Accounting Principles and Concepts Quiz

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15 Questions

What is the main purpose of accounting?

To measure the results of an organization's economic activities

Which field of accounting focuses on the reporting of financial information to external users?

Financial accounting

What is the primary focus of management accounting?

Measurement, analysis, and reporting of information for internal use by management

What do practitioners of accounting refer to as?

Accountants

What are the synonyms often used for the term 'accounting'?

Financial reporting

What is the primary characteristic of a reserve in financial accounting?

It always has a credit balance

Where can a reserve appear in shareholders' equity?

Any part except contributed or basic share capital

What is the purpose of an 'operating reserve' in nonprofit accounting?

Unrestricted cash available to sustain the organization

What are the different types of reserves used in financial accounting?

Capital reserves, revenue reserves, statutory reserves, realized reserves, unrealized reserves

From where can equity reserves be created?

Shareholders' contributions

What is the primary characteristic of a reserve in financial accounting?

Always has a credit balance

Where can a reserve appear in shareholders' equity?

Any part except for contributed or basic share capital

What is the purpose of an 'operating reserve' in nonprofit accounting?

Unrestricted cash available to sustain the organization

From which sources are equity reserves created?

Shareholders' contributions

What is the purpose of an 'Operating Reserve Ratio' specified by nonprofit boards?

Maintaining several months of operating cash or a percentage of their annual income

Test your knowledge of accounting principles, concepts, and terminology with this quiz. Challenge yourself with questions about financial statements, double-entry bookkeeping, GAAP, and more. Whether you're a student, professional, or simply curious about accounting, this quiz will help you assess your understanding of this essential aspect of business and finance.

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