Introduction to Accounting

Owners of business firms are the only people who need accounting information.

• True

• False

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

• True

• False

Financial statements are the major means of communicating accounting information to interested parties.

• True

• False

The economic entity assumption requires that the activities of an entity be kept separate and distinct from the activities of its owner and all other economic entities.

• True

• False

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

• True

• False

The starting point of the accounting process is

• communicating information to users.

• identifying economic events.

• recording economic events.

• None of these answers are correct.

Which of the following statement is true?

• Bookkeeping is recording all the business transaction and owner's own transaction

• Bookkeeping deals with record-keeping and is one only aspect of accounting

• Bookkeeping and accounting are one and the same since the bookkeeping function is includes in accounting process

• None of the above

Book keeping is mainly concerned with

• Recording of financial data

• Designing the systems in recording, classifying, and summarizing the recorded data

• Interpreting the data for internal and external users

• None of the above

Which of the following is definition of accounting?

• It's a process of classifying, recording, and summarizing the business transaction in monetary unit, interpretating the data in assist stakeholders in making decision.

• It's a process of recording, classifying, and summarizing the business transaction in monetary unit, interpretating the data in assist stakeholders in making decision.

• It's a process of classifying, recording, and summarizing the business transaction interpreting the data in assist stakeholders in making decision.

Users of accounting information include

• Creditors

• Lenders

• Customers

• All of the above