ACCOUNTING INTRO: FM 10

Only accountable events are recorded in the accounting books.

• TRUE

• FALSE

Accounting is a service activity.

• TRUE

• FALSE

Although bookkeeping and accounting are interrelated, they are not the same.

• TRUE

• FALSE

The purpose of accounting is to provide information that is useful in making any business decisions.

• TRUE

• FALSE

A transaction or event is recorded in the accounting records only if it has an effect on the assets, liabilities, equity, income or expenses of the business.

• TRUE

• FALSE

The main purpose of accounting is

• to account for money so it will not be lost.

• to provide information that is useful in making economic decisions

• to safeguard the assets of a company.

• to provide a clear view of the state of the industry’s economy

In accounting, the term “recording” is also called

• journalizing

• communicating

• debiting

• posting

Which of the following statements regarding the recording of events is valid?

• Only non-accountable events are recorded in the accounting books

• Only accountable events are recorded in the accounting books

• Both non-accountable and accountable events are recorded in the accounting books

• Neither non-accountable nor accountable events are recorded in the accounting books

Erroneous financial statements can lead to bad financial decisions.

• TRUE

• FALSE

Financial information is information expressed in terms of money.

• TRUE

• FALSE