RBA Quiz 1

Review of Basic Accounting
Introduction to Accounting
Quiz no. 1
Name: ________________ Date: _______________

Section: ________________ Score: _______________
PART 1: MULTIPLE CHOICE. Write your letter choices before the numbers.
1. Which of the users of accounting information wants to know if a company is profitable

and able to grow in the future so that they can invest in such company?
a. Owner
b. Investor
c. Customer
d. Employees
2. It is the process of recognition or non-recognition of business transactions
a. ldentifying
b. Measuring
c. Communicating
d. Bookkeeping
3. This branch of accounting is primarily concerned with the preparation and presentation of
financial statements
a. Financial Accounting
b. Management Accounting
c. Cost Accounting
d. Auditing
4. The basic purpose of accounting is
a. To provide the information that the managers of an economic entity need to control its
operations.
b. To provide information that the creditors of an economic entity can use in deciding
whether to make additional loans to the entity.
c. To measure the periodic income of the economic entity.
d. To provide quantitative financial information about a business enterprise that is useful in
making rational economic decision.
5. One of the forms of business that is created by operation of law having the right of
succession and the powers, attributes and properties expressly authorized by law or incident
to its existence.
a. Manufacturing
b. Partnership
c. Corporation
d. Sole Proprietorship
6. These transactions affect the assets, liabilities and equity of the business.
a. Business transactions
b. Accountable events
c. Anomalous transactions
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d. Fortuitous events
7.The process of identifying,measuring and communicating economic information of an
entity to users to make rational decision
a. Bookkeeping
b. Accounting
c. Financial Accounting
d. Management Accounting
8. Which of the following is true?
a. Stockholders are personally liable for the liabilities of the corporation if the company is
unable to pay.
b. Normally, stockholders can only sell their ownership interests when the corporation
terminates.
c. Partners can normally transfer their partnership interests with ease.
d. Partners are personally liable for the liabilities of the partnership if the partnership is
unable to pay.
9. Which accounting process is the recognition or non-recognition of business activities as
accountable events?
a. Communicating
b. Recording
c. Identifying
d. Measuring
10. Which users ned financial information to enable them to determine whether their loans
and the related interest will be paid when due?
a. custormers
b. investors
c. lenders
d. suppliers
PART II: TRUE/FALSE. Determine whether each statement is true or false. Write your
answer on the line next to the statement.
_________1. In a proprietorship, the owner receives all profits, absorbs all losses and is
solely responsible for all debts of the business. From the accounting viewpoint, the sole
proprietorship is distinct from its proprietor. In effect, the accounting records of the sole
proprietorship may include the proprietor's personal financial records.
_________2. A partnership is a business owned and operated by two or more persons who
bind themselves to contribute money, property or industry to a common fund, with the
intention of dividing the profits among themselves.
_________3. A partnership is always owned by two individuals.
_________4. Manufacturing companies buy raw materials, convert them into products and
then sell the products to other companies or to final consumers.
_________5. Accounting is a service activity. Its function is to provide qualitative
information, about economic entities that is intended to be useful in making economic

3
decisions.
_________6. A corporation is a business owned by its stockholders.
_________7. One characteristic of a corporation is that its owners are personally liable for
any losses incurred by the business.
_________8. Financial accounting focuses on the information needs of external users, while
management accounting focuses on the information needs of internal users.
_________9. Accounting is considered the “ language of business” because it is essential in
the communication of financial information.
_________10. The types of business accordig to activities are service business,
merchandising business and manufacturing business.
_________11. Bookkeeping focuses on recording and organising financial data. Accounting
is the interpretation and presentation of that data to business owners and investors.
_________12. Accounting research refers to teaching accounting and accounting-related
subjects in an organized learning environment.
_________13. Accounting information is communicated to interested users through
accounting reports, the most common form of which is the financial statements.
_________14. Cost accounting deals with the collection, allocation, and control of the cost
of producing specific goods and services.
_________15. External auditing is concerned with the examination of the information
system, records and operations of the entity to ensure the effectiveness and efficiency of
operations and integrity of records.

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Review of Basic Accounting

Name: __ Date: _

1. Which of the users of accounting information wants to know if a company is profitable

Review of Basic Accounting

Review of Basic Accounting

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