction or event is recorded in the accounting records only if it has an effect on the assets, liabilities, equity, income or expenses of the business.

Which of the following is not one of the necessary processes performed in accounting in order to provide information that is useful to interested users?

• Identifying

• Summarizing

• Recording

• Counting

Accounting is described in various ways. Which of the following is not one of those descriptions?

• Accounting is a process and a service activity.

• Accounting is a social science and a practical art.

• Accounting is the “language of business” because it is fundamental to the communication of financial information.

• Accounting is the art of professionally stealing money and other evil purposes.

Accounting has a long history. Which of the following is incorrect regarding the history of accounting?

• Accounting can be traced as far back as the prehistoric times.

• Accounting is as old as civilization and has evolved in response to economic and social needs of men.

• Fra Luca Pacioli is the mama of modern accounting.

• All of these are correct.

The main purpose of accounting is

• to account for money so it will not be lost.

• to provide information that is useful in making economic decisions.

• to safeguard the assets of a company.

• to provide a clear view of the state of the industry’s economy.

In accounting, the term “recording” is also called

• journalizing.

• communicating.

• debiting.

• videoing.

This process refers to the reporting of the information processed in the accounting system to interested users.

• Measuring

• Identifying

• Communicating

• Classifying

Which of the following statements is correct?

• Financial accounting is the branch of accounting that deals with the specific needs of an entity’s management.

• The internal users of accounting information include management, owners and creditors.

• The external users of accounting information include potential and existing investors and lenders and other creditors.

• Government accounting is the branch of accounting that deals with the analysis of the costs of products and services.

Which of the following statements is incorrect?

• Erroneous financial statements can lead to bad financial decisions.

• Internal users of financial information refer to the entity’s management personnel.

• Tax accounting refers to the branch of accounting that deals with tax computations, filing of tax returns, and tax planning.

• Accounting education is the branch of accounting that deals with the teaching of accounting and related subjects in order to produce competent and responsible business professionals.

The most common form of business organization is

• corporation.

• sole proprietorship.

• partnership.

• cell phone stand.