WorksheetsAccounts revision
Total questions: 36
Worksheet time: 3hrs 0mins
Accounting is
recording anything that happens in the business
recording the business transactions
recording, analyzing and interpreting the business transactions
recording, summarizing, analyzing and interpreting the business transactions
The recording of transactions in the accounting books of a business is called :
accounting
book-keeping
liabilities
resources
The purposes of preparing accounting documents and financial statements are to:
I. show information of the resources of the business
II. show who has claims on the business resources
III. help users of financial information make decisions about the business
I and II
I and III
II and III
I, II and III
All businesses are started with the aim of making ...
Capital
sound investments on the stock market
A profit
their owners popular
Which list represents both internal and external users of accounting information?
Banks, government and investors
Creditors, government and managers
Creditors, banks and investors
Suppliers, investors and banks
Why is accounting necessary in an organization?
It is required by law
To help the government
To report on financial data
To have enough employees
Which of these are books of original entry?
sales day book
purchases day book
petty cash book
all of the above
Accounting is the process that involves
revealing how much money is in the bank
budgeting what will be spent only
reporting to stakeholders about potential profits
preparing/presenting, analysing and interpreting financial statements
Two common financial statements prepared are the
Trading and Profit and Loss Account and Balance Sheet
Balance Sheet and Suspense Account
Cash Book and Trading and Profit andLoss Account
Control Account and Balance Sheet
Sole Traders
do not ever employ others
are liable for all business losses/debts and benefit from all profits
are selfish and unable to get along with others
are primarily involved in street vending
Limited Companies
are owned by the government
can be private or public
are separate legal entities and can sue and be sued
limit the liability of shareholders to the same amount for each shareholder
What is a balance sheet?
A final account
A snapshot of the business' financial position of at a particular point in time.
It shows the business' assets, liabilities and capital
Non-Profit organisations (Choose all that apply)
include clubs and associations
are formed for the benefit of their members
are formed with the intention of making a profit.
prepare Income and Expenditure Accounts
How many books of original entries are there?
5
6
4
7
It is a financial statement that reports the assets, liabilities, and equity of a company on a given date.
Statement of Income
Statement of Financial Position
Statement of Cash Flow
Statement of Changes in Equity
This concept assumes that, for accounting purposes, the business enterprise and its owners are two separate independent entities
Money Measurement Concept
Going Concern Concept
Business Entity Concept
Cost Concept
If all the business transactions are expressed in monetary terms, it will be easy to understand the accounts prepared by the business enterprise.
Business Entity Concept
Revenue Recognition Concept
Money Measurement Concept
Going Concern Concept
This concept states that a business firm will continue to carry on its activities for an indefinite period of time.
Money Measurement Concept
Historical Cost Concept
Going Concern Concept
Dual Aspect Concept
It helps in calculating tax on business income calculated for a particular time period.
Dual Aspect Concept
Revenue Recognition Concept
Accounting Period Concept
Going Concern Concept
This concept requires asset to be shown at the price it has been acquired, which can be verified from the supporting documents.
Historical Cost Concept
Accounting Period Concept
Revenue Recognition Concept
Matching Concept
It helps in knowing actual expenses and actual income during a particular time period.
Matching Concept
Accrual Concept
Revenue Recognition Concept
Cost Concept
It guides how the expenses should be matched with revenue for determining exact profit or loss for a particular period.
Accrual Concept
Matching Concept
Revenue Recognition Concept
Going Concern Concept
It is very helpful for the investors/shareholders to know the exact amount of profit or loss of the business.
Business Entity Concept
Matching Concept
Revenue Recognition Concept
Historical Cost Concept
According to this convention the accounting practices should remain unchanged from one period to another.
Convention of Consistency
Convention of Full disclosure
Convention of Conservatism
Convention of Materiality
It takes into consideration all prospective losses but leaves all prospective profits
Convention of Conservatism
Convention of consistency
Convention of Full Disclosure
Convention of Materiality
As per this concept, all accounting must be based on objective evidence. In other words, the transactions recorded should be supported by verifiable documents.
Matching Concept
Dual Aspect Concept
Verifibility and Objectivity Concept
Realisation Concept
It is because of this concept that fixed assets are recorded at their original cost and depreciation in a systematic manner without reference to their current realizable value.
Going Concern Concept
Realisation Concept
Historical Concept Concept
Money Measurement Concept
A company's senior and middle management use accounting information to:
make buy, sell or keep decisions related to shares.
run the business
determine a company's profitability and profit sharing
utilize accounting information to make lending decisions
Employees use accounting information to
run the business
make lending decisions
determine a company's profitability and profit sharing
decide which products to buy from which companies
Who utilize accounting information to make lending decisions :
Investors
Customers
Creditors
Employees
who may need accounting information to decide which products to buy from which companies:
Investors
Creditors
Customers
Company's owner
Why the employees need the accounting information?
To lend money
To request wage increase and other benefits
To make sure the company can setle debts
Who may need accounting information to decide whether to put money on a particular company?
Investors
Creditors
Customers
Suppliers
To show how successfully your business performed during a period, you would report its revenues and expenses in the
balance sheet.
statement of cash flows
income statement
retained earnings statement
.Which of the following financial statements reflect the operating performance of the company?
income statement
statement of changes in equity
balance sheet
cash flow statement
The primary purpose of the statement of cash flows is to
provides information about the investing and financing activities during a period.
prove that revenues exceed expenses if there is a net income.
provides information about the cash receipts and cash payments during a period.
facilitate banking relationships.
