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Financial Accounting > AQA QUESTION and MARK SCHEMES > ACCOUNTING: AN OVERVIEW AND ANALYSIS (All)

ACCOUNTING: AN OVERVIEW AND ANALYSIS

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1) Accountants refer to an economic event as a a. Purchase. b. Sale. c. Transaction. d. Change in ownership. Ans. (c) Transaction. 2) The process of recording transactions has become more efficient because a. Fewer events can be quantified in financial terms. b. Computers are used in processing business events. c. More people have been hired to record business transactions. d. Business events are recorded only at the end of the year. Ans. (b) Computers are used in processing business events. 3) Communication of economic events is the part of the accounting process that involves a. Identifying economic events. b. Quantifying transactions into dollars and cents. c. Preparing accounting reports. d. Recording and classifying information. Ans. (c) Preparing accounting reports 4) Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction? a. The appointment of a new CPA firm to perform an audit. b. The purchase of a new computer. c. The sale of store equipment. d. Payment of income taxes. Ans. (a) The appointment of a new CPA firm to perform an audit 5) The use of computers in recording business events a. Has made the recording process more efficient. b. Does not use the same principles as manual accounting systems. c. Has greatly impacted the identification stage of the accounting process. d. Is economical only for large businesses. Ans. (a) Has made the recording process more efficient 6) The accounting process involves all of the following except a. Identifying economic transactions that are relevant to the business. b. Communicating financial information to users by preparing financial reports. c. Recording no quantifiable economic events. d. Analysing and interpreting financial reports. Ans. (c) Recording no quantifiable economic events 7) The accounting process is correctly sequenced as a. Identification, communication, recording. b. Recording, communication, identification. c. Identification, recording, communication. d. Communication, recording, identification. Ans. (c) Identification, recording, communication

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