Accounting Multiple-Choice Practice Questions: Comprehensive Exam Review, Answers & Detailed Explanations.

Accounting Multiple-Choice Practice Questions:
Comprehensive Exam Review, Answers & Detailed
Explanations.



Which type of business organisation is Sole proprietorships
easiest to establish?


b.Companies
c.Partnerships
d.Sole proprietorships



Which of the following is false about sole Ownership form represented by stock certificates.
proprietorships?


a.One owner.
b.Usually small in size due to limited
resources.
c.Ownership form represented by stock
certificates.
d.Easy to set up

,Management accounting information: can be tailored to the needs of the internal user.


a.
is a one size fits all approach to reporting
business results.
b.
follows GAAP in the reporting
process. c.
can be tailored to the needs of the internal
user.
d.
helps shareholders make decisions.



Generally Accepted Accounting Principles Allow external users to confidently use information in financial
statements to make decisions
a. Allow external users to
confidently use information in financial
statements to make decisions
b. Is a valuation techinque first
developed by the GAP stores
c. Guide sole traders on how to
account for and disclose financial
statement items
d. Are only useful when interpreting
financial statements of foreign
companies

Financial Accounting provides information c. Whether the business has made a profit
that allows users to assess:


a.
Whether budget targets have been met
b.
Whether the correct selling prices are
allocated to products
c.
Whether the business has made a profit
d.
How departments and divisions have
performed



Which of the following summarises a a.
business' financial position on a given date? Balance sheet
Select one:
a.
Balance sheet
b.
Cash flow statement
c.
Budget
d.
Income statement

,Which statement is correct? b.
Select one: Financial reports reflect past performance whereas
a. management reports are concerned with the future as well
as Financial reports provide more forecast data the past.
than management reports.
b.
Financial reports reflect past performance
whereas management reports are
concerned with the future as well as the
past.
c.
Financial reports are prepared for internal
users whereas management reports are
prepared for external
users. d.
Financial reports are produced at more
frequent intervals than management reports.



The group of users that is most likely to d.
require accounting information to assess the
lenders.
ability of a business to pay interest and
repay a loan is:
Select one:
a.
taxation department.
b.
employees.
c.
customers.
d.
lenders.

The primary concern of creditors and c. both
options investors is:
Select one:
a.
risk.
b.
return.
c.
both of the options given

, The section of a business plan which c.
includes a description of the relationships Operating
plan between the business, its suppliers and its
customers is called the:
Select one:
a.
Environmental management plan
b.
Marketing plan
c.
Operating plan
d.
Financial plan



Liabilities include all of the following, a.Accounts receivable.
except:
Select one:
a. Accounts receivable.
b. All of the other options are
examples of liabilities.
c. Wages payable.
d. Salaries payable.



Which of the following best describes an d.A sales transaction is recorded on the sales
invoice. application of a source document?
Select one:
a. Property is exchanged with
another company for services
received.
b. An owner uses their personal
checking account to buy milk at the
grocery store.
c. A transaction is recorded based
on the dollars exchanged at the time
of the
transaction.
d. A sales transaction is recorded
on the sales invoice.
e. Transactions are valued in terms
of the currency of the company's
country.

Historic cost refers to: c.
Select one: the acquisition cost of an item.
a.
the cost of selling an
item. b.
the cost to replace an item
c.
the acquisition cost of an item.
d.
economic value.