ACT Biz Acctg_S12024-25

The starting point of the accounting process is

• identifying economic events
• communicating information to users.
• recording economic events
• None of the options

Answer explanation

Jupiter is a gas giant made primarily of hydrogen and helium. Unlike terrestrial planets that have solid surfaces, gas giants like Jupiter don't have a well-defined solid surface, allowing them to accumulate more mass in a gaseous form. This composition has allowed Jupiter to grow significantly larger than planets with solid surfaces.

Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?

• The sale of store equipment
• The appointment of new auditor to perform audit works
• The purchase of new computer for office use
• Payment of income taxes

The accounting process involves all of the following except:

• Recording non-quantifiable economic events
• communicating financial information to users by preparing financial reports
• analyzing and interpreting financial reports
• identifying economic transactions that are relevant to the business

Which of the following correctly identifies the normal balances of accounts; (i) Asset- Debit; (ii) Liability (credit); (iii) Owner's Equity (credit); (iv)Revenue (credit); (v) Expenses (debit)

• i,and ii only
• i,ii, and iii only
• i,ii, iii, and iv only
• All of the options

Which of the following represents the basic accounting equation?

• Assets = Liabilities + Expenses
• Assets = Liabilities + Equity
• Assets = Revenue – Equity
• Assets = Equity - Liabilities

Which of the following expands the basic accounting equation to include revenues and expenses?

• Assets = Liabilities + Equity + Revenue
• Assets = Liabilities + Equity + Revenue - Expenses
• Assets = Equity + Revenue - Expenses
• Assets = Liabilities + Equity - Revenue

Match the following:

• Revenue

• Service Performed by service-based business

• Liability

• pay bills of monthly utilities

• expenses

• take out business money for personal use

• Assets

• Bank Loan

• Drawings

• Office equipment

Which of the following is an example of a liability?

• Accounts Payable

• Inventory

• Cash

• Accounts Receivable

What is the primary purpose of financial statements?

• To provide information for tax purposes

• To record daily transactions

• To assist in decision-making for stakeholders

• To comply with legal requirements

Which of the following accounts is typically closed at the end of an accounting period?

• Cash

• Accounts Payable

• Revenue

• Equipment