Tag: accounting equation and business transactions

Questions Related to accounting equation and business transactions

The financial statements consist of _______________.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. Trial balance

  2. Profit and loss account

  3. Balance sheet

  4. Both (i) and (iii)

  5. Both (ii) and (iii)

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Correct Option: E
Explanation:

At the end of every financial year, books of account of the business are closed and financial statements are prepared. Financial statements are prepared to know the profitability of the organization for a particular period and also to know the financial position of the business on a particular date. 


Financial statements consist of:
Profit and Loss Account
Balance Sheet.

Most financial advisors are registered with the Securities and Exchange Commission as ____________.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. registered representatives

  2. registered investor advisors

  3. registered financial planners

  4. registered securities consultants

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Correct Option: C

Which International Monetary Organization funded North East Rural Livelihood Project (NERLP) in the four states of Mizoram, Nagaland, Sikkim and Tripura?

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. IMF

  2. ODA

  3. World Bank

  4. USAID

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Correct Option: C

A group of European countries have formed a union and created a common currency known as _________.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. the EU currency

  2. the European Union

  3. the EMU

  4. the Euro

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Correct Option: D

Consider the following fundamental assumptions:
1. Prudence       2. Going concern
3. Accrual          4. Consistency
As per Accounting Standard -1, which of these assumptions are taken into consideration while preparing financial statements?

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. 1 and 4

  2. 2 and 3

  3. 1, 2, 3 and 4

  4. 2, 3 and 4

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Correct Option: D

The purpose of preparing final accounts is to ascertain ________.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. Profit or loss

  2. Capital

  3. The value of assets

  4. Profit or loss and financial position

Show answer
Correct Option: D
Explanation:

The accounts which are prepared at the final stage of the accounting cycle to know the profit or loss and financial position of a business concern are called Final Accounts.Every businessman enters into business activities to earn profit. It is the accounting that shows profit or loss of a business concern. The role of accounting is to compile the financial record of a business in such a manner that yields the profit or loss of the business.

Final accounts include preparation of_______.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. Trading A/c

  2. Profit & Loss A/c

  3. Balance Sheet

  4. All of the above

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Correct Option: D

Which one of the following would not be included in a full set of company financial statements?

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. The cash budget

  2. The statement of financial position

  3. The statement of changes in equity

  4. The income statement

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Correct Option: A

Net profit is computed in which of the following?

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. Balance sheet

  2. Income statement

  3. Cash flow statement

  4. Statement of changes in equity

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Correct Option: B

Financial statements differ from management account because ___________.

book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

  1. the are mainly prepared for external users of financial information

  2. they are more complex and hard to prepare

  3. the are the summary of accounting data

  4. the are prepared on basis of actual concept

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Correct Option: A