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B Com Exam  >  B Com Tests  >  Test: Accounting Process, Principles & Rules - B Com MCQ

Test: Accounting Process, Principles & Rules - B Com MCQ


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20 Questions MCQ Test - Test: Accounting Process, Principles & Rules

Test: Accounting Process, Principles & Rules for B Com 2024 is part of B Com preparation. The Test: Accounting Process, Principles & Rules questions and answers have been prepared according to the B Com exam syllabus.The Test: Accounting Process, Principles & Rules MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting Process, Principles & Rules below.
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Test: Accounting Process, Principles & Rules - Question 1
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The accounting process involves recording:

Detailed Solution for Test: Accounting Process, Principles & Rules - Question 1
The accounting process involves recording events that can be measured in monetary terms. These are quantifiable economic events, such as transactions involving cash, sales, purchases, etc.
Test: Accounting Process, Principles & Rules - Question 2
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In accounting, an economic event is referred to as:

Detailed Solution for Test: Accounting Process, Principles & Rules - Question 2
An economic event in accounting is referred to as a transaction. Transactions are events that affect the financial position of the business and are recorded in the books of accounts.
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Test: Accounting Process, Principles & Rules - Question 3
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Identify the correct sequence of the accounting process:

Detailed Solution for Test: Accounting Process, Principles & Rules - Question 3
The correct sequence of the accounting process starts with identifying economic events, then recording them in the books, and finally communicating the financial information through financial statements.
Test: Accounting Process, Principles & Rules - Question 4
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Bookkeeping mainly concerns which part of the accounting process?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 4
Bookkeeping is primarily concerned with the recording of financial information. It involves keeping a systematic record of financial transactions.
Test: Accounting Process, Principles & Rules - Question 5
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Financial accounting provides financial information to all of the following external users except:
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 5
Managers are considered internal users of financial information as they use this data to make business decisions. External users include government agencies, investors, and creditors.
Test: Accounting Process, Principles & Rules - Question 6
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For which step of the accounting process do accountants of a business entity prepare financial statements?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 6
Accountants prepare financial statements to communicate financial information. This is a crucial step as it involves presenting financial data to external users like investors and creditors.
Test: Accounting Process, Principles & Rules - Question 7
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Keeping a log of financial information in books of original entries is called:
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 7
The process of recording financial transactions in the books of original entries, such as journals, is known as recording.
Test: Accounting Process, Principles & Rules - Question 8
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Auditing is:
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 8
Auditing involves examining financial statements to ensure their accuracy and compliance with accounting standards and regulations.
Test: Accounting Process, Principles & Rules - Question 9
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Which of the following is an external user of financial statements?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 9
Creditors are external users of financial statements as they use the financial data to assess the creditworthiness and financial health of a business.
Test: Accounting Process, Principles & Rules - Question 10
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_________ is the first phase of the accounting cycle.
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 10
The first phase of the accounting cycle is identifying an economic event or transaction that needs to be recorded in the books.
Test: Accounting Process, Principles & Rules - Question 11
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Which of the following is an internal user of financial statements?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 11
Managers are internal users as they need detailed financial information to make strategic and operational decisions for the business.
Test: Accounting Process, Principles & Rules - Question 12
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Financial statements differ from management accounts because:
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 12
Financial statements are prepared mainly for external users, such as investors, creditors, and government agencies, to provide a clear picture of the financial health of the business.
Test: Accounting Process, Principles & Rules - Question 13
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_________ is a separate legal entity where total capital can be divided into many shares.
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 13
A company is a separate legal entity where the total capital is divided into shares, and shareholders own these shares.
Test: Accounting Process, Principles & Rules - Question 14
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An asset possesses which of the following?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 14
An asset is a resource controlled by the business that is expected to provide future economic benefits.
Test: Accounting Process, Principles & Rules - Question 15
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Liabilities are which of the following?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 15
Liabilities are obligations that the business needs to settle in the future, such as loans, accounts payable, etc.
Test: Accounting Process, Principles & Rules - Question 16
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_________ is the gross inflow of economic benefits.
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 16
Income is the gross inflow of economic benefits that increase equity, excluding contributions from owners.
Test: Accounting Process, Principles & Rules - Question 17
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Liabilities arise from which of the following events?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 17
Liabilities arise from past events, creating present obligations that the business is required to settle in the future.
Test: Accounting Process, Principles & Rules - Question 18
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An asset must be _______ by the business to be shown as an asset in its balance sheet.
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 18
An asset must be controlled by the business to be shown as an asset in its balance sheet, ensuring the business has the rights to future economic benefits.
Test: Accounting Process, Principles & Rules - Question 19
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The gross decrease in economic benefits for the business is what?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 19
Expenses represent the gross decrease in economic benefits, reducing equity through outflows or depletion of assets.
Test: Accounting Process, Principles & Rules - Question 20
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Which of the following can be considered the most important phase of the accounting cycle and is the primary objective of financial accounting?
Detailed Solution for Test: Accounting Process, Principles & Rules - Question 20
Preparing financial statements is the most important phase of the accounting cycle as it provides a summary of the financial performance and position of the business, fulfilling the primary objective of financial accounting.
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