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Unit 1: Basic Accounting Review

1.9 Self Assessment Notes

Fill in the blanks:
1. Accounting records all the transactions which can be expressed either in ................. .

2. Every financial transaction of the business has ................. and recorded at two places.
3. ................. enables the comparison of the profit or performance of a business in a year with
the performance of another year.

4. The revenues are recognized only at the moment of ................. .
5. Book Value = Gross (Original) value of the asset ................. .
6. The ................. are the persons who owe to an enterprise an amount for receiving goods or
services on credit.
7. ................. is a liability which arises only on the happening of an uncertain event.
8. ................. = total assets – total liabilities
Multiple choice Questions
9. Three key activities of the accounting function are identifying transactions, recording
transactions, and communicating transactions. The proper order for these activities is
considered to be which of the following?
(a) Communicating, recording, and identifying.
(b) Recording, communicating, and identifying.
(c) Identifying, communicating, and recording.
(d) Identifying, recording, and communicating.

(e) None of the above
10. Which one of the following users of accounting information is considered to be an external
user of accounting information rather than an internal user of accounting information?

(a) Sales staff (b) Company managers
(c) Company customers (d) Officers and directors
(e) Budget officers

11. All of the following people can properly be called managers. Which one of the following
individuals is not considered an internal user of accounting information?
(a) Service manager

(b) Research and development manager
(c) Production manager
(d) Partner in CA firm charged with conducting the company’s external audit
(e) Human resources manager
12. A college student pays 150 cash for her textbook. In the student’s opinion, the textbook
is worth 50. In accounting, however, the value of the textbook is assumed to be and is

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