Accounting Business activities is one of the core pieces of modern society, and every trade, transaction, or economic activiy has some financial infomation attached to it, the recording, processing, measurement, communication of those financial information are essential to stakeholders, accounting is invented and evolved mainly for that purpose, and it has been called the "language of business". To understand and master this "language" is just like obtaining the key to enter the world of business and economic activities.
The accounting process includes summarizing, analyzing and reporting financial transactions to oversight agencies, regulators and tax collection entities, the resulting reports are termed as financial statements, which are used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position and cash flows.
Types of Accounting According to various purposes, accounting can be grouped in three categories, they are Financial Accounting, Managerial Accounting and cost accounting.
Financial Accounting, it is to gnerate the most commonly used documents, the results of all financial transactions that occur during an accounting period are summarized into the balance sheet, income statement and cash flow statement.
Managerial Accounting, its main focus is to help a business's management team to make managemnt decisions about how the business shall operates.
Cost Accounting, cost accounting helps businesses make decisions about costing.
The test helps to check your basic understanding and knowledge of accounting.
Accounting Test Sample Questions
Q1. A prepaid expense is:
A. an Asset
B. Owner's Equity
C. a Liability
Q2. Is LIFO/FIFO a method of:
A. Inventory Evaluation
B. Profit Ratio
Q3. Which accounting system most accurately reflects profitability?
A. Cash Accounting
B. Flow of Funds Accounting
C. Accrual Accounting
Q4. Which one of the following items is not found on a Balance Sheet?
B. Gross Profit
Q5. Which would you find on an Income Statement?
Answers Are :
B. Fixed Asset
Q1 (A), Q2 (A), Q3 (C), Q4 (B), Q5 (A),