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Quiz: Introduction to Accounting (Ans)

Answers

Here are the answers to the short quiz on Introduction to Accounting. If you are having a hard time with this, feel free to go back to the lessons and summary page.

  1. Which does not form part of the general definition of accounting?
    1. Provides information
    2. Useful in decision making
    3. Primarily concerned with historical data ➝ financial accounting
    4. Processes transactions of financial character
  2. Accounting provides which of the following information?
    1. Qualitative information
    2. Quantitative information
    3. Financial information
    4. All of the above
  3. Accounting is
    1. An art
    2. A science
    3. Both an art and a science
    4. Neither an art nor a science
  4. Which of the following is an economic entity?
    1. A charitable institution
    2. A grocery store
    3. Both A and B
    4. None of the above
  5. The branch of accounting that focuses on the preparation and presentation of financial statements primarily for external users.
    1. Financial accounting
    2. Management accounting
    3. External auditing
    4. Tax accounting
  6. Provides information used internally for planning, evaluating, analyzing, and controlling business decisions and operations.
    1. Internal auditing
    2. Financial accounting
    3. Management accounting
    4. Forensic accounting
  7. They are interested in a company's ability to continue its existence, especially if they are heavily dependent on the company's operations.
    1. Government
    2. Customers
    3. Suppliers
    4. Lenders
  8. The area of practice where CPAs provide accounting services to several clients on a contractual or engagement basis?
    1. Public accounting
    2. Private accounting
    3. Government accounting
    4. Education or academe
  9. Trade creditors are most interested in which accounting information?
    1. Profitability
    2. Adaptability
    3. Liquidity
    4. Ability to continue operations
  10. The basic purpose of accounting is to
    1. Provide information for decision-making
    2. Compute the applicable income tax
    3. Comply with state requirements
    4. Determine the net income of a company
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