Azrin.docx

1. **What is the primary purpose of financial accounting?** - a\) To provide internal reports for management - **b) To provide financial information to external users** - c\) To prepare tax returns - d\) To audit financial statements 2. **Which of the following is not...

1. **What is the primary purpose of financial accounting?** - a\) To provide internal reports for management - **b) To provide financial information to external users** - c\) To prepare tax returns - d\) To audit financial statements 2. **Which of the following is not one of the primary financial statements?** - a\) Balance Sheet - b\) Income Statement - **c) Budget Report** - d\) Statement of Cash Flows 3. **In double-entry bookkeeping, each transaction affects at least:** - a\) One account - **b) Two accounts** - c\) Three accounts - d\) Four accounts 4. **The accounting equation is:** - a\) Assets + Liabilities = Equity - b\) Assets = Liabilities + Revenue - **c) Assets = Liabilities + Equity** - d\) Equity = Assets - Liabilities 5. **Which accounting method records revenues and expenses when they are incurred, regardless of when cash is exchanged?** - a\) Cash basis accounting - **b) Accrual basis accounting** - c\) Modified cash basis accounting - d\) Hybrid accounting 6. **Which of the following is an example of an adjusting entry?** - a\) Recording a cash sale - b\) Recording the purchase of inventory - **c) Recording depreciation expense** - d\) Recording a loan payment 7. **Under accrual basis accounting, when are revenues recognized?** - a\) When cash is received - b\) When cash is spent - **c) When they are earned** - d\) When an invoice is sent 8. **Which statement is correct regarding current assets?** - **a) They are expected to be used or converted into cash within one year** - b\) They are expected to be used or converted into cash after one year - c\) They include long-term investments - d\) They include property, plant, and equipment 9. **Which of the following is classified as a non-current liability?** - a\) Accounts Payable - **b) Notes Payable (due in 2 years)** - c\) Accrued Expenses - d\) Unearned Revenue 10. **Which principle requires accountants to adhere to a set of guidelines and ethical standards?** - a\) Matching Principle - b\) Revenue Recognition Principle - c\) Cost Principle - **d) Generally Accepted Accounting Principles (GAAP)**