CA Financial Accounting & Reporting

Question 1

What is the primary purpose of financial accounting?

Accepted Answer

Inform external stakeholders

Answer

Manage HR policies

Answer

Track inventory movements

Answer

Control production

Question 2

Which statement shows a company's financial position?

Accepted Answer

Balance sheet

Answer

Income statement

Answer

Cash flow statement

Answer

Retained earnings

Question 3

What are revenues and expenses reported on?

Accepted Answer

Income statement

Answer

Statement of equity

Answer

Balance sheet

Answer

General ledger

Question 4

What is double-entry accounting?

Accepted Answer

Dual account entry

Answer

One-sided entry

Answer

Expense tracking

Answer

Monthly summaries

Question 5

Which principle requires reporting revenues when earned?

Accepted Answer

Revenue recognition

Answer

Cost principle

Answer

Conservatism

Answer

Matching principle

Question 6

Which financial report shows cash inflows and outflows?

Accepted Answer

Cash flow statement

Answer

Balance sheet

Answer

Trial balance

Answer

P&L report

Question 7

What does GAAP stand for?

Accepted Answer

Generally Accepted Accounting Principles

Answer

Generally Accountable Accounting Practices

Answer

General Allocation and Application Protocol

Answer

Government Accepted Accounting Practices

Question 8

What type of account is 'Accounts Receivable'?

Accepted Answer

Asset

Answer

Liability

Answer

Revenue

Answer

Equity

Question 9

Which method allocates cost of an asset over its useful life?

Accepted Answer

Depreciation

Answer

Accrual basis

Answer

Inventory turnover

Answer

Revaluation