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Quiz 7
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Q.1
What does 'aged debtors analysis' signify?
shows how long debts have been outstanding
How old the customers are
How long does a business take to repay the bank loans
Minimum number of old debtors
Q.2
Which of the following is the most common cause of bad debt?
Debtor refusal to repayment
Debtor left the country
Debtor committed a crime
Debtor declared to be a bankrupt
Q.3
XYZ firm has imported a machine from abroad. Which of the following is NOT the element of the machine's cost?
Purchase price of machine
Import duty
Demmurage charges
Refundable tax
Q.4
Which of the following foxed assets is not depreciated in the ordinary circumstances?
Plant & Machinery
Building account
Land
Equipment's
Q.5
Which of the following is/are kind of depreciation expenses?
Amortization
Depletion
Both of them
None of the above
Q.6
In depreciation calculation, the useful life of a fixed asset is:
a certain figure
an estimate
a predetermined figure for all fixed assets
Q.7
When it is certain that a debt won't be recovered. Which of the following is correct?
Provision for bad debt is created
Account receivable is credited
Bad debts is credited
Sales is debited
Q.8
All of the following are the methods of inventory costing except
FIFO
LIFO
AVCO or average cost
Stock take
Q.9
Which accounting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements?
Accrual concept
Matching concept
Going concern concept
Prudence concept
Q.10
Which of the following is a commonly used base to create the provision for doubtful debts?
Total purchases
Total credit sales
Total current assets
Total current liabilities
Q.11
A company purchased a vehicle for Rs.6000. It will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of depreciation using straight line method of depreciation?
Rs. 1000
Rs. 2000
Rs. 3000
Rs. 5000
Q.12
Which of the following is the normal balance of an accumulated depreciation account?
Debit balance
Credit balance
Nil balance
Q.13
Current assets are also known as
Gross working capital
Invested capital
Assets
Cash
Q.14
The expenses related to the main operations of a business are referred to as
Administration expense
Non-administration expense
Selling expense
Operating expense
Q.15
In the calculation of depreciation, all of the following items are actually estimates except:
Useful life
Residual value
Historical cost
Salvage value
Q.16
Under which method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset?
Reducing balance method
Unit of activity method
Straight line method
None of these
Q.17
Depreciable amount + Residual value of a fixed asset = ?
Depreciation expenses
Accumulated depreciation
Cost of the fixed asset
Future economic benefits of a fixed asset
Q.18
Cost of a fixed asset - Accumulated depreciation expenses of the fixed asset = ?
Book value of a fixed asset
Market value of a fixed asset
Historical cost of a fixed asset
Recoverable amount if a fixed asset
Q.19
How trial balance shows the accumulated depreciation?
as a debit item
as a credit item
It doesn't show
Q.20
Which of the following is a double entry for deprecation expenses?
Accumulated depreciation Debit and depreciation expenses Credit
Depreciation expenses Debit and accumulated depreciation Credit
Cash Debit and Depreciation expenses Credit
Depreciation expenses Debit and Cash Credit
Q.21
A current asset that is convertible to cash within 3 months can be referred to as
Cash asset
Operating asset
Intangible assets
Cash equivalent
Q.22
What is depreciation?
Cost of a fixed asset
Cost of a fixed asset's repair
The residual value of a fixed asset
Portion of a fixed asset's cost consumed during the current accounting period
Q.23
Which of the following financial reports shows the profitability of a business?
Income statement
Balance sheet
Cash flow statement
Statement of changes in equity
Q.24
An increase in the value of fixed asset is referred to as:
Depreciation
Appreciation
Market capitalization
Reverse depreciation
Q.25
In income statement, gross profit is always equal to
Sales - expenses
Income - expenses
Sales - cost of goods sold
Sales - selling costs
Q.26
Office equipment is a ______ asset for a computer manufacturer and the same office equipment is a ____ asset for a company that deals in these equipments
Current, fixed
Fixed, intangible
Tangible, intangible
Fixed, current
Q.27
Financial statements mainly help in
Assumption of economic events
Anticipation of economic events
Recording of economic events
Communication of economic events
Q.28
Exercising a degree of caution in the case of judgements needed under the condition of uncertainity is the assumption of which of the following accounting concepts?
Matching concept
Timeliness concept
Accrual concept
Prudence concept
Q.29
Which one of the following concepts states that the publication or presentation of financial statements should not be delayed?
Objectivity concept
Timing concept
Timeliness concept
Reliability concept
Q.30
The purchase price of a software that will be used for more than 12 months should be regarded as
a revenue expenditure
a capital expenditure
a long term expense
an accounting period expense
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