Accounting Questions and Answers
accounting quiz 1
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1 The primary purpose of accounting is to determine whether the business entity is profitable or unprofitable in its operations.
A) True
B) False This is the correct answer.
Feedback: The primary purpose of accounting is to provide information that is useful for decision-making purposes. Accounting is 'not an end', but rather it is a 'means to an end.' LO 1
2 Costs, prices, sales volume, profits, and return on investment are all accounting measurements.
A) True This is the correct answer.
B) False
Feedback: A clear understanding of accounting terms and concepts is required of those who have a financial interest in an enterprise if they are to understand and communicate about the enterprise. Accounting is sometimes referred to as the 'language of business.' LO 1
3 The types of accounting information are limited.
A) True
B) False This is the correct answer.
Feedback: There are many types of accounting information, including financial accounting, managerial accounting, and tax accounting.
4 Accountants use the term financial position to describe an entity's activities during the year.
A) True
B) False This is the correct answer.
Feedback: Financial position refers to an entity's financial resources and obligations at one point in time. The term 'results of operations' is used to describe an entity's financial activities during the year.
5 Financial accounting information is designed primarily to assist investors and creditors in deciding where to place their scarce investment resources.
This is the correct answer.
A) True This is the correct answer.
B) False
Feedback: Such decisions are important to society, as they determine which companies and industries will receive the financial resources necessary for growth, and which will not.
6 Management accounting involves the development and interpretation of accounting information intended specifically to aid management in acquiring investment resources.
A) True
B)
[pic]
1 The primary purpose of accounting is to determine whether the business entity is profitable or unprofitable in its operations.
A) True
B) False This is the correct answer.
Feedback: The primary purpose of accounting is to provide information that is useful for decision-making purposes. Accounting is 'not an end', but rather it is a 'means to an end.' LO 1
2 Costs, prices, sales volume, profits, and return on investment are all accounting measurements.
A) True This is the correct answer.
B) False
Feedback: A clear understanding of accounting terms and concepts is required of those who have a financial interest in an enterprise if they are to understand and communicate about the enterprise. Accounting is sometimes referred to as the 'language of business.' LO 1
3 The types of accounting information are limited.
A) True
B) False This is the correct answer.
Feedback: There are many types of accounting information, including financial accounting, managerial accounting, and tax accounting.
4 Accountants use the term financial position to describe an entity's activities during the year.
A) True
B) False This is the correct answer.
Feedback: Financial position refers to an entity's financial resources and obligations at one point in time. The term 'results of operations' is used to describe an entity's financial activities during the year.
5 Financial accounting information is designed primarily to assist investors and creditors in deciding where to place their scarce investment resources.
This is the correct answer.
A) True This is the correct answer.
B) False
Feedback: Such decisions are important to society, as they determine which companies and industries will receive the financial resources necessary for growth, and which will not.
6 Management accounting involves the development and interpretation of accounting information intended specifically to aid management in acquiring investment resources.
A) True
B)