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Quiz 5
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Q.1
Identify the asset from the following
Cash and cash equivalent
Creditors
Notes payable
Bank loan
Q.2
______ is the withdrawal of cash and goods by the owner of the business for his/her personal use
Depreciation
Drawings
Outflow of cash
Appreciation
Q.3
Which of the following specialized journal records "goods returned by customers"?
Purchase journal
Sales journal
Purchase return journal
Sales return journal
Q.4
Journals are also referred to as
Book of entries
Book of original entries
T account
Book of economic events
Q.5
An asset must be ________ by the business to be shown as an asset in its balance sheet.
Possessed
Owned
Controlled
Used
Q.6
Which is the most important characteristic that all assets of a business have?
Long life of assets
Value of assets
Intangible nature of assets
Future economic benefits
Q.7
________ is the first phase of accounting cycle
Identifying an economic event or transaction
Preparing Journal
Posting entries to Ledger accounts
Making decisions about business
Q.8
______ is a separate legal entity whose total capital can be divided into many shares
Partnership
Sole Proprietorship
Company
Non-profit organization
Q.9
Identify the correct sequence of accounting process
Communicating -> Recording -> Identifying
Recording -> Communicating -> Identifying
Identifying -> Communicating -> Recording
Identifying -> Recording -> Communicating
Q.10
Bookkeeping mainly consists of which part of accounting process?
Analysing
Preparing financial statements
Recording financial information
Auditing the books of accounts
Q.11
Net income equal to Revenues minus
Gains
Depreciation
Expenses
Capital expenditure
Q.12
Payment of expenses will ______ the assets
Increase
Reduce
Apportion
Overstate
Q.13
Net loss occurs when
Expenses are greater than income
Expenses are less than income
Expenses = Income
Liabilities are greater than income
Q.14
Double entry implies that
Recording entries in Journal
Recording entries in Ledger account
Recording two aspects of every transaction
Recording every transaction in books
Q.15
What is the basic accounting equation?
Capital + Liabilities = assets
Assets + Liabilities = Capital
Capital + Assets = Liabilities
Liabilities - Capital = Assets
Q.16
Which of the following is a liability?
Cash
Equipment
Debtors
Creditors
Q.17
An asset possesses which of the following?
Future economic benefits for the business
All kinds of benefits for the business
Expenses for the business
Merits & Demerits for the business
Q.18
Liabilities are which of the following?
Resources
Obligations
Future benefits
Expenses
Q.19
Auditing refers to
Reporting the financial information
Examination of financial information
Preparation of financial statements
Maintaining the ledger accounts
Q.20
Which of the following is the external user of financial statements?
Manager of the business
CEO of the business
Creditor of the business
Controller of the business
Q.21
The following is (are) the type(s) of Journal
Purchase Journal
Sales Journal
Cash Journal
All of the above
Q.22
Sales expenditure budget is prepared by estimating the expense(s) of
Advertisement
Market analysis
Salesman's salary
All of the above
Q.23
Budgeting is difficult to apply in the following cases
Products subjected to rapid changes
Job order manufacturing
Uncertain market condition
All of the above
Q.24
Liquid or Quick assets =
Current assets - (Stock + Work in progress)
Current assets + Stock + Work in progress
(Current assets + Stock) + Work in progress
(Current assets + Work in progress) - Stock
Q.25
Lower the Debt Equity ratio
Lower the protection to creditors
Higher the protection to creditors
It does not affect the creditors
None of the above
Q.26
What is equity?
Cash from the business
Liability of a business
Owner's claim on total assets
Owner's claim on total liabilities
Q.27
_______ is the gross inflow of economic benefits
Assets
Liabilities
Income
Expenses
Q.28
Which of the following is the internal user of financial statements?
Creditor of the business
Government agency
Shareholder of the business
Manager of the business
Q.29
The process of entering all transactions from the Journal to Ledger is called
Posting
Entry
Accounting
None of the above
Q.30
The following is a statement showing the financial status of the comapany at any given time
Trading account
Profit & Loss statement
Balance Sheet
Cash Book
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