PracticeMultiplechoice

PracticeMultiplechoice - PRACTICE MULTIPLE CHOICE QUESTIONS...

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PRACTICE MULTIPLE CHOICE QUESTIONS 1. Communication of economic events is the part of the accounting process that involves a. identifying economic events. b. quantifying transactions into dollars and cents. c. preparing accounting reports. d. recording and classifying information. Answer: c 2. The accounting process is correctly sequenced as a. identification, communication, recording. b. recording, communication, identification. c. identification, recording, communication. d. communication, recording, identification. Answer: c 3. Which of these is an internal user of accounting data? a. The CEO of a company. b. Clerical staff of a company. c. Salepersons of a company. d. All of the above. Answer: d 1
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4. Generally accepted accounting principles are a. income tax regulations of the Taxation Department. b. standards that indicate how to report economic events. c. theories that are based on physical laws. d. principles that have been proven correct by academic researchers. Answer: b 5. An organisation that is working toward uniformity in accounting practices throughout the world is the a. World Bank b. United Nations. c. International Accounting Standards Board. d. RSPCA Answer: c 6. Which of these statements is not an objective of financial reporting, as set out in the Framework? a. To provide information useful for a wide range of users making economic decisions. b. To provide information that is consistent across all accounting entities. c. To provide information about the financial position, financial performance and cash flows of an entity d. To provide information that shows the results of the stewardship and accountability of management for the resources entrusted to them. Answer: b 7. Acceptance of the going concern assumption gives credibility to the a. historical cost principle. b. reliability principle. c. monetary unit assumption d. full disclosure principle. Answer: a 2
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8. In order for accounting information to be relevant, it must a. have very little cost. b. have predictive or feedback value. c. be reported to the public. d. be used by a lot of different firms. Answer: b 9. The proprietorship form of business organisation a. must have at least two owners . b. means that the owner is personally liable for business debts. c. has an indefinite life. d. is characterised by a legal distinction between the business as an economic unit and the owner. Answer: b 10. Which of these rules is incorrect? a. Credits decrease the drawing account. b. Debits increase the capital account. c. Credits increase revenue accounts. d. Debits decrease liability accounts. Answer: b 11. Which of the following correctly identifies the normal balances of accounts? a. Assets Debit Liabilities Credit Owner's Equity Credit Revenue Debit Expenses Credit 3
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b. Assets Debit Liabilities Credit Owner's Equity Credit Revenue Credit Expenses Credit c. Assets Credit Liabilities Debit Owner's Equity Debit Revenue Credit Expenses Debit d. Assets Debit Liabilities Credit Owner's Equity
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PracticeMultiplechoice - PRACTICE MULTIPLE CHOICE QUESTIONS...

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