Introduction to Accounting – Multiple Choice Questions (MCQs)

Which of the following best defines accounting?

• The art of recording, classifying, and summarizing financial transactions

• The science of preparing tax returns

• The system of managing human resources

• The process of controlling production

The primary objective of accounting is to:

• Record non-financial transactions

• Provide financial information to users

• Measure employee performance

• Control stock levels

Which of the following is not a branch of accounting?

• Financial Accounting

• Cost Accounting

• Management Accounting

• Engineering Accounting

The person who records business transactions is known as a:

• Manager

• Accountant

• Cashier

• Clerk

The main purpose of financial accounting is to:

• Provide information for internal decision-making

• Provide information to external users

• Forecast future trends

• Manage employee records

Which of the following users of accounting information is external to the business?

• Management

• Employees

• Investors

• Department heads

Bookkeeping is primarily concerned with:

• Interpreting financial data

• Recording financial transactions

• Preparing budgets

• Managing business strategy

The process of transferring journal entries to ledger accounts is called:

• Journalizing

• Posting

• Balancing

• Summarizing

Which of the following is a real account?

• Rent Account

• Cash Account

Which financial statement shows the financial position of a business at a specific date?

• Income Statement

• Trial Balance

• Balance Sheet

• Cash Flow Statement