Financial Accounting and Reporting - Definition and Branches
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Questions and Answers

Which concept states that financial transactions should be recorded when they occur, regardless of whether a cash transfer has been made?

  • Accrual concept (correct)
  • Going concern concept
  • Matching principle
  • Business entity concept

What concept assumes that a business entity will continue its operations at an indefinite period of time?

  • Time period assumption
  • Materiality concept
  • Going concern concept (correct)
  • Revenue recognition principle

Which principle requires that revenues and expenses must be matched in the same period?

  • Consistency principle
  • Matching principle (correct)
  • Full disclosure principle
  • Comparability concept

What assumption states that only events and transactions which can be measured and expressed in monetary terms are recorded in the books of accounts?

<p>Monetary unit assumption (B)</p> Signup and view all the answers

Which principle requires that all material items must be properly reported in the financial statements?

<p>Materiality concept (C)</p> Signup and view all the answers

What concept states that assets and liabilities of a business should be presented in accounting records at their historical cost?

<p>Historical cost concept (C)</p> Signup and view all the answers

Which principle requires disclosing all the relevant and appropriate financial and non-financial information in the financial statements?

<p>Full disclosure principle (B)</p> Signup and view all the answers

What principle states that a business should use the same accounting policies and methods for recording similar events or transactions from one financial period to another?

<p>Consistency principle (A)</p> Signup and view all the answers

What concept ensures that financial reports users must be able to compare these reports with previous years and with reports of other entities?

<p>Comparability concept (B)</p> Signup and view all the answers

What is the accounting process of organizing data in a chronological order for the purpose of preparation of financial statements?

<p>Finalizing (Post-closing Trial Balance) (D)</p> Signup and view all the answers

Who primarily uses management accounting for decision making?

<p>Internal management (B)</p> Signup and view all the answers

Which branch of accounting involves the categorizing, tracing, and collecting of manufacturing costs?

<p>Cost accounting (D)</p> Signup and view all the answers

For what purpose does the government use financial accounting?

<p>For budget allocation and utilization (B)</p> Signup and view all the answers

Which form of business organization has a separate legal personality from its owners?

<p>Corporation (A)</p> Signup and view all the answers

What type of business involves buying, processing, and selling products?

<p>Manufacturing (A)</p> Signup and view all the answers

Which external user is interested in the continuous availability of products and related accessories?

<p>Customers (D)</p> Signup and view all the answers

What is the main function of accounting?

<p>$1(2)$ economic decisions (B)</p> Signup and view all the answers

Which branch of accounting involves the review, examination, verification, evaluation or inspection of financial records?

<p>Auditing (C)</p> Signup and view all the answers

What does management accounting primarily focus on?

<p>Internal management for decision making (B)</p> Signup and view all the answers

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