Here are the answers to the short quiz on Introduction to Accounting.

1. Which does not form part of the definition of accounting?

a. Provides information
b. Useful in decision making
c. Primarily concerned with historical data
d. Processes transactions of financial character

2. Accounting provides which of the following information?

a. Qualitative information
b. Quantitative information
c. Financial information
d. All of the above
3. Accounting is
a. An art
b. A science
c. Both an art and a science
d. Neither an art nor a science
4. Which of the following is an economic entity?
a. A charitable institution
b. A grocery store
c. Both A and B
d. None of the above
5. The branch of accounting that focuses on the preparation and presentation of financial statements
primarily to externalusers.
a. Financial accounting
b. Management accounting
c. External auditing
d. Tax accounting
6. Provides information used internally for planning, evaluating, analyzing, and controlling business decisions
and operations.
a. Internal auditing
b. Financial accounting
c. Management accounting
d. Forensic accounting
7. They are interested in a company's ability to continue its existence, especially if they are heavily
dependent on the company's operations.
a. Government
b. Customers
c. Suppliers
d. Lenders
8. The area of practice where CPAs provide accounting services to several clients on a contractual or
engagement basis?
a. Public accounting
b. Private accounting
c. Government accounting
d. Education or academe
9. Trade creditors are most interested in which accounting information?
a. Profitability
b. Adaptability
c. Liquidity
d. Ability to continue operations
10. The basic purpose of accounting is to
a. Provide information for decision-making
b. Compute the applicable income tax
c. Comply with state requirements
d. Determine the net income of a company

The type or branch of accounting that generates reports for the use of external parties such
as creditors, investors and government agencies is known as:
 Financial accounting
 Managerial accounting
 Tax accounting
 Forensic accounting

The branch of accounting that generates reports and information for the use of internal
management is known as:
 Tax accounting
 Managerial or management accounting
 Auditing
 International accounting

Which one of the following is not an external user of accounting information?

 Investor
 Creditor
 Manager
 Customer

Which of the following is correct?

 Owner’s Equity = Liabilities + Assets
  Liabilities = Assets + Owner’s Equity
 Assets = Liabilities + Owner’s Equity
 Assets = Owner’s Equity

Who is known as the father of accounting?

 Leonardo da Vinci
 Fra Luca Pacioli
 Al Khawarizmy
 Al Mazendarany

Which of the following is correct about double entry system of accounting?

 Every business transaction brings at least two financial changes in business.
 Financial changes are recorded as debits or credits in two or more accounts.
 Every debit entry has a corresponding credit entry.
 All of the above