NAME: ………………………………………………………………………
COURSE TITLE/ CODE.: ………………………………………………………….
INDEX NO.: ……………………………………………………………………
QUIZ 1 (ANSWER ALL QUESTIONS)
Q1. What is accounting?
Q2. The main objective of accounting is to:
A. Record cash transactions B. Attract investors
C. Provide financial information for decision making D. Reduce staff
Q3. Which of these is a characteristic of financial accounting?
A. It is for internal use only B. It includes only budgets
C. It focuses on past financial performance D. It is done monthly only
Q4. The process of keeping financial records is known as:
A. Auditing B. Forecasting
C. Bookkeeping D. Budgeting
Q5. Mention three (3) users of accounting information.
Q6. Which of the following is a limitation of accounting?
A. Easy to prepare B. Records only quantitative information
C. Records non-monetary transactions D. Prevents fraud
Q7. State Three (3) qualitative characteristics of accounting information?
Q8. Accounting helps stakeholders by:
A. Predicting weather B. Measuring non-financial information
C. Providing accurate financial reports D. Planning holidays
Q9. Financial statements are primarily prepared for:
A. Employees B. Internal use only
C. External and internal stakeholders D. Only the government
Q10. What is the Difference between the following;
Financial Accounting and
Management Accounting
Q11. The accounting function that deals with planning and control is:
A. Financial accounting B. Tax accounting
C. Management accounting D. Forensic accounting
Q12. Which of these is not a financial statement?
A. Balance Sheet B. Income Statement
C. Cash Flow Statement D. Ledger
Q13. Who is considered the father of accounting?
A. Warren Buffett B. Luca Pacioli
C. Benjamin Franklin D. Adam Smith
Q14. Define the following.
Assets
Liabilities and
Equity (Capital)
Q15. Which of the following is a qualitative characteristic of accounting information?
A. Price B. Reliability
C. Cost D. Size
Q16. What is the basic accounting equation?
A. Assets = Liabilities – Equity B. Liabilities = Assets + Equity
C. Assets = Liabilities + Equity D. Equity = Assets + Liabilities
Q17. If assets are GH₵12,000 and liabilities are GH₵5,000, what is equity?
A. GH₵7,000 B. GH₵17,000
C. GH₵12,000 D. GH₵5,000
Q18. If the owner invests more cash in the business, the accounting equation will:
A. Remain the same B. Increase assets (Cash) and increase Capital
C. Increase liabilities and Decrease Equity D. Decrease Capital and Increase in Assets (Cash)
Q19. A loan from a bank will affect which parts of the accounting equation?
A. Increase in (Loan) only B. Increase in Bank and Increase in Loan
C. Decrease in capital and Increase in Loan D. Increase in expenses and Decrease in (Bank)
Q20. If the business pays off part of a loan to the bank, it will:
A. Increase liabilities and decrease in equity
B. Decrease liabilities (Loan) and decrease assets (Bank)
C. Increase equity and Increase in assets (bank)
D. Increase assets and Increase in assets (bank)
Q21. Owner withdraws GH₵1,000 from business. The equation will:
A. Decrease assets (bank) and decrease Equity (drawings)
B. Increase liabilities and Decrease Asset (bank)
C. Increase assets (bank) and Increase Equity (drawings)
D. No change
Q22. If a business purchases office furniture on credit:
A. Assets increase (furniture); liabilities increase (creditors)
B. Assets decrease (furniture); liabilities increase (creditors)
C. Equity increases; Assets Increases (furniture)
D. Liabilities decreases (creditors); Assets decreases (furniture)
Q23. A company purchased inventory worth $30,000 by paying $10,000 in cash and financing
the rest through a bank loan. If before the purchase, the company had $40,000 cash and no
liabilities, Find the new value of assets, liabilities, and Calculate owner’s equity (Capital)?
(Using the formula “Capital (Equity) = Assets – Liabilities”)
Q24. If liabilities are GH₵6,000 and equity is GH₵4,000, what is the value of assets?
A. GH₵10,000 B. GH₵2,000
C. GH₵4,000 D. GH₵6,000
Q25. The company started with $60,000 cash and equipment worth $40,000. It buys inventory
for $20,000 on credit, pays salaries $5,000 cash, and the owner withdraws $3,000 cash. Calculate
Equity. (Using the formula “Capital (Equity) = Assets – Liabilities”)
Q26. If a business receives cash from a customer for a previous credit sale:
A. Assets increase (cash); Liabilities decreases (creditors)
B. No effect on the equation
C. One asset increases (cash); another decreases (debtors)
D. Equity increases (capital); Asset increases (cash)
Q27. Which of these causes a decrease in owner’s equity?
A. Capital introduced B. Sales
C. Drawings D. Loan received
Q28. Which one does not affect the accounting equation?
A. Paying wages B. Owner investing cash
C. Buying goods on credit D. Transferring funds between cash and bank
Q29. Define the following;
Tangible and
Intangible Fixed Assets.
Q30. Which of the following increases both an asset and a liability?
A. Buying a car for cash B. Taking a loan
C. Paying off a supplier D. Recording depreciation
