Financial Accounting_6

#1. Which of the following is the primary objective of accounting?

a) Recording financial transactions

b) Providing employment

c) Reducing expenses

d) Increasing sales

#2. Accounting is also known as the __________ of business.

a) Brain

b) Backbone

c) Language

d) Future

#3. Which of the following is NOT a branch of accounting?

a) Financial Accounting

b) Cost Accounting

c) Management Accounting

d) Production Accounting

#4. The scope of accounting includes:

a) Recording transactions

b) Classifying financial data

c) Summarizing and interpreting financial information

d) All of the above

#5. The users of accounting information include:

a) Investors

b) Creditors

c) Government agencies

d) All of the above

#6. Financial accounting mainly focuses on:

a) Internal reporting

b) External reporting

c) Decision-making

d) Future predictions

#7. Accounting principles are generally based on:

a) Business needs

b) Government regulations

c) Commonly accepted practices

d) Theories and assumptions

#8. The scope of accounting does NOT include:

a) Planning financial policies

b) Recording non-financial transactions

c) Cost control

d) Decision-making

#9. The term “Accounting Entity” means:

a) Business is separate from its owner

b) Business and owner are the same

c) Business only records physical assets

d) Business is not responsible for its liabilities

#10. The main function of financial accounting is to:

a) Maintain records

b) Prepare financial statements

c) Measure financial performance

d) All of the above

#11. The nature of accounting is:

a) Legal

b) Historical and analytical

c) Futuristic

d) None of these

#12. Which of the following best describes the scope of accounting?

a) Recording only business transactions

b) Preparing only financial statements

c) Recording, classifying, summarizing, and interpreting financial data

d) Checking arithmetical accuracy only

#13. Which of the following functions is not part of accounting?

a) Forecasting future profitability

b) Recording transactions

c) Interpreting financial data

d) Communicating results to users

#14. Accounting provides information primarily to:

a) Only owners

b) Only creditors

c) Only government

d) Various internal and external users

#15. The scope of accounting includes all of the following except:

a) Cost Accounting

b) Financial Accounting

c) Bookkeeping only

d) Management Accounting

#16. Financial accounting mainly deals with:

a) Internal decision-making

b) Cash management

c) Preparation of financial statements for external users

d) Government audits

#17. Which of the following is a limitation of accounting?

a) It is based on estimates

b) It helps in decision making

c) It follows a systematic process

d) It records only monetary transactions

#18. Who are the primary users of financial accounting information?

a) Shareholders

b) Lenders

c) Management

d) All of the above

#19. Which feature distinguishes accounting from bookkeeping?

a) Summarizing and interpreting financial data

b) Preparing trial balance

c) Recording daily transactions

d) Posting to ledger accounts

#20. Which of the following is not an objective of accounting?

a) Recording financial transactions

b) Showing results of operations

c) Estimating product demand

d) Ensuring accountability

Financial Accounting_6

Nature and Scope of Accounting

Results

#1. Which of the following is the primary objective of accounting?

#2. Accounting is also known as the __________ of business.

#3. Which of the following is NOT a branch of accounting?

#4. The scope of accounting includes:

#5. The users of accounting information include:

#6. Financial accounting mainly focuses on:

#7. Accounting principles are generally based on:

#8. The scope of accounting does NOT include:

#9. The term “Accounting Entity” means:

#10. The main function of financial accounting is to:

#11. The nature of accounting is:

#12. Which of the following best describes the scope of accounting?

#13. Which of the following functions is not part of accounting?

#14. Accounting provides information primarily to:

#15. The scope of accounting includes all of the following except:

#16. Financial accounting mainly deals with:

#17. Which of the following is a limitation of accounting?

#18. Who are the primary users of financial accounting information?

#19. Which feature distinguishes accounting from bookkeeping?

#20. Which of the following is not an objective of accounting?