Quiz

Recap
What is Accounting? Who are the users of Accounting information? What is financial accounting and how is it different from management accounting?

Recap
What are the financial statements that are generated in financial accounting? What are the basic assumptions of accounting? What are the concepts on which accounting is based on? What are assets and liabilities?

The primary purpose of accounting is to determine whether the business is profitable or not
YES NO

The financial position of the firm is used to describe an entitys activity during the year
TRUE
FALSE

Financial accounting information is primarily designed to assist investors and creditors in deciding where to place their scarce resources
TRUE
FALSE

Management Accounting involves the development and interpretation of accounting information to aid the management in taking decisions
TRUE
FALSE

External users of financial accounting are the same users of the management accounting information
TRUE
FALSE

The primary financial statements of are an income statement and balance sheet
TRUE
FALSE

Which of the following shows details and results of the Companys profit related activities over a period of time
Balance Sheet Income Statement Statement of Cash flows

Which of the following would be considered as an external user?

Plant Manager Managing Director Board of Directors Creditor

Going Concern Concept means that the business is concerned about going to other places
TRUE FALSE

Money Measurement Concept states that all events/ transactions affecting the entity and which can be expressed in money terms has to be accounted
TRUE
FALSE

Dual Entity Concept means that there are two aspects of every transaction
TRUE
FALSE

Indicate whether each of the following is identified with a) an asset b) a liability c) Owners equity
Fees earned Equipment Wages expenses Land Salary payable cash

1. 2. 3. 4. 5. 6.

1. The Resources owned by a business are called _____________ 2. A profit making enterprise operating as a separate legal entity and in which ownership is divided into shares is known as a ___________.

 Opened a business bank account with a deposit of Rs. 10000 from personal funds. Purchased stationery supplies of Rs. 1150 on credit. Received cash from fees earned for managing rental property Rs. 4500. Paid rent for office premises Rs. 2500 Paid creditors Rs.675 Billed customers for fees earned for managing rental property Rs. 3250 Paid automobile expenses Rs. 980 and miscellaneous expenses Rs. 775. Withdrew cash for personal use Rs. 1000

Analyzing and Summarizing Transactions

Determine whether an asset, a liability, owners equity or expense is affected by the transaction. For each account affected by the transaction, determine whether the account increases or decreases Determine whether each increase or decrease should be recorded as a debit or a credit

Asset accounts
Liability Accounts Owners equity

Debit Increases Decreases Decrease

Credit Decreases Increases Increases

 NetSolutions paid a premium of Rs. 2400 for a comprehensive insurance policy covering liability, theft and fire. The policy covers a two year period. NetSolutions received an offer from a local retailer to rent land as a parking lot. Netsolutions agreed to rent the land for three months beginning March 1st. Netsolutions received Rs. 36000 for three months beginning March 1.