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Quiz 6
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Q.1
The following is a statement of revenues and expenses for a specific period of time
Trading account
Trial Balance
Profit & Loss statements
Balance Sheet
Q.2
A Master Budget consists of
Sales budget
Production budget
Material budget
All of the above
Q.3
The accounting process involves recording
Quantifiable economic event
Non Quantifiable economic event
All of them
None of them
Q.4
In accounting, an economic event is referred to as
Cash
Bank statement
Transaction
Exchange of money
Q.5
Return on Investment Ratio (ROI) =
(Gross profit / Net sales) x 100
(Gross profit x Sales / Fixed assets) x 100
(Net profit / Sales) x 100
(Net profit / Total assets) x 100
Q.6
Balance sheets are prepared
Daily
Weekly
Monthly
Annually
Q.7
The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources
Liquidity ratio
Leverage ratio
Activity ratio
Profitability ratio
Q.8
The measure of how efficiently the assets resources are employed by the firm is called
Liquidity ratio
Leverage ratio
Activity ratio
Profitability ratio
Q.9
The sales income (Credit and Cash) of a business during a given period is called
Transactions
Sales Returns
Turnover
Purchase Returns
Q.10
Any written evidence in support of a business transaction is called
Journal
Ledger
Ledger posting
Voucher
Q.11
The account that records expenses, gains and losses is
Personal account
Real account
Nominal account
None of the above
Q.12
Balance sheet is a statement of
Assets
Liabilities
Capital
All of the above
Q.13
A low Return on Investment Ratio (ROI) indicates
Improper utilization of resources
Over investment in assets
Both A and B
None of the above
Q.14
The following is (are) the current liability (ies)
Bills payable
Outstanding expenses
Bank Overdraft
All of the above
Q.15
Current ratio =
Quick assets/Current liabilities
Current assets/Current liabilities
Debt/Equity
Current assets/Equity
Q.16
The term _______ is generally used for the depreciation of natural resources
Amortization
Depletion
Appreciation
Disposal value
Q.17
Which of the following is a biological asset?
Land
Building
Environment
Living plants and animals
Q.18
Real account records
Dealings with creditors or debtors
Dealings in commodities
Gains and losses
All of the above
Q.19
In Journal, the business transaction is recorded
Same day
Next day
Once in a week
Once in a month
Q.20
Accounting provides information on
Cost and income for managers
Company's tax liability for a particular year
Financial conditions of an institutions
All of the above
Q.21
The long term assets that have no physical existence but are rights that have value is known as
Current assets
Fixed assets
Intangible assets
Investments
Q.22
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
Current assets
Fixed assets
Intangible assets
Investments
Q.23
Provision for doubtful debts account is a/an
Asset account
Contra asset account
Nominal account
Liability account
Q.24
Provision for cash discount on debtors is a percentage of
Debtors
Net debtors
Net debtors less provision for doubtful debts
Net sales
Q.25
A recovery of bad debt
increases net income
decreases net income
increases gross profit
increases gross profit and net income
Q.26
A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debt ommission?
Net profit would decrease
Net profit would increase
Gross profit would overstate
Gross profit would understate
Q.27
Patents, Copyrights and Trademarks are
Current assets
Fixed assets
Intangible assets
Investments
Q.28
The debts which are to be repaid within a short period (year or less) are known as
Current liabilities
Fixed liabilities
Contingent liabilities
All of the above
Q.29
The value of inventories or stock is figured out at the lower of cost and
Purchase price
Opportunity cost
Realizable value
Net realizable value
Q.30
An overstatement in the value of closing stock overstates all of the following except
Net income
Current assets
Capital of the business
Cost of goods sold
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