Financial Accounting Concepts and Standards Quiz

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Questions and Answers

According to the business entity concept, how are the affairs of a business to be treated?

As having no distinction from the non-business activities of its owner(s)
As being subordinate to the non-business activities of its owner(s)
As being combined with the non-business activities of its owner(s)
As being quite separate from the non-business activities of its owner(s) (correct)

What does the dual aspect concept state about accounting?

There is only one aspect of accounting – represented by the assets of the business
There are multiple aspects of accounting – represented by the assets, liabilities, and equity of the business
There are two aspects of accounting – one represented by the assets of the business and the other by the claims against them (correct)
There are three aspects of accounting – assets, liabilities, and equity

What is the objective of financial statements?

To provide information about the financial position only
To provide information about the non-financial position of an entity
To provide information about the performance of an entity
To provide information about the financial position, performance, and changes in the finances of an entity (correct)

What is the purpose of accounting standards?

<p>To ensure that financial statements are prepared on the basis of established concepts and adhere to rules and procedures (B)</p> Signup and view all the answers

How does financial accounting seek to achieve objectivity in the preparation and presentation of information?

<p>By devising a set of fundamental rules laying down the way transactions are recorded (D)</p> Signup and view all the answers