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MCQs 1: In accounting an Economic event is referred to as:

Cash Bank statement Transaction Exchange of money
Answer Explanation

MCQs 2: Identify the correct sequence of accounting process

Communicating→Recording→Identifying Recording→Communicating→Identifying Identifying→communicating→recording Identifying→recording→communicating
Answer Explanation

MCQs 3: Bookkeeping mainly concerns with which part of accounting process?

Analyzing Preparing financial statements Recording financial information Auditing the books of accounts
Answer Explanation

MCQs 4: Financial accounting provides financial information to all of the following external users except:

Government agencies investors Creditors Managers
Answer Explanation

MCQs 5: For which step of accounting process the accountants of business entity prepare financial statements?

Identification of economic event Communication of financial information Recording financial information Making decisions about business
Answer Explanation

MCQs 6: Keeping the log of financial information in books of original entries is called__________?

Recording summarizing Grouping Processing
Answer Explanation

MCQs 7: Auditing is what?

Reporting the financial information Examination of financial statements Preparation financial statements maintaining the ledger records
Answer Explanation

MCQs 8: Which of the following is the external user of financial statements?

Manager of the business CEO of the business Creditor of the business Controller of the business
Answer Explanation

MCQs 9: Which of the following is the internal user of financial statements?

Creditor of the business Government agency Shareholder of the business Manager of the business
Answer Explanation

MCQs 10: _________ is the first phase of accounting cycle?

Identifying an economic event or transaction Preparing journals Posting entries to ledger accounts Making decisions about business
Answer Explanation

MCQs 11: Financial statements differ from management account because

They are mainly prepared for external users of financial information They are more complex and hard to prepare The are the summary of accounting data The are prepared on basis of actual concept
Answer Explanation

MCQs 12: ________ is a separate legal entity that Total capital can be divided in many shares.

Partnership Sole proprietorship Company Non-profit organization
Answer Explanation

MCQs 13: An asset posses which of the following?

Future economic benefits for the business All kind of benefits for the business Expenses for the business Merits and Demerits for the business
Answer Explanation

MCQs 14: Liabilities are which of the following?

Resources Obligations Future benefits Expenses
Answer Explanation

MCQs 15: ________ is the gross inflow of economic benefits?

Assets Liabilities Income Expenses
Answer Explanation

MCQs 16: The gross decrease in economic benefits for the business are what?

Expenses Obligations Creditors Income or gain
Answer Explanation

MCQs 17: An asset must be _______ by the business to be shown as an asset in its “balance sheet”

Possessed Owned Controlled Used
Answer Explanation

MCQs 18: Liability are arisen from which of the following events?

Present event Future event Past event None of them
Answer Explanation

MCQs 19: Which of the following can be considered as the most important phase of accounting cycle and it is the primarily objective of financial accounting?

Identifying transactions Preparing “T Accounts” Preparing financial statements Preparing trial balances
Answer Explanation

MCQs 20: Which is the most important characteristic that all assets of a business have?

Long life of assets Value of assets Intangible nature of assets Future economic benefits
Answer Explanation

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