Today, we will learn the Top “25” Questions and Answers-Introduction to Accounting.” If you read it from top to bottom with a proper focus, you’ll get a basic idea of the introduction to accounting.
It will also boost your knowledge of accounting and allow you to perform well on any competitive exam.
So let’s get started.
Questions and Answers- Introduction to Accounting
Question-01: What is accounting?
Answer: Accounting is the concept that helps us to record, identify, and summarize the financial transactions that ultimately help to determine an individual or institution’s overall financial condition.
Question-02: What are the objectives of accounting?
Answer: The objectives of accounting are as follows:
- To correctly record the transactions in the accounting books.
- To ascertain the financial situation and the outcome.
- Helps to record the expenses accurately and thus helps to reduce the cost.
- Helps to inform the stakeholder group of the financial condition and therefore takes over the decision correctly.
Question-03: What are the three (3) basic accounting activities?
Answer: The three (3) basic accounting activities are:
- Identification
- Recording and
- Communication
Question-04: Who is called the father of accounting?
Answer: Luca De Pacioli
Question-05: Who is Luca De Pacioli?
Answer: Luca De Pacioli is an Italian Mathematician. In 1494 he wrote a famous accounting book entitled ‘Summa de arithmetica, geometria, proportioniet proportionalita‘ (The Collected Knowledge of Arithmetic, Geometry, Proportion, and Proportionality).
Question-06: How do people maintain accounts in ancient times?
Answer: In ancient times, people maintain accounts by drawing lines and scratches on the cave’s stones.
Question-07: What are the managerial functions of accounting?
Answer: The managerial functions of accounting are as follows:
- Financial decision management and the formation of planning
- The budget planning
- Cost Control.
- Employee’s performance appraisal.
- Prevention of frauds and mistakes.
Question-08: What are the benefits of accounting?
Answer: The benefits of accounting are as follows:
- Finding profits and losses
- Exhibiting the financial situation
- Control of costs
- Tax and Vat Fixing
- Comparative analysis of the different information
- Prevention of fraud and falsity
Question-09: What is bookkeeping? And what is the principal objective of bookkeeping?
Answer: Bookkeeping is a part of the accounting process that only involves the recording of economic events. The principal objective of bookkeeping is the ascertainment of financial results.
Question-10: What are the branches of accounting?
Answer: The branches of accounting are as follows:
- Financial Accounting
- Cost accounting
- Management Accounting
- Tax Accounting
- Forensic Accounting, etc.
Question-11: What are the functions of bookkeeping?
Answer: The functions of bookkeeping are as follows:
- Identification and analysis of Transactions
- Journalizing the Transactions
- Posting transactions to the ledger.
Question-12: What phases are followed by bookkeeping in accounting cycles?
Answer: The phases are followed by bookkeeping in accounting cycles are
- Journalizing
- Posting to Ledger
Question-13: What is the difference between bookkeeping and accounting?
Answer: The difference between bookkeeping and accounting is as follows:
- Bookkeeping is the recording stage of an accounting system while Accounting is the summering stage of an accounting system
- Bookkeeping does not provide any managerial decision making information while accounting provides managerial decision making information.
Question-14: Accounting has created a relationship with which subjects?
Answer: Accounting has a relation with the following subjects:
- Management
- Economics
- Mathematics
- Computer science
- Statistics,
- Laws, etc.
Question-15: What is forensic accounting?
Answer: Forensic accounting is a field of accounting used to perform inquiries into theft and fraud using accounting, auditing, and forensic expertise.
Question-16: What is managerial accounting?
Answer: The accounting area that offers internal reports to help users make decisions about their businesses is managerial accounting.
Question-17: What is public accounting?
Answer: Public accounting is a field of accounting in which an accountant provides the general public with expert service.
Question-18: What is taxation?
Answer: Taxation is a public accounting field that involves tax advice, tax planning, tax returns preparation, and customer representation before government agencies.
Question-19: How many types of users of accounting information? And who are they?
Answer: There are two types of users of accounting information. These are like the following:
- Internal Users
- External Users
Question-20: Who are the internal users of accounting information?
Answer: The internal users of accounting information are as follows:
- Owners,
- Marketing Managers,
- Production Supervisors,
- Company officers,
- Internal Auditor, etc.
Question-21: Who are the external users of accounting information?
Answer: The external users of accounting information are as follows:
- Creditors,
- Investors,
- External Auditor,
- Financial Institution,
- Government,
- Regulatory Agencies,
- Labor Union etc.
Question-22: What is financial accounting?
Answer: Financial accounting is the accounting area that provides owners, creditors, and other external users with economic and financial information.
Question-23: What is accountancy?
Answer: Accountancy is the determination and implementation of accounting and bookkeeping concepts, theories, and processes.
Question-24: What is Auditing?
Answer: Auditing is the examination by a certified public accountant of financial statements to express an opinion on the presentation’s fairness.
Question-25: What is the full form of AAA, ACCA, AIA, AICPA, IASB, IFAC, and CPA?
Answer:
AAA= American Accounting Association
ACCA= Association of Chartered Certified Accountants
AIA= American Institute of Accountants
AICPA=American Institute of Certified Public Accountants
IASB= International Accounting Standards Board
IFAC= International Federation of Accountants
CPA= Certified Public Accountants
I hope, at the end of the article, you understand the introduction to accounting. Read these Top “25” Questions and Answers- introduction to accounting regularly and develop your accounting skills.
You can also read:
- Top 25 Questions and Answers-Accounting Transactions
- Top 25 Questions and Answers- Accounts
- Top 20 Questions and Answers-Double Entry System
