Accounting Quiz

The primary function of accounting is to:

• Minimize company taxes

• Provide financial information for decision-making

• Manage the company's stock price

• Hire new employees

Which of the following is considered an internal user of accounting information?

• A bank providing a loan

• A potential investor

• A department manager

• A government tax agency

The qualitative characteristic that ensures information is available to decision-makers before it loses its capacity to influence decisions is:

• Reliability

• Comparability

• Timeliness

• Consistency

The 'Business Entity Concept' implies that:

• The business will run for a long time

• The business is treated as separate and distinct from its owners

• All transactions must have a dual effect

• Profits should not be anticipated

An expenditure that provides benefits for more than one accounting period is called:

• Revenue Expenditure

• Deferred Expense

• Capital Expenditure

• Fictitious Expenditure

If a company's assets are ₹5,00,000 and its capital is ₹3,00,000, what are its liabilities?

• ₹8,00,000

• ₹2,00,000

• ₹3,00,000

• ₹5,00,000

The final step in the accounting process is:

• Recording in the Journal

• Preparing the Trial Balance

• Communicating information to users

• Posting to the Ledger

A pending lawsuit against a company represents a:

• Contingent Asset

• Fictitious Asset

• Current Asset

• Contingent Liability

Which branch of accounting focuses on calculating the cost of products or services?

• Financial Accounting

• Management Accounting

• Cost Accounting

• Social Responsibility Accounting

The 'Accrual Concept' states that:

• Revenue and expenses should be recognized when cash is received or paid.

• Revenue and expenses should be recognized when they are earned or incurred.

• Assets should be recorded at their historical cost.

• The business should be assumed to continue for a long time.