Accounting Principles Quiz

Which of the following accounting principles is the reason the dollar is used in the preparation of financial statements

• Economic entity

• Going concern

• Time-period

• Monetary unit

Which of the following concepts or principles relates to separating the reporting of business and personal economic transactions?

• Cost principle

• Money measurement concept

• Economic entity concept

• Going concern concept

Which of the following statements best describes the primary focus of financial accounting?

• Providing information for internal decision-making within an organization

• Assisting with the planning and budgeting process

• Reporting financial information to external stakeholders, such as investors and regulators

• Analyzing cost behavior and profitability of products

The business entity concept means that.

• An entity is organized according to state or federal statutes.

• The owner is part of the business entity.

• an entity is organized according to the rules set by the Ministry of Finance.

• the entity is an individual economic unit for which data are recorded, analysed, and reported.

QUT Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be 220.000. ANU initially offered to buy the land for 177.000. The companies settled on a purchase price of 212.000. On the same day, another piece of land on the same block sold for 232.000. Under the cost principle, at what amount should the land be recorded in the accounting records of ANU Company?

• 212.000

• 177.000

• 220.000

• 232.000

Which of the following concepts relates to separating the reporting of business and personal economic transactions

• cost concept.

• business entity concept.

• materiality concept.

• unit of measure concept.

Which of the following groups are considered to be internal users of accounting information

• Employees and managers

• Employees and customers

• Customers and vendors

• Government entities and banks

Two common areas of accounting that respectively provide information to internal and external users are:

• Managerial accounting and environmental accounting

• Financial accounting and tax accounting systems

• Managerial accounting and financial accounting

• None of the options given

Which of the following best describes accounting?

• Accounting is used only for filling out tax returns and for financial statements for various type of governmental reporting requirements

• Records economic data but does not communicate the data to users according to any specific rules.

• Accounting is an information system that provides reports to users regarding economic activities and condition of a business

• Accounting is of no use by individuals outside of the business

The main purpose of accounting is to:

• Maximize the amount of profit that a company earns.

• Provide employment for those who specialize in handling numbers.

• Minimize the amount of profit that a company earns.

• Help information users make decisions about economic activities.