Question # 1

Cost of goods sold is equal to

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sales - purchases

purchases + closing stock - returns outwards

Opening stock - closing stock + purchase + returns inwards

Opening stock + purchases - returns outwards - closing stock

Income statement is prepared to ascertain the net result of the business concern under

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British accounting system

American accounting system

Cash system of accounting

None of these

Which one of the following is a direct expense?

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Packing expense

Advertisement expense

Manufacturing expense

Traveling expense

A statement which is prepared to know the financial position of a business on a particular date, is called

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Balance sheet

Statement of condition

Position statement

All of above

Net purchases are equal to

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Sales - returns outwards

Purchases + returns inwards

Purchases - returns outwards

Purchases + returns outwards

Allowance for discount on account receivable is calculated on the amount of account receivable

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Before deducting the allowance for doubtful debts

Left after deducting the allowance for doubtful debts

Before deducting the actual bad debts

None of these

The expenses which are incurred for the generation of revenues from the sales of goods are called

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Non-operating expenses

Selling expenses

Operation expenses

Administrative expenses

A statement which i prepared to ascertain the net income or net loss for a specific accounting period is called

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Position statement

Statement of condition

Financial statement

Bank reconciliation statement

From the business point of view, interest on drawings is

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An asset

An expense

A liability

A revenue

Allowance for doubtful debts normally has a

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Debit balance

Credit balance

Both debit & credit balance

None of these

Cost incurred to generate revenue is called

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Revenue

Cost

Expense

Liability

The amount by which the revenue for a particular period of time exceed from expenses incurred to generate them is called

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Gross income

Net income

Revenue

Expenses

Sales are equal to

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Cost of goods sold + Profit

Gross profit - cost of goods sold

Cost of goods sold - gross profit

None of these

Which one of the following is a direct expense?

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Custom duty

Carriage

Wages

All of above

Net sales equal to

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Sales - Returns outwards

Sales + Returns inwards

Sales - Returns inwards

Purchases - Returns inwards

The margin that is available to cover the other expenses for a period and to yield net income is known as

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Net profit

Gross profit

Net sales

Cost of goods sold

The gross amount of goods sold or services performed during an accounting period is known as

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Purchase

Sale

Gross profit

Net profit

The inflow of assets in return for services performed or products delivered during a period is

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Asset

Revenue

Non current asset

None of these

Net sales - cost of goods sold - operating expenses = ?

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Net purchases

Cost of goods sold available for sale

Net operating income

Gross Profit

All expenses connected with the office and its conduct are called

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Selling expenses

Marketing expenses

Service expenses

Administrative expenses

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Principles of accounting Icom Part 1 English Medium Chapter 12 Online Test MCQs With Answers

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