chapter 1st of accountancy provide all important questions
Answers
Answer:
Question 1
Define Accounting.
Answer: According to the American Institute of Certified Public Accountants, Accounting is, ‘It is an art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events, which are, in part at least, of a financial character, and interpreting the results thereof.’
Question 2
Mention 3 functions of Accounting.
Answer: Functions of accounting are,
Maintaining complete and systematic records
Trusteeship
Compliance of legal needs
Question 3
Define Book-keeping.
Answer: According to J.R. Batliboi, bookkeeping is, ‘Book-keeping is an art of recording business dealing in a set of books.’
Question 4
Mention 2 Differences between accounting and accountancy.
Answer:
Accounting Accountancy
Accounting is an art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events, which are, in part at least, of a financial character, and interpreting the results thereof Accountancy is a body of knowledge prescribing definite rules to be observed while recording, classifying and summarising of transactions.
It relies on Book-keeping. It relies on both Book-keeping and Accounting.
Question 5
Mention the types of accounting.
Answer: There are 5 types of accounting. Namely,
Financial Accounting
Cost Accounting
Management Accounting
Tax Accounting
Social responsibility Accounting
Important Topics in Accountancy:
What is a Balance Sheet?
Partnership Deed
What is Goodwill?
Treatment of Goodwill
What Is Partnership
Question 6
Who are the users of Accounting?
Answer: The users may be categorised into 2 groups. Namely,
Internal users
External users
Question 7
What are the 3 advantages of accounting?
Answer: Advantages of accounting are,
Helpful in business
Helpful in decision making
Helpful in controlling
Question 8
What are the 5 roles of accounting?
Answer: Roles of accounting are,
Role of language
Role of the historical record
Role of the service provider
Role of information system
Role of determining the net profit
Question 9
What is the end product of financial accounting?
Answer: End product of financial accounting is ‘Financial Statements’.
Question 10
Mention 2 qualitative characteristics of accounting information.
Answer:
Reliability
Comparability
Question 11
External users of accounting information are not:
Lenders
Officers
Employees
Public
Answer: Officers
Question 12
Which of the following is not a sub-field of accounting?
Financial Accounting
Cost Accounting
Management Accounting
Book-keeping
Answer: Book-keeping
Question 13
What is the traditional function of accounting?
Answer: Recording of financial transactions.
Question 14
Book-keeping begins where accounting ends. True or False?
Answer: False
Question 15
Accounting is the language of business. True or False?
Answer: True
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