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Accounting Information Systems
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Accounting Information Systems

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Questions and Answers

What is the primary purpose of an accounting system?

  • To communicate reliable information to users
  • To record financial transactions
  • To provide reports to stakeholders about the economic activities and condition of a business (correct)
  • To identify business activities
  • Which type of accounting is concerned with the preparation of tax returns?

  • Cost and Management Accounting
  • Financial Accounting
  • Forensic Accounting
  • Taxation (correct)
  • What is the characteristic of reliable information in accounting?

  • It is relevant to its users
  • It is trusted by users (correct)
  • It is helpful in contrasting organizations
  • It affects the decision of its users
  • What is the role of the Malaysian Accounting Standards Board (MASB)?

    <p>To set both broad and specific accounting principles</p> Signup and view all the answers

    Who are the internal users of financial accounting information?

    <p>Managers, sales staff, and budget officers</p> Signup and view all the answers

    What is the purpose of financial statements?

    <p>To provide reports to stakeholders about the economic activities and condition of a business</p> Signup and view all the answers

    What is financial accounting concerned with?

    <p>Providing reports to stakeholders about the economic activities and condition of a business</p> Signup and view all the answers

    What is the characteristic of comparable information in accounting?

    <p>It is helpful in contrasting organizations</p> Signup and view all the answers

    Which principle ensures that accounting information is supported by independent, unbiased evidence?

    <p>Objectivity Principle</p> Signup and view all the answers

    What is the assumption underlying the Going-Concern Principle?

    <p>The business will continue operating indefinitely</p> Signup and view all the answers

    What is the purpose of the Monetary Unit Principle?

    <p>To express transactions in monetary units</p> Signup and view all the answers

    Which of the following is NOT a characteristic of revenue recognition?

    <p>Revenue is recognized when received in cash</p> Signup and view all the answers

    What is the primary function of the Business Entity Principle?

    <p>To separate business and owner's transactions</p> Signup and view all the answers

    What is the classification of Accounts Payable?

    <p>Short-term liability</p> Signup and view all the answers

    Which of the following is NOT a type of equity?

    <p>Dividends</p> Signup and view all the answers

    What is the accounting equation?

    <p>Assets = Liabilities + Equity</p> Signup and view all the answers

    Study Notes

    Accounting System

    • Identifies, records, and communicates relevant and reliable information to help users make better decisions.
    • Provides reports to stakeholders about the economic activities and condition of a business.

    Branches of Accounting

    • Auditing
    • Taxation
    • Forensic Accounting
    • Financial Accounting
    • Cost and Management Accounting
    • Public Sector Accounting

    Financial Statements

    • Balance Sheet
    • Income Statement
    • Statement of Cash Flows

    Users of Accounting Information

    • External Users: Lenders, Consumer Groups, Shareholders, External Auditors, Governments, Customers
    • Internal Users: Managers, Sales Staff, Officers, Budget Officers, Internal Auditors, Controllers

    Accounting Principles and Rules

    • Generally Accepted Accounting Principles (GAAP) govern financial accounting practice.
    • Relevant Information: affects the decision of its users.
    • Reliable Information: is trusted by users.
    • Comparable Information: is helpful in contrasting organizations.
    • Malaysian Accounting Standards Board (MASB): sets both broad and specific principles.
    • Securities Commission of Bursa Malaysia: establishes reporting requirements for companies that issue shares to the public.

    Accounting Principles

    • Objectivity Principle: accounting information is supported by independent, unbiased evidence.
    • Cost Principle: accounting information is based on actual cost.
    • Going-Concern Principle: reflects the assumption that the business will continue operating.
    • Monetary Unit Principle: express transactions and events in monetary units.
    • Revenue Recognition Principle:
      • Recognize revenue when it is earned.
      • Proceeds need not be in cash.
      • Measure revenue by cash received plus cash value of items received.
    • Business Entity Principle: a business is accounted for separately from other business entities, including its owner.

    Accounting Equation

    • Assets = Liabilities + Equity

    Assets

    • Current Assets:
      • Cash
      • Accounts Receivable
      • Notes Receivable
      • Store Supplies
    • Fixed Assets:
      • Land
      • Buildings
      • Equipment
      • Vehicles

    Liabilities and Equity

    • Short-term Liabilities: Accounts Payable, Bank Loan, Creditors' claims, Accrued Expenses
    • Long-term Liabilities: Bond, Debenture
    • Contributed Capital: Owner's claim on assets
    • Retained Earnings: Dividends

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    Related Documents

    L1@Introduction (2).pdf

    Description

    This quiz covers the basics of accounting information systems, including identifying, recording, and communicating relevant financial information to stakeholders.

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