Tag: meaning, objectives, importance and preparation of final accounts

Quizzes (0) Questions (76)

Questions Related to meaning, objectives, importance and preparation of final accounts

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 gross decreases in economic benefits for the business are what?

  1. Expenses

  2. Obligations

  3. Creditors

  4. Income or gain
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Expenses are defined as decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrence of liabilities.

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

When a consistency is found between financial statements of one entity from period to period.

  1. Conventions of conservatism

  2. Conventions of materiality

  3. Conventions of disclosure

  4. Conventions of horizontal consistency
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The convention of consistency ensures that accounting policies and methods are applied uniformly from one period to the next to allow for comparison.

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. They are mainly prepared for external users of financial information

  2. They are more complex and hard to prepare

  3. They are the summary of accounting data

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

This is a duplicate of 472122; financial statements are prepared for external users, while management accounts are for internal use.

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

Auditor has to give its opinion whether the financial statement depicts _______________.

  1. True and correct view

  2. Fair and correct view

  3. True and fair view

  4. True and exact view
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The objective of an audit is to check the fairness of financial statements. Auditors accumulate evidence to reach conclusion about the fairness of financial statements. An auditor has  a duty to provide reasonable assurance that material misstatements will be deleted. 

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

Festival Advance to employees is ____________________.

  1. Capital Expenditure

  2. Revenue Expenditure

  3. Deferred Revenue Expenditure

  4. Prepaid Expenses
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Festival advances are payments made to employees that will be recovered or adjusted against future salary, making them a current asset or prepaid expense.

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

Risk free rate is subtracted from expected market return is considered as _______.

  1. country risk

  2. diversifiable risk

  3. equity risk premium

  4. market risk premium
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The equity risk premium is the excess return that investing in the stock market provides over a risk-free rate.

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

Third step in calculating value of stock with non-constant growth rate is to find ___________.

  1. PV of expected dividends

  2. FV of expected dividends

  3. PV of intrinsic rate

  4. FV of intrinsic rate
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In the multi-stage dividend discount model, the third step is typically calculating the present value of the expected dividends during the non-constant growth phase.

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 leverage is also known as ________________.

  1. Trading on equity

  2. Trading on debt

  3. Interest on equity

  4. Interest on debt
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Financial leverage, which involves using debt to increase the potential return on equity, is commonly referred to as trading on equity.

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

State with reasons, whether the following statements are True of False.
Financial management is essential for all types of organisations.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

This statement is True. 
1) The business organisation irrespective of its type and nature needs finance for its formation, for carrying out day to day activities, for development and expansion, etc. 


2) Financial management is essential for all types of business organisation as it deals with procurement of funds and their efficient and effective utilization in the business. 

3) Financial management deals with planning, organizing. directive and controlling financial activities of business organisations. 

4) Generally all business activities are supported by the savings which comes from the society. Many a times these savings are not adequate to meet the financial requirement of the business. It is therefore necessary that available scarce fund must be utilized systematically and more efficiently. 

5) Financial management plays a very important role in making the best use of financial resources.

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 Account is also called as ________.

  1. One Account

  2. Two Account

  3. Three Account

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

Final account are represented by below three accounts:


Trading account
Profit & Loss account
balance Sheet