Quiz: TOA Accounting Concepts Test

24 Questions | By Cpama2ster2010 | Updated: May 7, 2022 | Attempts: 3714

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Quiz: TOA Accounting Concepts Test - Quiz

Accounting is an interesting concept. If you are a student of accountancy and want to test your knowledge regarding this subject, this 'TOA Accounting Test' is perfect for you. In this quiz, we will ask you MCQ questions based on basic accounting principles. If you answer all the questions correctly, it'll mean that you have a very strong accounts knowledge. So, do you feel ready to take this test? Good luck!

Questions and Answers

1.

Which of the following statements is/are true? I. Accounting is a service activity intended to fulfill a useful function in society II. Accounting involves the art of recording, classifying, and summarizing transactions and events, and interpreting the results thereof. III. Accounting is an art but not a science IV. Accounting provides quantitative financial information intended to be useful in making economic decisions
- A.
  
  I, II, III, IV
- B.
  
  I, II, III
- C.
  
  I, II, IV
- D.
  
  II, III, IV
2.

Name the branch of accounting that is concerned with the presentation of financial information primarily for use of the third person outside of the business enterprise.
- A.
  
  Financial Accounting
- B.
  
  Management Accounting
- C.
  
  Government Accounting
- D.
  
  All of the above
3.

Accounting is an art because:
- A.
  
  Of the existence of a body knowledge governing accounting practice
- B.
  
  Of accounting theory
- C.
  
  The necessity of applying creative skill and ability
- D.
  
  None of the above
4.

Financial accounting is the branch of accounting that focuses on:
- A.
  
  Special purpose reports of financial position and results of operations
- B.
  
  Financial statements
- C.
  
  The various need of statement users
- D.
  
  General purpose reports of financial position and results of operations
5.

General-purpose information is:
- A.
  
  Not intended to satisfy the specialized needs of individual users.
- B.
  
  Intended to satisfy the specialized needs of individual users
- C.
  
  Not intended to satisfy the common needs of individual users.
- D.
  
  Provided by managerial accounting.
6.

Which of the following is not true?
- A.
  
  Accounting is concerned primarily with quantitative information used by persons who must make economic decisions among alternative actions.
- B.
  
  Governmental accounting is also known as municipal or fund accounting
- C.
  
  The branch of accounting concerned with the presentation of financial information to assist management in planning and controlling operations is called managerial accounting.
- D.
  
  Financial accounting emphasizes special purpose information based on presumption that significant numbers of users need similar information.
7.

The body of rules and principles which govern accounting practices is referred to as
- A.
  
  Accounting practice
- B.
  
  Accounting principles
- C.
  
  Accounting concepts
- D.
  
  Accounting theory
8.

The layers of the structure of accounting theory include the following except:
- A.
  
  Methods and procedures
- B.
  
  Principles
- C.
  
  Measurement and recognition
- D.
  
  Postulates and conventions
9.

The basic assumption or premises on which accounting principles rest are called
- A.
  
  Accounting postulates
- B.
  
  Accounting procedures
- C.
  
  Accounting principles
- D.
  
  Accounting laws
10.

The normative attitudes or ideas of the accounting profession as to what ought to represent good accounting practice and which modify the application of accounting principles are known as:
- A.
  
  Accounting postulates
- B.
  
  Accounting conventions
- C.
  
  Accounting procedures
- D.
  
  Accounting principles
11.

The general guidelines used in accounting practice that are based on substantial authoritative support are called
- A.
  
  Accounting postulates
- B.
  
  Accounting conventions
- C.
  
  Accounting procedures
- D.
  
  Accounting principles
12.

The specific methods used by accountants in carrying out the general guidelines provided by GAAP, including the numerous rules specifying how financial data should be recorded, classified, summarized, and reported are referred to as:
- A.
  
  Accounting postulates
- B.
  
  Accounting conventions
- C.
  
  Accounting procedures
- D.
  
  Accounting principles
13.

“The accounting entity is assumed to be separate and distinct from other entities and from the owners, managers, and employees which constitute the firm”. This postulate is referred to as:
- A.
  
  Matching
- B.
  
  Going concern
- C.
  
  Historical cost
- D.
  
  Specific-separate-entity
14.

Unless there is specific evidence to the contrary, the firm will continue to be in existence in the foreseeable future. This postulate is referred to as
- A.
  
  Matching
- B.
  
  Going concern
- C.
  
  Historical cost
- D.
  
  Specific-separate-entity
15.

“Money is the best measuring unit of a firm’s assets, liabilities and equity, as well as changes therein; its instability is immaterial”. This postulate is referred to as
- A.
  
  Historical cost
- B.
  
  Revenue recognition
- C.
  
  Money-measuring unit
- D.
  
  Fiscal period
16.

“Cost is normally the proper money measurement of a firm’s assets, liabilities, and equity, and changes in them because it is objective, verifiable and convenient to obtain, approximating value at time of acquisition. “ This postulate is referred to as
- A.
  
  Historical cost
- B.
  
  Revenue recognition
- C.
  
  Money measuring unit
- D.
  
  Fiscal period
17.

“The life of a business firm can be segmented into short run time periods in order to provide timely financial information to aid in financial decision making; hence, periodic reporting implies the use of accrual accounting and use of estimates ( approximations) and informed judgment by accountants.” This postulate is referred to as
- A.
  
  Historical cost
- B.
  
  Revenue recognition
- C.
  
  Money measuring unit
- D.
  
  Fiscal period
18.

“The point of sale when goods are delivered or services are rendered, is the time at which revenue is to be recognized.” This postulate is referred to as
- A.
  
  Historical cost
- B.
  
  Revenue recognition
- C.
  
  Money measuring unit
- D.
  
  Fiscal period
19.

“Goods and services used (“expenses”) during the fiscal period can be associated with the revenue earned during the same fiscal period”. This postulate referred to as
- A.
  
  Matching
- B.
  
  Going concern
- C.
  
  Historical Cost
- D.
  
  Specific-separate entity
20.

“Exception to the application of accounting theory are permitted if the amount involve is not material; financial reporting is concerned only with information that is significant enough to affect evaluations or decisions.” This convention is called
- A.
  
  Conservatism
- B.
  
  Objectivity
- C.
  
  Consistency
- D.
  
  Materiality
21.

“The same accounting procedures for a given entity should be used from one period to the next. Changes may however be made if it will result in more accurate or useful information for decision making provided it disclosed”. The convention is called
- A.
  
  Conservatism
- B.
  
  Objectivity
- C.
  
  Consistency
- D.
  
  Materiality
22.

“Financial statements of different firms should be based on similar accounting principles and procedures in order to aid users of financial statements in finding similarities and differences among firms for purposed of financial decision making” This convention is called
- A.
  
  Consistency
- B.
  
  Comparability
- C.
  
  Objectivity
- D.
  
  Conservatism
23.

“Accounting measurement should be based on evidence that is verifiable by competent persons”. This convention is called
- A.
  
  Consistency
- B.
  
  Comparability
- C.
  
  Objectivity
- D.
  
  Conservatism
24.

“The accountant should recognize all possible losses but anticipate no profit. Where alternative courses of action are available, he should choose the alternative least favorable to owners’ equity.
- A.
  
  Consistency
- B.
  
  Comparability
- C.
  
  Objectivity
- D.
  
  Conservatism