NAME : ATHMANI AMOR
CFC BOUMERDES
GROUP: G43
ANSWER ACTIVITY
Activity 01: True (T) or False (F)
1. The three steps in the accounting process are identification, recording, and
communication.
o Answer: True (T)
o Explanation: These are indeed the fundamental steps in the accounting
process. It starts with identifying transactions, then recording them, and finally
communicating the information through financial reports.
2. Bookkeeping encompasses all steps in the accounting process.
o Answer: False (F)
o Explanation: Bookkeeping only involves recording transactions. The full
accounting process also includes analyzing and communicating financial
information.
3. Accountants prepare, but do not interpret, financial reports.
o Answer: False (F)
o Explanation: Accountants do more than just prepare reports; they also
interpret them to provide insights and guidance for decision-makers.
4. The two most common types of external users are investors and company
officers.
o Answer: False (F)
o Explanation: External users generally include investors and creditors, whereas
company officers are considered internal users.
5. Managerial accounting activities focus on reports for internal users.
o Answer: True (T)
o Explanation: Managerial accounting is specifically designed to provide
information to managers within the company for decision-making purposes.
6. Accountants' ability to analyze and forecast data and reported information in
financial statements.
o Answer: True (T)
o Explanation: Accountants are indeed trained to analyze and forecast financial
data, which is essential for effective planning and decision-making.
7. Accounting is recording transactions or business deals, such as purchases and
sales, and auditing them in the form of financial statements.
o Answer: True (T)
o Explanation: Accounting includes recording transactions and may also
involve auditing to ensure the accuracy of the financial statements.
8. Management information system is the process of recording financial
transactions and keeping financial records.
o Answer: False (F)
o Explanation: A Management Information System (MIS) is broader than just
financial transactions; it encompasses overall business information
management.
9. Financial accounting is internal decision makers use information provided about
operating, investing, and financing activities.
o Answer: False (F)
o Explanation: Financial accounting is mainly for external users to assess a
company’s financial performance, while internal decision-makers use
managerial accounting.
10. Accountants focus on the needs for financial information, whether the decision
makers are inside or outside a business or other economic entity.
o Answer: True (T)
o Explanation: Accountants cater to the financial information needs of both
internal and external users to aid informed decision-making.
Activity 02: Multiple-Choice Questions
1. The three types of business entities are:
o Answer: (b) proprietorships, partnerships, and corporations.
o Explanation: These are the primary forms of business organization, differing
in terms of ownership structure and liability.
2. Net income will result during a time period when:
o Answer: (d) revenues exceed expenses.
o Explanation: Net income is achieved when total revenues surpass total
expenses in a given period.
3. Performing services on account will have the following effects on the components
of the basic accounting equation:
o Answer: (b) increase assets and increase owner’s equity.
o Explanation: When services are performed on account, accounts receivable
(an asset) increases, and revenue (which increases owner’s equity) is
recognized.
4. As of December 31, 2017, Chehaoui Company has assets of $3,500 and owner’s
equity of $2,000. What are the liabilities for Chehaoui Company as of December
31, 2017?
o Answer: (a) $1,500.
o Explanation: According to the accounting equation (Assets = Liabilities +
Owner’s Equity), Liabilities = $3,500 - $2,000 = $1,500.
5. Which of the following is not included in fixed assets?
o Answer: (d) cash.
o Explanation: Cash is a current asset, not a fixed asset. Fixed assets typically
include items like equipment, machinery, and buildings.
6. The accounting equation has two sides of the equation that must always be...
o Answer: (c) equal.
o Explanation: The fundamental accounting equation (Assets = Liabilities +
Owner’s Equity) must always balance.
7. Its obligations are amounts owed to suppliers for goods or services bought on
credit...
o Answer: (c) Payable.
o Explanation: Accounts payable represent the amounts a company owes to
suppliers on credit.
8. ...an owner of shares in a company.
o Answer: (b) stakeholder.
o Explanation: A stakeholder is anyone with an interest in the company,
including shareholders who own shares.
9. An item of property owned by a person or company, regarded as having value
and available to meet debts.
o Answer: (a) assets.
o Explanation: Assets are resources owned by a business that have value and
can be used to cover debts.
10. A thing for which someone is responsible, especially an amount of money owed.
o Answer: (d) liabilities.
o Explanation: Liabilities are the debts or financial obligations of a business.