MCQ 2 on Accounting for Beginner and Students
Level – Beginner
Results
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#1. Which of the following is not an internal user of financial statements?
Internal User means anyone who is part of business entity. Lenders are external parties to the business.
#2. A liability arises because of which activity?
A purchase that is settled in cash don’t create any liability rather decreases the current asset (Cash). Liability gets created in the books of accounts when purchases are made on credit.
#3. Which one of the following is not a Business Transaction?
Business entity concept clearly distinguish any transaction that is not done for business. Personal transactions must be excluded from the business records, so as to have a true and fair view of business operations and performance.
#4. Transactions are posted into General Ledger from which document/book?
Based on the business transactions, a journal (voucher entry) is created and then posted into the journal book. From Journal book, General Ledger postings are made. In system based accounting. Journal Books are skipped sometimes or generated as summary/detail report of all the journal entries.
#5. The basic function of financial account is to ?
Accounting is a service process that primarily record all the business transactions to track the business performance.
#6. Book keeping is mainly concerned with which of the important process?
Book Keeping is a process to record all the monetary transactions in the books of accounts in order to track and analyze the transactions that affect the business profitability analysis and its operations.
#7. Which is the last step of accounting as a process of information?
Recording, Preparation and Analysis are the intermediary steps in accounting process. Once these processes are completed, the results and summary can be communicated to the relevant stakeholders.
#8. A person who owes money to a firm is known as?
Debtor is the person who is supposed to pay-back to the business entity against purchase of goods or services from the entity.
#9. Which of the following will not be recorded in the books of account ?
Sales/Purchase of goods and Salary payments are the transactions performed in monetary terms and hence must be recorded in the books. Quality of staff is non-monetary term and hence cannot be recorded in the books of accounts.
#10. A person to whom money is owed by a firm against purchase of goods is known as ?
Creditor is supposed to receive money from business against sales made to the firm.