Chapter 1

What is accounting?

What name is given to the system that accountants use to record information?

What are the three basic questions that the owner of a business might ask?

What economic event happened in the United Kingdom during the eighteenth century?

What happened to the ownership and management of businesses during the nineteenth century?

Why did managers in nineteenth-century industrial entities require more detailed information?

List three user groups of accounting information.

What are the six main branches of accounting?

Of which main branch of accounting does cost accounting form a part?

What is the difference between 'bookkeeping' and 'cost bookkeeping'?

Explain the difference between 'bankruptcy' and 'liquidation'.

List the six major UK professional accountancy bodies.

Name three subdivisions of the profit-making sector of the United Kingdom.

What is meant by 'limited liability'?

Name one quasi-governmental body.

Complete the following sentences: 1 The word _______ in everyday language means an explanation or a report. 2 Traders in the fifteenth century began to adopt a system of __________ to record information. 3 The owners of a business want to know how much _______ a business has made. 4 An _______ is a term used to describe any type of organisation.

State whether each of the following statements is true or false: 1 An auditor's job is to find out whether a fraud has taken place. True/false 2 Management accounts are required by law. True/false 3 Tax avoidance is lawful. Truelfalse 4 A statement of financial position is a list of assets and liabilities. Truelfalse 5 Companies have to go into liquidation if they get into financial difficulties. True/ false