The use of artificial intelligence (AI) in accounting is currently transforming: MCQ with Answer and Explanation

The use of artificial intelligence (AI) in accounting is currently transforming:

A. Automated invoice processing and anomaly detection

B. The abolition of all taxes

C. The legal definition of a company

D. The basic accounting equation

Answer: Option A

Solution (By JKExamLibrary)

AI automates routine tasks like data entry and enhances fraud detection by recognizing patterns (anomalies) faster than human auditors.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

A: The Current Ratio is a liquidity ratio. R: It measures the ability to pay off long-term debts. Choose the correct option.

A. Both A and R are true but R is NOT the correct explanation of A

B. A is true but R is false

C. A is false but R is true

D. Both A and R are true and R is the correct explanation of A

View Answer & Solution Discuss

Correct Answer: Option B

Explanation:
The Current Ratio is indeed a liquidity ratio. However, it measures short-term liquidity (ability to pay current liabilities), not long-term debts (which is measured by solvency ratios like Debt-Equity). A is true, R is false.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2 Report Error

S1: Goodwill is an intangible asset. S2: Goodwill can be self-generated and recorded in the books of accounts. Which statement(s) is/are correct?

A. Neither S1 nor S2

B. S2 only

C. S1 only

D. Both S1 and S2

View Answer & Solution Discuss

Correct Answer: Option C

Explanation:
Goodwill is an intangible asset representing the firm's reputation. However, AS 26 prohibits the recognition of self-generated goodwill in the balance sheet; only purchased goodwill can be recorded. S1 is correct, S2 is incorrect.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping