Financial statements differ from management account because

Related Mcqs:

1. Building account is classified as _________ account?

   A. Nominal
   B. Real
   C. Cash
   D. Capital

2. Office equipments account is classified as _________ account?

   A. Nominal
   B. Real
   C. Cash
   D. Capital

3. At the time of preparation of financial accounts, bad debt recovered account will be transferred to?

   A. Debtors A/c
   B. Profit & Loss A/c
   C. Profit & Loss Adjustment A/c
   D. Profit & Loss Appropriation A/c

4. Which of the following statements is incorrect regarding capital account?

   A. Debit increases the capital account balance
   B. Credit increases the capital account balance
   C. Fresh capital increases the capital account balance
   D. Net income increases the capital account balance

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

   A. Government agencies
   B. investors
   C. Creditors
   D. Managers

6. 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

7. 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

8. Which of the following is the internal user of financial statements?

   A. Creditor of the business
   B. Government agency
   C. Shareholder of the business
   D. Manager of the business

9. Which of the following is not classified as inventory in the financial statements?

   A. Finished goods
   B. Work-in-process
   C. Stores and spares
   D. Advance payments made to suppliers for raw materials

10. A journal entry in which two or more account is debited or credited is referred as____________?

    A. Journal entry
    B. Multi entry
    C. Additional entry
    D. Compound entry