Accounting - Study Mode

[#1861] On dissolution of a firm, the assets of firm are transferred to realization account at their
Correct Answer

(A) Book value

[#1862] Identify the correct sequence of accounting process
Correct Answer

(D) Identifying -> Recording -> Communicating

Explanation

Solution: Identifying -> Recording -> Communicating is the correct sequence of accounting process.

[#1863] Bookkeeping mainly consists of which part of accounting process?
Correct Answer

(C) Recording financial information

Explanation

Solution: Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Bookkeeping refers mainly to the record-keeping aspects of financial accounting, and involves preparing source documents for all transactions, operations, and other events of a business.

[#1864] Auditing refers to
Correct Answer

(B) Examination of financial information

Explanation

Solution: Auditing refers to Examination of financial information. A financial audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent.

[#1865] Which of the following is the external user of financial statements?
Correct Answer

(C) Creditor of the business

Explanation

Solution: Creditor of the business is the external user of financial statements. External users are people outside the business entity (organization) who use accounting information.