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Accounting questions with actual answers.
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Accounting questions with actual answers.
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Accounting questions with actualanswers.
The feature that is not a characteristic of a company is:
a. less government regulation than other types of entities.
b. limited liability.
c. legal entity.
d. perpetual life. ANS - A
Which type of business organization issues shares?
a. Companies
b. Sole proprietorships
c. All of the options issue shares
d. Partnerships ANS - A
Financial accounting reports concentrate on:
a. current and future events
b. current events
c. past events
d. future events ANS - C
Generally Accepted Accounting Principles
a. Are only useful when interpreting financial statements of foreign companies
,b. Allow external users to confidently use information in financial statements to make decisions
c. Is a valuation techinque first developed by the GAP stores
d. Guide sole traders on how to account for and disclose financial statement items ANS - B
The difference between management and financial accounting is:
a. Management accounting focuses on internal users, whereas financial accounting focuses on external
users.
b. Management accounting focuses on external users, whereas financial accounting focuses on internal
users.
c. Management accounting focuses on the reporting function, whereas financial accounting focuses on
the control function.
d. Management accounting focuses only on the control function, whereas financial accounting focuses
on the reporting function. ANS - A
In lending to a large firm a financial institution will be most concerned about the firms expected:
a. Profitability and solvency
b. Profitability, cash flow prospects, and solvency
c. Profitability
d. Availability of funds to make repayments ANS - A
The change that will increase owners' equity is:
a. earning a profit for the year.
b. a loss incurred for the year.
c. a company buying back its own shares.
d. payment of a dividend by a company to its shareholders. ANS - A
The best description of the primary purposes of providing accounting information is:
, a. to calculate the bank account balance.
b. to assist users in making informed decisions.
c. to allow the preparation of a taxation return.
d. to enable the financial statements to be prepared. ANS - B
The primary concern of creditors and investors is:
a. both of the options given
b. return.
c. risk. ANS - A
A unique aspect of a company:
a. is that it is a separate legal entity apart from the owners.
b. is that it is a simpler form of business organization than sole proprietorships or partnerships.
c. is that it can only have one owner.
d. is that by their nature they do less volume of business than sole proprietorships. ANS - A
Which of the following is false regarding partnerships?
a. Should have a partnership agreement.
b. Two or more owners.
c. Have limited liability
d. A medical practice can be formed as a partnership. ANS - C
Which of the following reports is not an example of financial accounting?
a. Balance Sheet
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