Accounting : Introduction MCQs

Chapter 1 Accounting: An Introduction 

(Meaning and Scope of Accounting)

1. which of the following is not a sub-field of accounting?

a) Management Accounting
b) Cost Accounting
c) Financial Accounting
d) Book-Keeping.

Ans: D) Book Keeping

2. Purpose of an accounting system include all the following except

a) interpret and record the effects of business transaction.

b) Classify the effects of transactions to facilitate the preparation of reports.

c) Summarize and communicate information to decision makers.

d)  state the specific types of business enterprise transactions that the enterprises may engage in.

Ans: D) state the specific types of business enterprise transactions that the enterprises may engage in.

3. Book-keeping is mainly concerned with 

a) Recording of financial data.

b) Designing the systems in recording, classifying and summarising the recorded data.

c) Interpreting the data for internal and external users

d) None of the above.

Ans: A) Recording of financial data.

4. All of the following are functions of Accounting except 

a) Decision making

b) Forecasting

c) Measurement

d) Ledger posting

Ans: d) Ledger posting

5. Financial statements are part of .

a) Accounting.

b) Book-keeping

c) None of the above.

d) All of the above.

Ans: a) Accounting.

6. Financial position of the business is ascertained on the basis of

a) Records prepared under book-keeping process.

b) Trial balance

c) Accounting reports.

d) None of the above.

Ans: c) Accounting Reports.

7.  Users of accounting information include 

a) Creditors

b) Customers

c) Lenders.

d) All of the above.

Ans: d) All of the above.

8. Financial statements do not consider 

a) Assets expressed in monetary terms.

b) Liabilities expressed in monetary terms.

c) Only assets expressed in non-monetary terms.

d) Assets and liabilities expressed in non-monetary terms.

Ans: d) Assets and liabilities expressed in non-monetary terms.

9. On January 1, Sohan paid rent of 5,000. This can be classified as 

a)  An Event A transaction as well as an event.

b) A transaction.

c) A transaction as well as an event.

d) Neither a transaction nor an event

Ans: b) A transaction. 

10. On March 31, 2011 after sale of goods worth 2000, he is left with the closing stock of 10,000. This is 

a) An event.

b) A transaction.

c) A transaction as well as an event.

d) Neither a transaction nor an event.

Ans: a) An Event