Ethical Issues in Accounting and accounting concepts

What is a code of ethics?

• A set of guidelines for ethical conduct

• A financial statement

• A type of business organization

• A tax regulation

Which of the following is NOT one of the ethical principles of accounting?

• Profitability

• Confidentiality

• Objectivity

• Integrity

What does ethical behavior involve?

• Following legal requirements only

• Living by principled values

• Maximizing profits

• Avoiding all risks

What is the primary responsibility of accountants according to ethical principles?

• To maximize profits

• To act in the public interest

• To avoid all conflicts of interest

• To maintain personal relationships

Which principle requires accountants to keep their knowledge and skills updated?

• Integrity

• Objectivity

• Professional competence and due care

• Confidentiality

What is one consequence of inappropriate application of accounting principles?

• Increased trust from peers

• Disciplinary action by the professional body

• Higher profits

• More job opportunities

What does the term 'separate entity' refer to in accounting?

• The business is treated as separate from its owners

• Owners can use business funds for personal use

• All profits belong to the owners

• Businesses do not need to keep records

Which of the following is an example of inappropriate application of accounting principles?

• Providing training to staff

• Fraudulent financial reporting

• Maintaining confidentiality

• Accurate financial reporting

What is the purpose of the cash flow statement?

• To detail employee salaries

• To record profits and losses

• To summarize cash inflows and outflows

• To show the company's assets

What is a sole trader?

• A type of partnership

• A business owned by one individual

• A business owned by multiple individuals

• A non-profit organization