30 Questions
What is the function of classification in accounting?
To systematically group transactions of one nature
What is the purpose of summarizing in accounting?
To prepare financial statements
In accounting, what is the end-function of interpreting financial data?
To systematically analyze and interpret financial data
How does communicating fit into the functions of accounting?
By distributing accounting reports properly
What is Mr. Juan's main business after his retirement?
Bakery owner
Who is in charge of both baking and sales at Mr. Juan's bakery shop?
Jose
What is the purpose of an account title in accounting?
To identify the account and convey its purpose
Which of the following is NOT a type of account in the Statement of Financial Position or Balance Sheet?
Income
What is the essential characteristic of an asset?
All of the above
Which of the following is NOT a classification of current assets?
Property, Plant, and Equipment
What is the time period for an asset to be considered a current asset?
Within one year
Which of the following statements about assets is correct?
Assets must provide future economic benefits
What is the purpose of purchasing inventories in a business?
To utilize excess cash
What does Notes Receivable represent in accounting?
Interest collectible on promissory notes
What do Contra-Assets Accounts like Allowance for Doubtful Accounts represent?
Portion of accounts receivable estimated to be uncollectible
What is the purpose of Advances to Employees in accounting?
To provide employees with loans payable through salary deductions
What should NOT be included as part of a company's expenses?
Gas expenses for the owner's personal vehicle
What do Prepaid Expenses in accounting signify?
Services paid for but not yet utilized or consumed
What is the basic time period for preparing accounting reports?
One year
What category does Accrued Income belong to in accounting terms?
Trade and Other Receivables
Which of the following is NOT an example of a fiscal year?
January 1, 2019 to December 31, 2019
What principle assumes that a business enterprise will continue to operate indefinitely?
Going Concern Principle
According to the Monetary Unit Principle, what should a company report its financial statements in?
The currency of the country where the company is headquartered
Which of the following is an example of a calendar year?
January 1, 2020 to December 31, 2020
What is the second step in examining a business transaction?
Determine which accounts will be affected
In journalizing a transaction, what does the 'Ref.' column in the general journal represent?
Reference to ledger accounts
What does a complete journal entry consist of?
Date, accounts affected, and explanation
In journalizing, where is the credit account title typically entered?
Indented on the next line after the debit account
What role does a brief explanation play in a journal entry?
Provides context for why the transaction occurred
What purpose does leaving a space between journal entries serve?
Separates individual journal entries for clarity
Explore key concepts in accounting including classification of journalized data, preparation of financial statements, and interpretation of financial information.
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