1 An Introduction To The Role Of The Accountant In Business

Question 1

What is the primary responsibility of an accountant?

Answer 1

Providing reliable and relevant information for various stakeholders

This includes preparing financial statements, auditing, and ensuring timely submissions of tax returns.

Question 2

What process checks whether financial statements provide a true and fair view of financial performance?

Answer 2

Auditing

Auditing is crucial for verifying the accuracy of financial statements.

Question 3

List three responsibilities of an accountant.

Answer 3

• Preparing financial statements
• Introducing accounting procedures for new businesses
• Producing budgets for businesses

Question 4

What is the focus of management accounting?

Answer 4

Planning, control, and decision making

Management accounting is prepared for internal use within the business.

Question 5

Who are the primary stakeholders for financial accounting?

Answer 5

External stakeholders, mainly shareholders, government (HMRC), banks, and potential investors.

Question 6

What are examples of financial statements?

Answer 6

• Income statement
• Statement of financial position
• Statement of cash flows
• Annual report

Question 7

What is the main distinction between management accounting and financial accounting?

Answer 7

Management accounting is for internal use, while financial accounting is for external stakeholders.

Question 8

What is a key task of bookkeepers?

Answer 8

Recording day-to-day business transactions

This includes maintaining accounting records and entering transactions in ledgers.

Question 9

Fill in the blank: Management accounting provides information for _______ rather than external stakeholders.

Answer 9

internal

Question 10

True or False: Financial accounting focuses on future financial performance.

Answer 10

False

Financial accounting uses historical information to prepare financial statements.

Question 11

What does the control aspect of management accounting include?

Answer 11

Standard costing and calculating variances

This helps in monitoring performance against budgets.

Question 12

What type of costing may be used in short-term decision making?

Answer 12

Marginal costing

Question 13

What are the responsibilities of accountants regarding financial statements?

Answer 13

Preparation of financial statements such as income statements and statements of financial position.

Question 14

Fill in the blank: Bookkeepers may assist in the preparation of financial statements by preparing the _______.

Answer 14

trial balance

Question 15

What are bookkeepers also known as?

Answer 15

Ledger clerks

Although their roles are not identical.

Question 16

What is the primary responsibility of bookkeepers?

Answer 16

Recording all financial transactions in the books of prime entry and the ledgers.

Question 17

What part of the accounting system do ledger clerks typically deal with?

Answer 17

One part, such as accounts receivable or accounts payable.

Question 18

What are accountants responsible for preparing?

Answer 18

The income statement and the statement of financial position.

Question 19

What must accountants ensure regarding financial statements?

Answer 19

Accounting concepts have been applied and they show a true and fair view of the business.

Question 20

In some businesses, who may prepare the financial statements?

Answer 20

The bookkeeper.

Question 21

Who are auditors appointed by?

Answer 21

The directors of limited companies.

Question 22

What is the role of auditors?

Answer 22

To independently check the financial statements prepared by accountants.

Question 23

To whom do auditors report their findings?

Answer 23

The shareholders.

Question 24

True or False: Auditors confirm whether financial statements provide a ‘true and fair’ view.

Answer 24

True