Financial accounting provides financial information to all of the following external users except:

Related Mcqs:

1. Which of the following can be considered as the most important phase of accounting cycle and it is the primarily objective of financial accounting?

   A. Identifying transactions
   B. Preparing “T Accounts”
   C. Preparing financial statements
   D. Preparing trial balances

2. The accounting process of gradually converting the unexpired cost of fixed assets into expenses over a series of accounting periods is_________?

   A. Depreciation
   B. Physical deterioration of the asset
   C. Decrease in market value of the asset
   D. Valuation of an asset at a point of time

3. Average Accounting Return is a measure of accounting profit relative to:

   A. Book value
   B. Intrinsic value
   C. Cost
   D. Market value

4. Which of the following is the external user of financial statements?

   A. Manager of the business
   B. CEO of the business
   C. Creditor of the business
   D. Controller of the business

5. For which step of accounting process the accountants of business entity prepare financial statements?

   A. Identification of economic event
   B. Communication of financial information
   C. Recording financial information
   D. Making decisions about business

6. Keeping the log of financial information in books of original entries is called__________?

   A. Recording
   B. summarizing
   C. Grouping
   D. Processing

7. Which of the following is an external cause of depreciation?

   A. Routine repair and maintenance
   B. Misuse
   C. Obsolescence
   D. Wear and tear

8. Which of the following accounts are closed at the end of an accounting period?

   A. Nominal accounts
   B. Balance sheet accounts
   C. Real accounts
   D. None of them

9. Which of the following is the practical implementation of the accounting equation?

   A. Cash flow statement
   B. Income statement
   C. Statement of changes in equity
   D. Statement of financial position

10. Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date?

    A. Income Statement
    B. Balance Sheet
    C. Cash Flow Statement
    D. Retained Earning Statement