Foundation: Basic
Business & Accounting
2026-VERSION WITH
QUALITY QUESTIONS
AND VERIFIED
ANSWERS 100%
CORRECT.
1. What is the primary objective of a
business?
,A. To increase government revenue
B. To maximize profit
C. To reduce competition
D. To avoid taxation
Answer: B. To maximize profit
Rationale: Businesses primarily aim to
earn profit while sustaining operations.
2. Which of the following is NOT a form
of business ownership?
A. Sole proprietorship
B. Partnership
C. Corporation
D. Inflation
,Answer: D. Inflation
Rationale: Inflation is an economic
concept, not a business structure.
3. Accounting is best defined as:
A. Recording financial transactions
B. Producing goods
C. Hiring employees
D. Marketing products
Answer: A. Recording financial
transactions
Rationale: Accounting involves recording,
classifying, and summarizing financial
data.
, 4. The accounting equation is:
A. Assets = Liabilities + Equity
B. Revenue = Expenses + Profit
C. Cash = Sales + Purchases
D. Assets = Income - Expenses
Answer: A. Assets = Liabilities + Equity
Rationale: This is the fundamental
equation in accounting.
5. Which financial statement shows
profit or loss?
A. Balance Sheet
B. Cash Flow Statement
C. Income Statement
D. Trial Balance
Business & Accounting
2026-VERSION WITH
QUALITY QUESTIONS
AND VERIFIED
ANSWERS 100%
CORRECT.
1. What is the primary objective of a
business?
,A. To increase government revenue
B. To maximize profit
C. To reduce competition
D. To avoid taxation
Answer: B. To maximize profit
Rationale: Businesses primarily aim to
earn profit while sustaining operations.
2. Which of the following is NOT a form
of business ownership?
A. Sole proprietorship
B. Partnership
C. Corporation
D. Inflation
,Answer: D. Inflation
Rationale: Inflation is an economic
concept, not a business structure.
3. Accounting is best defined as:
A. Recording financial transactions
B. Producing goods
C. Hiring employees
D. Marketing products
Answer: A. Recording financial
transactions
Rationale: Accounting involves recording,
classifying, and summarizing financial
data.
, 4. The accounting equation is:
A. Assets = Liabilities + Equity
B. Revenue = Expenses + Profit
C. Cash = Sales + Purchases
D. Assets = Income - Expenses
Answer: A. Assets = Liabilities + Equity
Rationale: This is the fundamental
equation in accounting.
5. Which financial statement shows
profit or loss?
A. Balance Sheet
B. Cash Flow Statement
C. Income Statement
D. Trial Balance
