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Objectives of Accounting

The document consists of multiple-choice questions and true/false statements related to accounting principles and the users of accounting information. It covers topics such as the objectives of accounting, profit calculation, and the roles of internal and external users. Additionally, it includes matching exercises and assertions regarding the need for financial information by various stakeholders.

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sangeeta mukhi
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0 views3 pages

Objectives of Accounting

The document consists of multiple-choice questions and true/false statements related to accounting principles and the users of accounting information. It covers topics such as the objectives of accounting, profit calculation, and the roles of internal and external users. Additionally, it includes matching exercises and assertions regarding the need for financial information by various stakeholders.

Uploaded by

sangeeta mukhi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

The basic objective of accounting is

a. to provide useful information to the interested group of users

b. to provide non-economic events to the users

c. both a and b

d. none of the above

2. The management is provided with additional information from time to time from the accounting
records of business. (true/ false)

3. Match the following:

Column I Column II
1. Internal user a. Accounting
2. External user b. Management
3. Profit c. Investor
4. Language of business d. Revenue-expenses

(1-b, 2-c, 3-d, 4-a)

4. Calculate profit if revenue is Rs. 20000 and expense is Rs.10000 .

a. 5000

b. 4000

c. 10000

d. 20000

5. Calculate revenue if loss is Rs. 5000 and expense is Rs. 20000. (Rs. 15000)

6. Assertion(A) : Investors are external users.

Reason(R) : They need information on the risks and return on investment.

a. A is correct and R is correct reasoning for A.

b. A is correct but R is not correct reasoning for A.


c. A is incorrect and R is correct.

d. Both A & R are incorrect.

7. Assertion(A): Unions and employee groups are external users .

Reason(R): They need information on the stability, profitability and distribution of wealth within
the business.

a. A is correct and R is correct reasoning for A.

b. A is correct but R is not correct reasoning for A.

c. A is incorrect and R is correct.

d. Both A & R are incorrect.

8. Social responsibility groups, such as environmental groups need information on the impact on
environment and its protection such

a. profit and loss a/c

b. balance sheet

c. hazardous chemical emission audit

d. none of these.

9. Accounting liquidity measures the company’s _________ ability for debt repayment. (debtor’s)

10. Accounting provides information on

a. Cost and income for managers

b. Company's tax liability for a particular year

c. financial conditions of an institutions

d. All of the above

11. Match the following:

Column I Column II
1. Keeping systematic records a. Profit = revenue – expense
2. Calculation of results b. Balance sheet position statement
3. Financial position of business c. Acts as evidence
4. Provide information to various parties d. Internal users & external users

(1-c, 2-a, 3-b, 4-d)

12. Statement I: Lenders and financial institutions-information on the creditworthiness of the


company and its ability to repay loans and pay interest.

Statement II: Suppliers and creditors-information on whether amounts owed will be repaid when
due, and on the continued existence of the business.

a. Statement I is correct and Statement II is incorrect.

b. Statement I is incorrect and Statement II is correct.

c. Both Statement I and Statement II are correct.

d. Both Statement I and Statement II are incorrect.

13. The necessary information, particularly in case of external users, is provided in the form of financial
statements, viz., profit and loss account and balance sheet. (true/false)

14. Competitors use accounting information

a. to maintain good relations

b. to know strengths and weaknesses

c. both a & b

d. none of these.

15. _________ = revenue – expenses (profit/loss)

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