BSA2A-2 by GEI

1. Which of the following statements is/are true?

I. Accounting is a service activity intended to fulfill a useful function in society

II. Accounting involves the art of recording, classifying and summarizing transaction and events, and interpreting the results thereof.

III. Accounting is an art but not a science

IV. Accounting provides quantitative financial information intended to be useful in making economic decisions

• I, II, III, IV

• I, II, III

• I, II, IV

• II, III, IV

The branch of accounting concerned with the presentation of financial information primarily for use of third person outside of business enterprise.

• Financial Accounting

• Management Accounting

• Government Accounting

• All of the above

Accounting is an art because

• of the existence of a body knowledge governing accounting practice

• of accounting theory

• the necessity of applying creative skill and ability

• None of the above

Financial accounting is the branch of accounting that focuses on

• special purpose reports of financial position and results of operations

• financial statements

• the various need of statement users

• general purpose reports of financial position and results of operations

General-purpose information is

• not intended to satisfy the specialized needs of individual users.

• intended to satisfy the specialized needs of individual users

• not intended to satisfy the common needs of individual users.

• Provided by managerial accounting.

Which of the following is not true?

• Accounting is concerned primarily with quantitative information used by persons who must make economic decisions among alternative actions.

• Governmental accounting is also known as municipal or fund accounting

• The branch of accounting concerned with the presentation of financial information to assist management in planning and controlling operations is called managerial accounting.

• Financial accounting emphasizes special purpose information based on presumption that significant numbers of users need similar information.

The body of rules and principles which govern accounting practices is referred to as

• Accounting practice

• Accounting principles

• Accounting concepts

• Accounting theory

The layers of the structure of accounting theory include the following except

• methods and procedures

• principles

• measurement and recognition

• postulates and conventions

The basic assumption or premises on which accounting principles rest are called

• accounting postulates

• accounting procedures

• accounting principles

• accounting laws

The normative attitudes or ideas of the accounting profession as to what ought to represent good accounting practice and which modify the application of accounting principles are known as

• accounting postulates

• accounting conventions

• accounting procedures

• accounting principles