1. Which of the following is the most appropriate definition of accounting? (a)
ID: 2411408 • Letter: 1
Question
1. Which of the following is the most appropriate definition of accounting? (a) The information system that identifies, records, and comm organization to interested users (b) a means of collecting information (e) The interconnected network of subsystems necessary to unicates the economic events of an td electronic collection, organization, and communication of vast amounts of information 2. A business organized as a separate legal entity is a (a) corporation. (b) proprietorship. (c) government unit. (d) partnership. 3. Buying assets needed to operate a business is an example of a(n) (a) purchasing activity. (b) financing activity. (c) investing activity. (d) operating activity. 4. Cost of goods sold is a(n) (a) liability (b) financing activity. (c) asset. (d) expense. 5. Which one of the following is not a qualitative characteristic of useful accounting information? (a) relevance (b) verifiability (c) going concern (d) comparability 6. Which of the following is not an enhancing qualitative characteristic? (a) verifiability (b) faithful representation (c) comparability (d) timeliness 7. Which one of the following is a fundamental qualitative characteristic? (a) relevance (b) timeliness (c) understandability (d) comparabilityExplanation / Answer
Answer for 1)
My answer is (a) as the accounting means noting else but way of communication the useful financial information for interested users.
Answer for 2)
My answer is (a).It is because a corporation is noting but a Incorporated company which is a artificial person and have separate legal status I.e the company shareholders cannot be sued.
Answer for 3)
My answer is (c).Buying assets refers to investing in business and hence termed as investing activities.
Answer for 4)
My answer is (d). An cost of goods is the expense that we pay for obtaining good.
Answer for 5)
My answer is (c).It is fundamental accounting assumption but not qualitative characteristic.
Answer for 6)
My answer is (b). Enhancing qualitative characteristic are verifiability, comparability, timeliness, relevance.
Answer for 7)
My answer is (c). Fundamental qualitative characteristics of understanbility and faithful representation.
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