POA Sec 3 Chap 1 Quiz
This deck covers key concepts from Chapter 1 of Principles of Accounts for Secondary 3, focusing on bookkeeping, stakeholders, accounting processes, and business structures.
Which of the following processes is considered bookkeeping?
Analysing
Recording
Reporting
Summarising
Reporting
Key Terms
Which of the following processes is considered bookkeeping?
Analysing
Recording
Reporting
Summarising
Reporting
A person who does not own a business but is given the responsibility to manage its resources is better known as the
customer
steward
investor
supplier
steward
Which of the following stakeholders is interested in all the financial information of a business?
Banks
Managers
Customers
Suppliers
Managers
Which of the following stakeholders is interested in the financial information of the business that assesses its ability to repay its debt?
Creditors
Government
Employees
Public
Creditors
Which of the following stakeholders is an internal stakeholder?
Customers
Creditors
Managers
Suppliers
Manager
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| Term | Definition |
|---|---|
Which of the following processes is considered bookkeeping? Analysing Recording Reporting Summarising | Reporting |
A person who does not own a business but is given the responsibility to manage its resources is better known as the customer steward investor supplier | steward |
Which of the following stakeholders is interested in all the financial information of a business? Banks Managers Customers Suppliers | Managers |
Which of the following stakeholders is interested in the financial information of the business that assesses its ability to repay its debt? Creditors Government Employees Public | Creditors |
Which of the following stakeholders is an internal stakeholder? Customers Creditors Managers Suppliers | Manager |
Accountants provide financial information to the owners of the business. The recording, summarising and reporting of the financial information is done through an _________ | accounting information system |
Accounting is a process of recording, __________, analysing, ____________ and reporting of financial information to the stakeholders of the business | summarising, interpreting |
The two roles of accounting are | stewardship and decision making |
A steward is a person who does not ________ the business but is given the responsibility to _______ its resources | own, manage |
Which stakeholder is interested whether the business is able to pay for it’s credit purchases | suppliers |
Which stakeholder is interested whether the business is worth continuing to invest in | investors or owners |
Which stakeholder is interested whether the business is able to provide salaries and career prospects | employees |
Which stakeholder is interested whether the business is able to provide after-sales support | customers |
What is accounting? | Process of recording, summarising, analysing, interpreting and reporting financial information |
What is the purpose of accounting? | Presents the financial information of an organisation in the form of financial reports, which are important to stakeholders for making business decisions |
What is the difference between accounting and bookkeeping? | Bookkeeping is recording of business transactions
Accounting is summarising, analysing, interpreting and reporting financial information |
Explain stewardship and how the stewardship role leads to the creation of an accounting system? | It is the responsibility of managing the resources of a business on behalf of the owners |
The two important ethics principles that guide the professional conduct of accountants are | integrity and objectivity |
To have ______ is to be straightforward and _________ in all professional and business relationships | integrity and honesty |
To be ________ is to be ___________ when making a professional judgement in the accounting process. | objective, unbiased |
Explain why it is important for accountants to have integrity and be objective | So that the financial reports prepared by them do not contain inaccurate or fake financial information |
Rahman is an accountant of a shoes trading firm. His boss threatens to dismiss him unless he reports higher sales revenue and profits so that the suppliers can extend more credit to the business. Rahman follows his boss instructions
Identify the professional ethics principle that Rahman has violated. | Objective, integrity principle |
Krishna started a speech therapy centre. He also sells professional books on speech development. What is the nature of his business. | Service and Trading |
| Pharmacy |
Explain the difference between a trading business and service business? | Trading business buys and sells goods
Service business provides a service |
What is a sole proprietorship? | Only one owner; owner usually manages the business himself and has full control in running the business; assumes all profits and losses of the business; needs to pay all debts of business if it fails |
What is a company? | One to fifty owners
shareholders usually not involved in running of the business
shareholders given a portion of the profits in the form of dividends
shareholders also assume limited investment risk |
State two advantages a company has over a sole proprietorship? | Limited investment risk, shareholders will only lose their investment
easier to raise funds,
easier to transfer ownership |
State two advantages a sole proprietorship has over a company? | More easily formed
fewer regulations
full control by owner
flexibility to withdraw capital and profits |