Test your understanding questions

Chapter 1 - Historical Development of Accounting

Q1. What are the main objectives of record keeping during the age of record
keeping?
I.
II.
III.
IV.

To record all the income and expenses

To record all assets and liabilities
Remind owners of the quantities of stores held
Enable owners to control the activities of their stewards.

A - I & II
B - II & III
C - III & IV
D- All of the above.
Q2. What are the functions of early written accounting records?
I.
Early records were intended to keep a check on workers
II.
To prevent fraud and misappropriation
III.
Emphasis was just on integrity and accountability
IV. As a basis of performance measurement.
A - I & II
B - I, II & III
C - None of the above
D- All of the above.
Q3. Which are the pre-conditions necessary for the emergence of an orderly
accounting system?
I.
II.
III.
IV.

writing, arithmetic,
private property, commerce,
capital investment, money
credit transactions

A - I & II
B - I, II & III
C - None of the above
D- All of the above.

Q 4. What are the recommendations made by Pacioli in his Summa to the

accounting practices?

I.
II.
III.
IV.

Values of all assets and liabilities need to be entered in the merchants books.
Operations are recorded, first in memorandum then expressed as DR and CR in
journal before recording in ledger.
Ledger for :assets, liabilities, capital, income and expenses, SPL and SFP items.
Year end closing entries and trial balance.

A - I & II
B - I, II & III
C - None of the above
D- All of the above.
Q5. During the Age of Stagnation why were businesses slow to adopt the double
entry system?
I Lack of understanding of double entry
II- Most businesses were operated in small scale.
III Businesses were used to single entry system
IV Double entry system needs to separate ownership and management
A - I & II
B - I, II & III
C - None of the above
D- All of the above.
Q6. During the Age of Scientific accounting many of the practices accountants
use today was determined in this era as a result of business failure and loss of
shareholders confidence. What are the reasons contributing to this?
IIIIIIIV-

No clear accounting standards were established.

Creative Accountings were common.
What and how to report to investors was left up to the managers to decide.
No audit was required.

A - I & II
B - I, II & III
C - None of the above
D- All of the above.