Accounting for JGU

What is the primary purpose of financial accounting?

• To provide financial information to potential investors
• To calculate the company's tax liability
• To manage the company's investments
• To track the company's stock performance

Purchasing inventory on credit would:

• Increase the company's cash balance
• Decrease the company's cash balance
• Have no effect on the company's cash balance
• Increase the company's inventory and accounts payable

If a company borrows money from a bank, which accounts will be affected?

• Revenue and Expense
• Liability and Equity
• Asset and Liability
• Asset and Revenue

What is a key advantage of a limited liability partnership (LLP)

• Each partner is not personally liable for the debts of the partnership
• Each partner has unlimited liability for the debts of the partnership
• Each partner can make decisions without the consent of the other partners
• The partnership has a fixed lifespan

How does the conservatism principle influence financial reporting?

• It encourages overstatement of income and assets
• It encourages understatement of income and assets
• It encourages accurate reporting of income and assets
• It has no influence on financial reporting

If a company receives advance payment for services, the effect is:

• The company's assets decrease
• The company's liabilities increase
• The company's equity increases
• The company's liabilities decrease

Current liabilities are obligations that are expected to be settled within:

• One year or the normal operating cycle, whichever is longer
• Two years or the normal operating cycle, whichever is longer
• Three years or the normal operating cycle, whichever is longer
• Five years or the normal operating cycle, whichever is longer

If the total assets are ₹50,000 and total liabilities are ₹20,000, what is the owner's equity?

• ₹30,000
• ₹70,000
• ₹20,000
• ₹50,000

In a balance sheet, assets are typically categorized as

• Current and Non-Current Assets

• Operating and non-operating assets.

• Profit and loss assets

• Physical and intangible assets.

What does the term "equity" represent in the balance sheet equation?

• The value of a company's assets minus its liabilities
• The total amount of money a company owes to its creditors
• The total amount of money a company has in its bank account
• The total amount of money a company has invested in its own stock