JUNE 05 2018 QUIZ 1 Answer True or False 1 A working knowled

JUNE 05, 2018 QUIZ\', 1 Answer True or False 1. A working knowledge of accounting can be useful to doctors or lawyers 2. Accounting information is used only by external users with a direct financial interest in a company. 3. A corporation may only be formed under the federal legislation. 4. Ethics are critical in the preparation of accounting information 5. GAAP stands for Generally Accepted Accounting Principles 6. Publicly Traded Corporations can choose to report under either ASPE or IFRS 7. In a partnership, all of the partners will generally have unlimited liability for the debts of the partnerships 8. The going concern assumption is the assumption that a company will NOT be successful in the foreseeable future 9. The reporting entity concept requires that an entity\'s business activities be combined with the activities of its owner for financial reporting purposes 10. Recognition is the process of recording a transaction in the accounting records. True 1. An account can have debit entries and credit entries.

Solution

1.False. Working knowledge of accounts is useful for accounting professionals

2.False. Accounting Information is used by all the external users- having interest, potential investors, competitors etc

5. Yes, GAAP stands for Generally Accepted Accounting Principles

7. Yes, All partners have unlimited liability

8.False. Going Concern says that the company will keep going for the forseeable future

9.False. It says that the results must be shown separate from its owners

10. True

11.True. For example – Asset when purchased is debited and credited when sold

12. False. All liabilites have credit balance

13.True. Debit to asset indicates purchase or increase

14.True

15.True. Different accounts are prepared for well organised accounts and easy analysis of information

16.False, Accounting cycle is the time period for which the accounts are prepared

17.True. Final Accounts are prepared from the ledgers

18.True. Reversing digits or error in recording

19.True

20.False, Transactions are recorded in chronological order in Journal