1. Introduction To Financial Accounting - Part 1


25 Questions MCQ Test Financial Accounting | 1. Introduction To Financial Accounting - Part 1


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This mock test of 1. Introduction To Financial Accounting - Part 1 for Finanace & Accounting helps you for every Finanace & Accounting entrance exam. This contains 25 Multiple Choice Questions for Finanace & Accounting 1. Introduction To Financial Accounting - Part 1 (mcq) to study with solutions a complete question bank. The solved questions answers in this 1. Introduction To Financial Accounting - Part 1 quiz give you a good mix of easy questions and tough questions. Finanace & Accounting students definitely take this 1. Introduction To Financial Accounting - Part 1 exercise for a better result in the exam. You can find other 1. Introduction To Financial Accounting - Part 1 extra questions, long questions & short questions for Finanace & Accounting on EduRev as well by searching above.
QUESTION: 1

Identify the areas where Accountants are now capable of working in exciting new growth areas

Solution:

Accountants are now capable of working in exciting new growth areas such as: forensic accounting (solving crimes such as computer hacking and the theft of large amounts of money on the internet); ecommerce (designing web-based payment system); financial planning, environmental accounting, etc.

QUESTION: 2

AICPA stands for 

Solution:

AICPA stands for American Institute of Certified Public Accountants

QUESTION: 3

Which Book is considered as the first book on double-entry bookkeeping

Solution:

Luca Pacioli’s, a Franciscan friar (merchant class), book Summa de Arithmetica, Geometria, Proportion at Proportionality (Summary of arithmetic, geometry, proportions, and proportionality) in Venice (1494) is considered as the first book on double-entry bookkeeping

QUESTION: 4

Which of the following is considered as a financial transaction in relation to Machinery

Solution:

Purchase of machinery, installing and keeping it ready for manufacturing is an event which comprises number of financial transactions such as buying a machine, transportation of machine, site preparation for installation of a machine, expenditure incurred on its installation and trial runs.

QUESTION: 5

Which of the following is/are considered as External Events

Solution:

If an event involves transactions between an outsider and an organisation, these are known as external events. The following are the examples of such transactions:
• Sale of merchandise to the customers.
• Rendering services to the customers by ABC Limited.
• Purchase of materials from suppliers.
• Payment of monthly rent to the landlord.

QUESTION: 6

Which of the following is/are considered as Internal Events

Solution:

An internal event is an economic event that occurs entirely between the internal wings of an enterprise, 
E.g., supply of raw material or components by the stores department to the manufacturing department, payment of wages to the employees, etc.

QUESTION: 7

Identify the item/items which can be recorded in books of account

Solution:

As per Identification Concept, activities are observed and those events are selected that are of considered financial character and relate to the organisation. The business transactions and other economic events therefore are evaluated for deciding whether it has to be recorded in books of account. The value of human resources, changes in managerial policies, or appointment of personnel are important but none of these are recorded in books of account. However, when a company makes a sale or purchase, whether on cash or credit or pays salary it is recorded in the books of account.

However as per Measurement Concept, If an event cannot be quantified in monetary terms, it is not considered for recording in financial accounts. That is why important items like the appointment of a new managing director, signing of contracts or changes in personnel are not shown in the books of accounts.

QUESTION: 8

Identify the usefulness of Accounting Reports

Solution:

The information is regularly communicated through accounting reports. These reports provide information that are useful to a variety of users who have an interest in assessing the financial performance and the position of an enterprise, planning and controlling business activities and making necessary decisions from time to time.

QUESTION: 9

The Accounting Information System should be designed in such a way that the right information is communicated to the _______________________

Solution:

The accounting information system should be designed in such a way that the right information is communicated to the right person at the right time.

QUESTION: 10

Depending upon the needs of the users, Reports can be generated on ___________ basis.

Solution:

Reports can be daily, weekly, monthly, or quarterly, depending upon the needs of the users.

QUESTION: 11

What are the different types of users of Accounting Information

Solution:

Accounting is a means by which necessary financial information about business enterprise is communicated and is also called the language of business. Many users need financial information in order to make important decisions. These users can be divided into two broad categories: internal users and external users. 
Internal users include: Chief Executive, Financial Officer, Vice President, Business Unit Managers, Plant Managers, Store Managers, Line Supervisors, etc. 
External users include: Present and potential Investors (shareholders), Creditors (Banks and other Financial Institutions, Debentureholders and other Lenders), Tax Authorities, Regulatory Agencies (Department of Company Affairs, Registrar of Companies, Securities Exchange Board of India, Labour Unions, Trade Associations, Stock Exchange and Customers, etc.

QUESTION: 12

Who wrote the famous Book Arthashasthra

Solution:

The Arthaśāstra (अर्थशास्त्र) is an ancient Indian Sanskrit treatise on statecraft, economic policy and military strategy book. Kautilya, also identified as Vishnugupta and Chanakya, is traditionally credited as the author of the text/book. Kautilya was a scholar at Takshashila, the teacher and guardian of Emperor Chandragupta Maurya.

QUESTION: 13

Which is considered as India's central bank, which controls the issue and supply of the Indian rupee

Solution:

The Reserve Bank of India (RBI) is India's central bank, which controls the issue and supply of the Indian rupee. RBI is the regulator of the entire Banking in India. RBI plays an important part in the Development Strategy of the Government of India.

QUESTION: 14

Reserve Bank of India is established on

Solution:

RBI commenced its operations on 1 April 1935 in accordance with the Reserve Bank of India Act, 1934.

QUESTION: 15

The ___________________ is an autonomous, statutory body tasked with regulating and promoting the insurance and re-insurance industries in India.

Solution:

The Insurance Regulatory and Development Authority of India is an autonomous, statutory body tasked with regulating and promoting the insurance and re-insurance industries in India. 

QUESTION: 16

Which of the following is a Direct Tax?

Solution:

A direct tax is one that the taxpayer pays directly to the government. These taxes cannot be shifted to any other person or group. E.g. Income Tax, Wealth Tax

An indirect tax is one that can be passed on-or shifted-to another person or group by the person or business that owes it. E.g. GST, Excise Duty, Customs Duty, VAT

QUESTION: 17

Who is the regulator of the securities and commodity market in India?

Solution:

The Securities and Exchange Board of India (SEBI) is the regulator of the securities and commodity market in India owned by the Government of India. It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992

QUESTION: 18

Information in financial reports is based on __________________

Solution:

Information in financial reports is based on Economic Transactions

QUESTION: 19

A ___________ would most likely use an entities financial report to determine whether or not the business entity is eligible for a loan.

Solution:

A Creditor would most likely use an entities financial report to determine whether or not the business entity is eligible for a loan.

QUESTION: 20

The Internet has assisted in decreasing the__________________ in issuing financial reports to users.

Solution:

The Internet has assisted in decreasing the time-gap in issuing financial reports to users.

QUESTION: 21

Information is said to be relevant if it is ________________

Solution:

Information is said to be relevant if it is Free from Bias

QUESTION: 22

The process of accounting starts with ______________ and ends with ______________

Solution:

The process of accounting starts with identifying the transactions and ends with communicating information

QUESTION: 23

Accounting measures the business transactions in terms of _________________ units.

Solution:

Accounting measures the business transactions in terms of monetary units.

QUESTION: 24

Identified and measured economic events should be recorded in ______________ order.

Solution:

Identified and measured economic events should be recording in chronological order.

QUESTION: 25

Which of the following is not the sub-discipline of Accounting

Solution:

The apparently divergent needs of internal and external users of accounting information have resulted in the development of sub-disciplines within the accounting discipline namely, financial accounting, cost accounting and management accounting