FREE AFC Basic Accounting Questions and Answers

Question 1

Which activity is covered in accounting information?

Accepted Answer

All of these

Answer

Accounting Function

Answer

Reporting Information

Answer

Identifying Information

Answer

Recording Information

Question 2

Earnings Per Share (EPS) is calculated by:

Accepted Answer

Net Profit / No. of Ordinary Shares Outstanding

Answer

Gross Profit / No. of Equity Shareholders

Answer

Gross Profit / No. of Ordinary Shares Outstanding

Answer

Net Profit / No. of Equity Shareholders

Question 3

Which of the following accounting practice, is the accounting practice of reporting less revenue and a lower asset amount:

Accepted Answer

Conservatism

Answer

Money Measurement

Answer

Cost convention

Answer

None of these

Question 4

What is the benefit of the accounting standards?

Accepted Answer

All of these

Answer

Facilitate comparison of financial statements

Answer

Eliminate confusing variations

Answer

Call for disclosure beyond that required by law

Question 5

Where do the financial transactions are first recorded?

Accepted Answer

Journals

Answer

Balance Sheet

Answer

Ledgers

Answer

Rough Sheet

Question 6

Which accounting method, recognizes and records revenue and expenses when the product or service is actually sold to customers?

Accepted Answer

Accrual Accounting

Answer

Debit Accounting

Answer

Cash Accounting

Answer

Credit Accounting

Question 7

Which financial statement, shows what a company owns and owes and its shareholders' equity?

Accepted Answer

Balance Sheet

Answer

Income Statement

Answer

Cash Flow Statement

Answer

None of these

Question 8

What do financial statements reflect?

Accepted Answer

All of these

Answer

Liquidity

Answer

Financial Position

Answer

Profitability

Question 9

Capital employed is equal to:

Accepted Answer

Fixed Assets + Current Assets - Current Liabilities

Answer

Fixed Assets - Current Assets - Current Liabilities

Answer

Fixed Assets + Current Assets + Current Liabilities

Answer

Fixed Assets - Current Assets + Current Liabilities

Question 10

What is the aim of accounting standards?

Accepted Answer

All of these

Answer

Lower the accounting dissimilarities

Answer

Standardize diverse accounting policies

Answer

Ensuring comparability of financial statements