Quiz 1 : Principal Accounting

Most companies in the United States follow standards issued by the IASB.

Transactions that can be measured in terms of money should be recorded in the accounting records.

Management of a business enterprise is the major external user of information.

Accounting information is used only by external users with a financial interest in a business enterprise.

Bookkeeping and accounting are one and the same because the bookkeeping function includes the accounting process.

The State Administration of Taxation in China is an example of an internal user of accounting information.

Identifying is the process of keeping a chronological diary of events measured in dollars and cents.

Compared to IFRS, GAAP tend to be simpler and less detailed.

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

The basic accounting equation is in balance when the creditor and ownership claims against the business equal the assets

Accountants do not have to worry about issues of ethics.

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Expenses are increases in equity that result from operating the business.

Accountants rely on a fundamental business concept—ethical behavior—in reporting financial information.

Share capital is the total amount paid in by shareholders for shares purchased.

Accountants record both internal and external transactions.

The ending retained earnings balance is reported on the statement of financial position.

Transactions that can be measured in dollars and cents are recorded in the financial information system.

The study of accounting is not useful for a business career unless your career objective is to become an accountant.

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The purchase of an asset on account increases assets and decreases equity.

The purchase of store equipment for cash reduces the equity by an equal amount.

For accounting purposes, the partnership affairs should be kept separate from the personal activities of the owners.

The process of reducing the differences between GAAP and IFRS is known as convergence.

The Financial Accounting Standards Board is a part of the International Accounting Standards Board.