accounting quiz 1
1 The primary purpose of accounting is always to determine if the business entity is lucrative or unprofitable in its procedures.
A) The case
B) Phony This is the accurate answer.
Opinions: The primary aim of accounting is usually to provide info that is useful for decision-making reasons. Accounting is 'not an end', but instead it is a 'means to an end. ' LO 1 a couple of Costs, prices, sales quantity, profits, and return on investment are typical accounting measurements.
A) The case This is the correct answer.
Reviews: A clear comprehension of accounting terms and principles is required of these who have economic interest in an enterprise if they happen to be to understand and communicate regarding the business. Accounting is usually referred to as the 'language of business. ' LO 1 3 The types of accounting data are limited.
B) Bogus This is the accurate answer.
Responses: There are many types of accounting information, which includes financial accounting, managerial accounting, and duty accounting. some Accountants utilize the term budget to describe a great entity's activities during the year.
B) False This is the correct solution.
Feedback: Budget refers to a great entity's financial resources and commitments at one particular point in time. The definition of 'results of operations' can be used to describe an entity's financial activities during the year. 5 Monetary accounting info is designed mostly to assist buyers and credit card companies in choosing where to place their hard to find investment resources. This is the accurate answer.
A) True This is actually the correct response.
Feedback: This kind of decisions are very important to contemporary society, as they identify which corporations and sectors will receive the financial resources essential for growth, and which will not. 6 Managing accounting involves the development and interpretation of accounting data intended specifically for aid administration in acquiring expense resources.
B) False This is actually the correct solution.
Feedback: Supervision accounting involves the development and interpretation of accounting data intended specifically for aid management in working the business. Management accounting info is used in virtually all types of managerial decisions. six The most difficult aspect of tax accounting is in the preparation of the numerous forms required for an entity's tax go back.
B) Bogus This is the accurate answer.
Feedback: Tax planning is the most tough aspect of taxes accounting. The fields of economic, management, and tax accounting are strongly related. Decisions affecting monetary and/or managing accounting will likely have an influence on duty accounting. almost 8 An accounting system contains personnel, methods, devices, and records used by an organization to build up accounting information and to communicate this information to decision producers.
A) Authentic This is the appropriate answer.
Reviews: The design and capabilities of accounting devices vary tremendously from one business to the next, however in every circumstance the basic reason for the accounting system remains to be the same: to satisfy the organization's needs to get accounting information as successfully as possible. 9 The cost of producing the types of accounting reports needed by law is always cost-effective.
B) False This is actually the correct response.
Feedback: Accounting systems ought to be cost-effective. The cost of the information made should surpass the cost of generating it. The price tag on producing accounting reports required by law is not always budget-friendly since the data is never of value to the entity. 12 External users of financial accounting information are identical users of management accounting information.
B) False This can be the correct response.
Feedback: Managing accounting info is usually not available to exterior users. Exterior users of economic accounting information include owners, creditors,...
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