#1
Which of the following is a common accounting software?
QuickBooks
ExplanationPopular accounting software used for financial management.
#2
What is the primary function of accounting software?
Record financial transactions
ExplanationEnables the systematic recording of financial activities.
#3
Which of the following is a characteristic of cloud-based accounting software?
Accessible from any internet-enabled device
ExplanationAllows access to financial data from any device with internet connectivity.
#4
What is the purpose of the general ledger in accounting software?
To summarize all financial transactions
ExplanationCentralized record summarizing all monetary activities.
#5
Which of the following is a feature of accounting software?
Automatic data backup
ExplanationAutomatically backs up financial data for security and recovery.
#6
What does the term 'debit' represent in accounting?
An increase in assets
ExplanationEntry indicating an increase in assets.
#7
In accounting software, what is a journal entry?
A chronological record of financial transactions
ExplanationChronological log of monetary movements.
#8
Which account type is typically used for recording revenue?
Income
ExplanationCategory specifically for recording earned revenue.
#9
What does the term 'chart of accounts' refer to in accounting software?
A list of all accounts used by a business
ExplanationComprehensive list of accounts utilized by a company.
#10
Which financial statement is typically prepared first in the accounting cycle?
Trial balance
ExplanationInitial statement assessing the equality of debits and credits.
#11
Which financial statement shows a company's financial position at a specific point in time?
Balance sheet
ExplanationSnapshot of a company's financial health at a specific moment.
#12
What is the purpose of the 'closing entries' process in accounting software?
To transfer net income to retained earnings
ExplanationTransfers net income to the equity section of the balance sheet.
#13
What is the purpose of double-entry bookkeeping in accounting software?
To prevent errors in financial records
ExplanationEnsures accuracy by recording each transaction in two accounts.
#14
What is the purpose of accrual accounting in accounting software?
To record transactions when revenue is earned or expenses are incurred
ExplanationRecords revenue and expenses when earned or incurred, not when paid.
#15
Which of the following is an advantage of using accounting software over manual methods?
Faster processing of transactions
ExplanationSpeeds up the processing of financial transactions.
#16
What is the purpose of the 'adjusting entries' process in accounting software?
To adjust account balances for accruals and deferrals
ExplanationEnsures accurate representation of financial activities by adjusting account balances.
#17
What is the purpose of the 'financial ratio analysis'?
To assess a company's financial performance
ExplanationEvaluation of a company's financial health and performance using various ratios.