Financial Accounting Quiz

Multiple Choice

1. What is the primary purpose of financial accounting? A. To provide financial information to investors and creditors B. To provide financial information to management C. To provide financial information to the public D. To provide financial information to the government

2. How does financial accounting differ from managerial accounting? A. Managerial accounting focuses on the past, while financial accounting focuses on the future B. Managerial accounting focuses on internal decisions, while financial accounting focuses on external decisions C. Managerial accounting focuses on the present, while financial accounting focuses on the past D. Managerial accounting focuses on the present, while financial accounting focuses on the future

3. What is the primary goal of financial accounting? A. To provide financial information to investors and creditors B. To provide financial information to management C. To provide financial information to the public D. To provide financial information to the government

True/False

1. Financial accounting is used to make decisions about the future. A. True B. False

2. Financial accounting is used to make decisions about the present. A. True B. False

3. Financial accounting is used to provide financial information to the public. A. True B. False

Fill-in-the-Blank

1. The primary purpose of financial accounting is to provide ___________ information to investors and creditors.
2. The primary goal of financial accounting is to provide ___________ information to the public.

Short Answer

1. What are the four main financial statements used in financial accounting?
2. What is the difference between financial accounting and managerial accounting?

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Financial Accounting Practice Sheet

1. What is the definition of financial accounting?

Financial accounting is the process of recording, summarizing, and reporting financial transactions of a business to external users such as investors, creditors, and tax authorities. It provides an accurate and timely picture of the financial position of a business.

2. What are the four basic financial statements?

The four basic financial statements are the balance sheet, income statement, statement of changes in equity, and statement of cash flows.

3. What is the difference between a debit and a credit?

A debit is an entry on the left side of an accounting ledger that increases an asset or expense account, or decreases a liability or equity account. A credit is an entry on the right side of an accounting ledger that increases a liability or equity account, or decreases an asset or expense account.

4. What is the purpose of an income statement?

The purpose of an income statement is to show a company's revenues, expenses, and net income over a period of time. An income statement can be used to measure the performance of a company and to compare it to other companies in the same industry.

5. What is the difference between a cash flow statement and a balance sheet?

A cash flow statement shows the inflows and outflows of cash over a period of time, while a balance sheet shows the assets, liabilities, and equity of a company at a given point in time.

6. True or False: Financial accounting is used to make decisions about the future of a business.

True