Tag: meaning, objectives and importance of final accounts

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Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

The financial statements consist of _______________.

  1. Trial balance

  2. Profit and loss account

  3. Balance sheet

  4. Both (i) and (iii)

  5. Both (ii) and (iii)
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

At the end of every financial year, books of account of the business are closed and financial statements are prepared. Financial statements are prepared to know the profitability of the organization for a particular period and also to know the financial position of the business on a particular date. 


Financial statements consist of:
Profit and Loss Account
Balance Sheet.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Most financial advisors are registered with the Securities and Exchange Commission as ____________.

  1. registered representatives

  2. registered investor advisors

  3. registered financial planners

  4. registered securities consultants
Reveal answer Fill a bubble to check yourself
C Correct answer
Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Which International Monetary Organization funded North East Rural Livelihood Project (NERLP) in the four states of Mizoram, Nagaland, Sikkim and Tripura?

  1. IMF

  2. ODA

  3. World Bank

  4. USAID
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The North East Rural Livelihood Project (NERLP) was funded by the World Bank.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

A group of European countries have formed a union and created a common currency known as _________.

  1. the EU currency

  2. the European Union

  3. the EMU

  4. the Euro
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The European Union countries that adopted a common currency use the Euro.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Consider the following fundamental assumptions:
1. Prudence       2. Going concern
3. Accrual          4. Consistency
As per Accounting Standard -1, which of these assumptions are taken into consideration while preparing financial statements?

  1. 1 and 4

  2. 2 and 3

  3. 1, 2, 3 and 4

  4. 2, 3 and 4
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

As per Accounting Standard 1 (AS-1), the three fundamental accounting assumptions are Going Concern, Consistency, and Accrual.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

The purpose of preparing final accounts is to ascertain ________.

  1. Profit or loss

  2. Capital

  3. The value of assets

  4. Profit or loss and financial position
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The accounts which are prepared at the final stage of the accounting cycle to know the profit or loss and financial position of a business concern are called Final Accounts.Every businessman enters into business activities to earn profit. It is the accounting that shows profit or loss of a business concern. The role of accounting is to compile the financial record of a business in such a manner that yields the profit or loss of the business.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Final accounts include preparation of_______.

  1. Trading A/c

  2. Profit & Loss A/c

  3. Balance Sheet

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Final accounts consist of the Trading Account, Profit and Loss Account, and the Balance Sheet.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Which one of the following would not be included in a full set of company financial statements?

  1. The cash budget

  2. The statement of financial position

  3. The statement of changes in equity

  4. The income statement
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A full set of financial statements includes the Statement of Financial Position, Income Statement, Statement of Changes in Equity, and Cash Flow Statement. The cash budget is a management accounting tool, not a mandatory financial statement.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Net profit is computed in which of the following?

  1. Balance sheet

  2. Income statement

  3. Cash flow statement

  4. Statement of changes in equity
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The income statement (or profit and loss account) is specifically designed to calculate the net profit or loss of a business over a period.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Financial statements differ from management account because ___________.

  1. the are mainly prepared for external users of financial information

  2. they are more complex and hard to prepare

  3. the are the summary of accounting data

  4. the are prepared on basis of actual concept
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Financial accounting is primarily aimed at external stakeholders (investors, creditors), whereas management accounting is for internal decision-making.