Financial Accounting_1

#1. Which financial statement provides information on a company’s profitability?

a) Balance Sheet

b) Cash Flow Statement

c) Profit & Loss Account

d) Notes to Accounts

#2. What is Financial Accounting primarily concerned with?

a) Internal decision-making

b) Recording and reporting financial transactions

c) Managing employees

d) Conducting market research

#3. The process of entering financial transactions in books of accounts is called:

a) Classifying

b) Recording

c) Summarizing

d) Communicating

#4. Which of the following statements about Financial Accounting is TRUE?

a) It focuses only on cash transactions

b) It helps in tracking financial health through statements

c) It does not follow any standard principles

d) It is not required for business operations

#5. Which of the following is NOT a feature of Financial Accounting?

a) Systematic recording of transactions

b) Future planning and budgeting

c) Preparation of financial statements

d) Communication of financial information

#6. Classifying transactions in appropriate accounts is done in which book?

a) Journal

b) Ledger

c) Cash Flow Statement

d) Trial Balance

#7. What is the first step in Financial Accounting?

a) Summarizing transactions

b) Identifying financial transactions

c) Preparing financial statements

d) Communicating reports to stakeholders

#8. Financial Accounting provides financial information mainly for:

a) Internal management

b) External stakeholders like investors and creditors

c) Employees only

d) Marketing teams

#9. Financial Accounting ensures:

a) Compliance with tax laws

b) Accurate and transparent financial reporting

c) Maximization of employee salaries

d) Reduction in production costs

#10. Financial Accounting follows which set of standardized principles?

a) GAAP and IFRS

b) Marketing strategies

c) Human resource policies

d) Taxation laws only