Accounting Quiz

Identify the following as an advantage or disadvantage of computerized accounting records.

• Advantage

• Disadvantage

Identify the accounting concept for each situation (1-5). The owner of a business recently introduced a policy of providing for doubtful debts.

A receivable account was written off as bad debt as soon as it became clear that no money would be received.

The owner of a business paid for a friend's birthday party from the business's bank account. The account's clerk correctly recorded the amount in the drawings account in the business's general ledger.

The owner of a business considered switching from using the reducing balance method of depreciation to the straight-line method. The owner recommended using the straight-line method so that one year's accounts can be compared with another year's accounts on the same basis.

When preparing the final accounts, it is important to consider not only what cash has been paid for an expense but also what should have been paid for the expense for that period.

State the term that is used to describe persons who have an interest in an organization.

Identify 2 internal users of financial information.

This is the record-keeping aspect of accounting.

Investors may lose more than the investment if the organization fails.