Tag: generally accepted accounting principles (gaap)

Quizzes (9) Questions (109)

Questions Related to generally accepted accounting principles (gaap)

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

Accounting is a substitute of ________ .

  1. Recording

  2. Book-keeping

  3. Memory

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

During 1500 A.D., accounting was used by business firms for recording transactions related to business.

Substitute of memory− As, it is beyond human capabilities to remember each and every business transaction, so accounting plays an important role in recording these transactions in the book of accounts.

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

Range, in which relationship exists between level of activity or total cost is called ____________.

  1. functional range

  2. relevant range

  3. unit range

  4. related range
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The relevant range is the range of activity within which the assumptions about cost behavior (fixed or variable) remain valid.

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

An official entity that represents bondholders and ensures stated rules in indenture is classified as __________.

  1. Trustee

  2. Trust

  3. Stated entity

  4. Owner entity
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An official entity that represents bondholders and ensures stated rules in indenture is classified as trustee. A trustee is a person or firm that holds and administers property or assets for the benefit of a third party. A trustee may be appointed for a wide variety of purposes, such as in the case of bankruptcy, for a charity, for a trust fund, or for certain types of retirement plans or pensions.

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

The basic function of financial accounting is to ___________.

  1. record all business transactions

  2. interpret the financial data

  3. assist the management in performing functions effectively

  4. information to management
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

All business transaction which are in monetary terms are to be recorded in books of account in a chronological order. This function is known as the process of financial accounting.

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

Generally, under the single entry system __________.

  1. only personal accounts are maintained

  2. only personal, cash and bank accounts are maintained

  3. all accounts are maintained

  4. no account is maintained
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under single entry system , no purchase, sales accounts are maintained. Only cash, bank and personal ledgers are maintained.

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

The prime function of accounting is to ____________.

  1. record economic data.

  2. provide the informational basis for action.

  3. classify and record business transactions.

  4. attain non-economic goals.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As the definition says "accounting is the art of recording, classifying and summarizing all the monetary transactions in a significant manner". The prime function of accounting is recording and classifying  the business transactions.