Financial Accounting_5

#1. Financial accounting provides information to which type of users?

a) Internal users only

b) External users only

c) Both internal and external users

d) Government authorities only

#2. Which financial statement shows the financial position of a business at a given date?

a) Income Statement

b) Cash Flow Statement

c) Balance Sheet

d) Profit & Loss Account

#3. Which accounting principle states that transactions should be recorded at their original cost?

a) Accrual Principle

b) Cost Principle

c) Revenue Recognition Principle

d) Matching Principle

#4. Financial accounting does NOT deal with

a) Recording transactions

b) Preparing financial statements

c) Future forecasting

d) Reporting financial results

#5. Which concept requires recognizing expenses in the same period as related revenue?

a) Going Concern Concept

b) Matching Concept

c) Accrual Concept

d) Money Measurement Concept

#6. Which accounting standard ensures that companies follow uniform financial reporting?

a) IFRS

b) ASME

c) ISO

d) GAAP

#7. Which of the following is NOT a characteristic of financial accounting?

a) Objectivity

b) Historical nature

c) Future predictions

d) Consistency

#8. What is the main focus of financial statements?

a) Past transactions

b) Future growth

c) Internal business control

d) Employee satisfaction

#9. Which assumption states that a business is separate from its owner?

a) Dual aspect concept

b) Business entity concept

c) Accrual concept

d) Matching concept

#10. Which financial statement provides details of revenue and expenses?

a) Income Statement

b) Balance Sheet

c) Cash Flow Statement

d) Trial Balance

#11. Why is consistency important in financial accounting?

a) To ensure comparability of financial statements

b) To increase profit

c) To maximize tax benefits

d) To manipulate financial data

#12. Which of the following users rely on financial statements for investment decisions?

a) Suppliers

b) Investors

c) Government

d) Employees

#13. The primary role of financial accounting is to provide information about

a) Market trends

b) Company profitability and financial position

c) Consumer preferences

d) Employee satisfaction

#14. Which accounting principle ensures all relevant financial information is disclosed?

a) Full Disclosure Principle

b) Going Concern Concept

c) Cost Concept

d) Consistency Concept

#15. Which type of accounting focuses on providing information for external stakeholders?

a) Cost Accounting

b) Financial Accounting

c) Management Accounting

d) Forensic Accounting