Multiple choice: 1. Which of the following statements regarding accounting is incorrect? A. All business transactions and events are recorded in the accounting books. B. Although bookkeeping and accounting are interrelated, they are not the same. C. A transaction or event is recorded in the accounting records only if it has an effect on the assets, liabilities, equity, income or expenses of the business. D. The purpose of accounting is to provide information that is useful in making economic decisions. 2. Sales revenue minus sales returns and allowances and sales discounts equals: A. Net sales B. Income from operations C. Gross margin D. Cost of goods sold

List the three basic questions that must be answered when analyzing the effects of a business transaction on the accounting equation.

The basic function of financial accounting is to Select one: a. Interpret financial data b. Record all business transactions c. No correct answer d. Assist the management in performing functions effectively         Accounting is also defined as an "Information System" because? Select one: a. The function of accounting is to provide quantitative information, primarily financial in nature about economic entities. b. All of the answers are correct c. Accounting provides required information for anyone seeking it d. It is a system which provide information         Public accounting, as a sub-discipline of accounting, includes: Select one: a. Internal auditing b. Management accounting c. Management advisory services d. Cost accounting

Simply explain the recording process and the accounting equation to someone who has no accounting experience. Give your opinion on the elements or areas that might cause the most confusion or be the most difficult to grasp. Accounting equation: The equation between assets, liabilities, and owner's equity of a company is referred to as the accounting equation. According to this equation, assets must be equal to the sum of liabilities and owner's equity.

Which one of the following characteristics of accounting information is related to Objectivity? O a. The accounting information presented is truthful. Ob. The stable accounting treatment of similar transactions. OC. The accounting information must assist the users for making decision. Od. The accounting information is prepared and reported in a neutral way.

Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate accounting alternatives. The FASB statement on qualitative characteristics of accounting information examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information. Instructions a.    Describe briefly the following characteristics of useful accounting information. 1.    Relevance. 2.    Faithful representation. 3.    Understandability. 4.    Comparability. 5.    Consistency. b.    For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other. 1.    Relevance and faithful representation. 2.…

Which of the following is not a major challenge facing the accounting profession?   a. Nonfinancial measurements.   b. Timeliness.   c. Accounting for hard assets.   d. Forward-looking information.

Accounting information provides useful information about business transactions and events. Those who provide and use financial reports must often select and evaluate accounting alternatives. The Conceptual Framework examines the characteristics of accounting information that make it useful for decision-making. It also points out that various limitations inherent in the measurement and reporting process may necessitate trade-offs or sacrifices among the characteristics of useful information. Instructions a. Describe briefly the following characteristics of useful accounting information. 1. Relevance. 2. Faithful representation. 3. Understandability. 4. Comparability (consistency). 5. Neutrality. b. b. For each of the following pairs of information characteristics, give an example of a situation in which one of the characteristics may be sacrificed in return for a gain in the other. 1. Relevance and faithful representation. 2. Relevance and consistency. 3. Comparability and consistency.…

Which of the following is a mechanical aspect of accounting? Select one: a. Analyzing the transactions preparatory to the recording process b. Designing the accounting system c. Reviewing the effectiveness of the internal control procedures d. Preparation of the financial budget         Which of the following statement is not true? Select one: a. A non-accounting graduate may work as a bookkeeper or accountant of a business enterprise. b. A non-CPA may be engaged in public accounting. c. To be a good accountant, one must have mastery of mathematics. d. A non-CPA may be the chief accountant of a business enterprise.         The area of accounting that relates to providing audit, tax, and consulting services to clients. Select one: a. General managers b. Public accounting c. Incorporators d. Private accounting

The business entity assumption is important because O a. it requires that the company record all of its economic transactions in accordance with GAAP. O b. it limits economic data in the accounting system to data directly related to the activities of the business. O c. it limits the amount that a company can record for its transactions in the accounting records. O d. it requires that all transactions be recorded in the period in which they occur.