Question

1. You decide to form a partnership with a friend which accounting concept requires that you separate tout personal affairs from
those of the partnership.
a. Cost Principle
b. going concern
c. time period
d.economic entity

2. Which of the following groups sets the accounting stanndards used in South Africa
a.PAAB
b.SAICA
c.IASB
d.GAAP

3. Who ultimately has responsibility for a company's financial statements?
a.shareholders
b.management
c.external auditors
d.SEC

4. For accounting information to be useful for decision making, it must be
a.relevent
b.a faithful representation
c.both relevant and a faithful representation
d.Neither of these qualities

5.The first in ethical decision making, based on financial information is to
a.list the alternatives and evaluate the impact of each on those who may be affected
b.recognize an ethical dilemma
c.analyze the key elements in the situation
d. select the best alternative

6.The primary purpose of financial reporting is
a. to help users reach decisions in an informed manner
b.to provide the information necessary to prepare tax returns
c. to provide historical record of company's performance
d. none of the above

7. The accounting characteristics that allows for comparisons to be made within a single company
a.comparability
b.consistency
c.neutrality
d.materiality

8. All of the following characteristics make accounting information useful except
a.relevance
b.understandability
c.faithful representation
d.All of the above are characteristics of useful accounting information

9.All of the below are examples of current assets except
a.cash
b.prepaid insurance
c.land
d.accounts receivables

10. A company has an obligation due in 2016. On a statement of financial position prepared at the end of 2012, the obligation should
be classified as
a. a current asset
b.a current liability
c.a long term liability
d.none of the above

Answer 1

1. You decide to form a partnership with a friend which accounting concept requires that you separate tout personal affairs from
those of the partnership.

Answer : d.economic entity.

2. Which of the following groups sets the accounting stanndards used in South Africa.

Answer : d.GAAP.

3.  Who ultimately has responsibility for a company's financial statements?

Answer : b.management.

4. For accounting information to be useful for decision making, it must be:

Answer : c.both relevant and a faithful representation.

5. The first in ethical decision making, based on financial information is to:

Answer : a.list the alternatives and evaluate the impact of each on those who may be affected.

6. The primary purpose of financial reporting is
Answer : a to help users reach decisions in an informed manner.

7. The accounting characteristics that allows for comparisons to be made within a single company.

Answer : b.consistency.

8. All of the following characteristics make accounting information useful except:

Answer : d.All of the above are characteristics of useful accounting information.

9. All of the below are examples of current assets except :

Answer : c.land.

10. A company has an obligation due in 2016. On a statement of financial position prepared at the end of 2012, the obligation should
be classified as:

Answer : c.a long term liability.