Mastering the Basics of Accounting

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Which type of accounting is done within the architectural practice?

Independent accounting

External accounting

Management accounting

Internal accounting (correct)

Who usually performs external accounting?

Architect

Bookkeeper

Independent accountant (correct)

Staff

What is the purpose of an audit?

To review financial statements

To express an opinion on the financial position of the practice (correct)

To assess internal accounting

To compile financial data

What is the difference between a review and an audit?

A review is less extensive than an audit Signup and view all the answers

What is the lowest level of assurance provided by the external accountant?

Compilation Signup and view all the answers

What level of assurance do banks typically require?

Review Signup and view all the answers

What does an audit provide?

Reasonable assurance of material misstatements Signup and view all the answers

Which system of accounting records all income and expenses as they occur in the general ledger?

Accrual basis system Signup and view all the answers

When setting up a new company, what does the firm need to decide on?

The fiscal year and how to record transactions Signup and view all the answers

Which accounting method is required for architecture businesses by the Canada Revenue Agency (CRA), Accounting Standards for Private Enterprises (ASPE), and International Financial Reporting Standards (IFRS)?

Accrual basis system Signup and view all the answers

What are the two different systems of accounting to record transactions?

Cash basis system and accrual basis system Signup and view all the answers

Which type of financial report shows the current financial position of a business on a monthly basis?

Balance sheet Signup and view all the answers

What is the purpose of accurate records in accounting?

To increase profit opportunities Signup and view all the answers

When using an accounting software, what does a company need to select to record transactions?

The accounting method (cash or accrual) Signup and view all the answers

What are the two types of financial reports prepared using the accrual system?

Statement of income and expenses, and balance sheet Signup and view all the answers

Mastering the Basics of Accounting

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