Question # 1

What will be the effect on accounting equation ,which payment is made to the creditor of the business?

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Decrease in an asset ,decrease in liability

Increase in asset,increase in liability

Increase in asset ,increase in owner equity

If a business pays rent in 12 months mit will be treated as:

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Prepaid expenses of business

Long term liability of business

Fixed assets of business

Firm charges each year

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to ensure there is enough money in the firm to replace the asset

to spread the cost of the asset over its working file

because the law states they must be reduced

In a balance sheet fixed asset is shown at

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cost price

market value

fair value

written down value

____ is the detail of transaction in one account provided by the bank

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bank statement

income statement

bank reconciliation statement

Net profit + expenses =______

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Liabilities

assets

capital

income

Bank reconciliation statement is :

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a memorandum statement

a ledger account

a part of cash book

a part of journal

A book in which receipts and payments are recorded is known as

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Pass book

Cash book

Purchase book

Sales book

According to double entry system of accounting,an accounting that obtain benefit is

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Debit

Credit

Income

Which of the following items appears in Trading account of business?

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Interest expenses

Wages and salaries

Depreciation expenses

Discount allowed

Accrued expenses are the example of

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Current liabilities

Long term liabilities

Capital expenses

An informal accounting statement that lists the ledger account balance at a time and compare the total of debit balance with the total of credit balance is known as :

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Income statement

balance sheet

trail balance

cash book

The basic purpose of depreciation is to achieve the

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Matching principle

Dual aspect principle

Separate entity concept

Money measurement concept

Which one of the following is CORRECT about closing stock?

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It appears in the asset side of the balance sheet

it decrease the value of cost of goods sold

It becomes the opening stock of the next year

All of the above

The amount of depreciation charged on machinery will be debited to:

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machinery account

depreciation account

cash account

Assets total Rs 50,000 and liability total rs 10,000 ,What is the equity of the business?

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40000

60000

30000

10000

What would be the affects on component of the accounting equation if goods are purchased on cash?

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increase in cash and decrease in equity

increase in cash and increase in goods

increase in cash and decrease in goods

Economic resource owned by a business and expected to benefit for the future operation are called :

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Expenses

Assets

Capital

The amount brought propritier in the business should be credited to

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cash account

capital account

drawing account

Which of the following financial statement summarizes the profitability of an organization for a particular period?

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Trade and profit & loss account

cash flow statement

balance sheet

Cost incurred for the maintenance of shop in considered as

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revenue expenses

capital expenses

deferred expenses

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