Accounting 1. What are the two fundamental qualitative characteristics of financial information? Relevance and reliability Faithful representation and understandability Comparability and consistency Relevance and timeliness 2. What are the elements of the accounting equation? Assets, Liabilities, and Equity Assets, Liabilities, and Revenue Assets, Expenses, and Equity Assets, Expenses, and Revenue 3. Non monetary items which are carried in terms of historical costs denominated in a foreign currency should be reported using exchange rate at the date of the Balance sheets settlement closing date transaction 4. Which of the following is NOT an application of merchandising accounting? To prepare financial statements To make informed decisions about inventory levels To assess the financial performance of a business To prepare payroll 5. What are the main functions of financial management? Financial planning and analysis, capital budgeting, risk management, and control Financial accounting, management accounting, and auditing Investing, financing, and operating Borrowing, lending, and investing 6. What are the minimum number of promoters required to form a share company in Ethiopia? 5 3 2 1 7. Which of the following is NOT a quantitative threshold for identifying a reporting segment? Revenue Operating profit or loss Segment assets Segment liabilities 8. Beneficial’s are following type of economy the revenue from taxation is likely to be the least Free market economy Keynesian economy Mixed economy Socialist economics 9. What are the elements of the accounting equation? Assets, Liabilities, and Equity Assets, Liabilities, and Revenue Assets, Expenses, and Equity Assets, Expenses, and Revenue 10. What is the accounting principle that is applied to PPE assets? Matching principle Cost principle Revenue recognition principle Expense recognition principle 11. What are the three methods that can be used to measure investment property? Fair value, cost, and depreciated cost. Fair value, market value, and intrinsic value. Fair value, carrying value, and net realizable value. Fair value, cost minus accumulated depreciation, and cost minus accumulated depreciation and impairment losses. 12. The long term assets that have no physical existence but are right that are values known as current assets fixed assets intangible assets investments 13. What is the primary objective of cost allocation? To assign costs to cost objects in a way that is fair and accurate. To identify areas where costs can be reduced. To improve cost control. To make informed decisions about pricing, product development, and other business operations. 14. What is the first step in converting process costs into job costs? Identify the equivalent units of production for each job. Identify the total costs incurred during the production period. Compute the predetermined overhead rate. Record the job costs in the general ledger. 15. What is a consolidated financial statement? A financial statement that presents the combined financial position, financial performance, and cash flows of a parent company and its subsidiaries as if they were a single economic entity. A financial statement that presents the separate financial position, financial performance, and cash flows of a parent company and its subsidiaries. A financial statement that presents the financial position, financial performance, and cash flows of a parent company only. A financial statement that presents the financial position, financial performance, and cash flows of a subsidiary only. 16. What are the two main methods of accounting for joint ventures? Equity method and cost method. Fair value method and cost method. Matching method and accrual method. Equity method and fair value method. 17. What are the three main types of financial statements? The balance sheet, income statement, and statement of cash flows The statement of cash flows, statement of retained earnings, and statement of changes in equity The balance sheet, income statement, and statement of retained earnings The statement of changes in equity, income statement, and statement of cash flows 18. Which of the following statement measures the financial position of the entity on particular time? Income Statement Balance Sheet Cash Flow Statement Statement of Retained Earning 19. What is the accounting principle that is applied to PPE assets? Matching principle Cost principle Revenue recognition principle Expense recognition principle 20. Which of the following is NOT an application of merchandising accounting? To prepare financial statements To make informed decisions about inventory levels To assess the financial performance of a business To prepare payroll 21. What are the minimum number of promoters required to form a share company in Ethiopia? 5 5 3 2 1 22. What are the two main accounting methods for business combinations? Purchase method and pooling-of-interests method. Equity method and cost method. Fair value method and book value method. 23. What are the two main types of changes in foreign exchange rates? Appreciations and depreciations. Devaluations and revaluations. Floats and pegs. Nominal changes and real changes. 24. Which method of cash flow statement preparation is more transparent? Direct method Indirect method Both methods are equally transparent. It depends on the specific facts and circumstances. 25. When does a company recognize revenue from a sale on credit? When the goods or services are delivered to the customer. When the customer agrees to purchase the goods or services. When the customer pays for the goods or services. When the company is reasonably assured that it will collect the receivable. 26. What is the process of coordinating work activities with and through other people so that work activities are completed efficiently and effectively? Management Leadership Planning Organizing 27. What is competition-based pricing? A pricing strategy that sets prices based on what competitors are charging A pricing strategy that sets prices based on costs A pricing strategy that sets prices based on demand A pricing strategy that sets prices based on a combination of costs, demand, and competition 28. Financial Management is mainly concerned with_____ All aspects of acquiring and utilizing financial resources for firms activities Arrangement of funds Efficient Management of every business Profit maximization 29. What are product costs? osts that are incurred in the production of goods or services. Costs that are incurred as part of the operating cycle. Costs that are expensed in the period in which they are incurred. Costs that are capitalized and carried forward to future accounting periods. 30. What are the two main types of insurance contracts? General insurance and life insurance. Property insurance and liability insurance. Primary insurance and reinsurance. Individual insurance and group insurance. Time is Up! Time's up
