Question # 1 of 15 ( Start time: 03:09:37 PM ) Total Marks: 1
Financial statements are a subset of which of the following?
Select correct option:
1. Financial reporting
2. Financial statement analysis
3. Accounting information
4. Accounting system
Question # 2 of 15 ( Start time: 03:12:19 PM ) Total Marks: 1
Which of the following is an example of an accrual?
Select correct option:
1. Equipment purchased for use in the business
2. Book-keeping fees collected but not yet earned
3. Six months’ rent paid in advance
4. Interest earned but not yet received
Question # 3 of 15 ( Start time: 03:13:46 PM ) Total Marks: 1
Which of the following is true about "After closing trial balance"?
Select correct option:
1. It may consist of balances of only Real and Personal accounts
2. It may consist of balances of only Nominal and Real accounts
3. It may consist of balances of Nominal, Real and Personal accounts
4. It may consist of balances of only Nominal and Personal accounts
Question # 4 of 15 ( Start time: 03:15:06 PM ) Total Marks: 1
Which of the following may include the “analyzing the transaction” the first step of the accounting cycle?
Select correct option:
1. Determining the transaction amount
2. Determining the effected accounts
3. Identifying the event as a transaction
4. All of the given options
Question # 5 of 15 ( Start time: 03:16:17 PM ) Total Marks: 1
The basic purpose of financial statements is to assist users in evaluating the________
Select correct option:
1. Financial position
2. Profitability of an organization
3. Future prospects
4. All of the given options
Question # 6 of 15 ( Start time: 03:16:56 PM ) Total Marks: 1
Which one of the following would lead to the decrease in the owner’s equity?
Select correct option:
1. Purchasing a piece of land
2. Paying dividends to shareholders
3. Purchasing equipment on account
4. Paying back the principal of a loan
Question # 7 of 15 ( Start time: 03:18:14 PM ) Total Marks: 1
Which of the following type of reports is most frequently used by external users, such as investors?
Select correct option:
1. Financial Statements
2. Tax Forms
3. Management Reports
4. Audit reports
Question # 8 of 15 ( Start time: 03:18:48 PM ) Total Marks: 1
How many parts does each account have?
Select correct option:
1. Two
2. Four
3. Three
4. Five
Question # 9 of 15 ( Start time: 03:19:19 PM ) Total Marks: 1
Identify the statement that is NOT true about the Incomes Account and Expenses Account:
Select correct option:
1. These are the temporary accounts
2. These are closed in Income summery account
3. These may included in closing trial balance
4. These are also known as Nominal Accounts
Question # 10 of 15 ( Start time: 03:20:47 PM ) Total Marks: 1
If the estimated amount of depreciation on equipment for a period is Rs.2000, the adjusting entry to record depreciation would be:
Select correct option:
1. Depreciation expense - Debit; Equipment - Credit
2. Depreciation expense - Debit; Accumulated depreciation - Credit
3. Equipment - Debit; Depreciation expense - Credit
4. Accumulated depreciation - Debit; Depreciation expense - Credit
Question # 11 of 15 ( Start time: 03:22:02 PM ) Total Marks: 1
Which of the following terms present a cause and effect relationship with each other?
Select correct option:
1. Income statement and balance sheet
2. Revenue and assets
3. Assets and liabilities
4. Revenues and expenses
Question # 12 of 15 ( Start time: 03:23:06 PM ) Total Marks: 1
Accounting is called the “language of business” because____________:
Select correct option:
1. It communicates the financial information to the Management only
2. In order to run a business one must have knowledge about accounting
3. Different business accounts are involved in financial statements
4. It helps to organize and communicate financial information to end users
Question # 13 of 15 ( Start time: 03:23:55 PM ) Total Marks: 1
Which one of the following statement shows the effects of cash inflows and outflows?
Select correct option:
1. Balance Sheet
2. Statement of Owner’s Equity
3. Income Statement
4. Statement of Cash Flows
Question # 14 of 15 ( Start time: 03:24:28 PM ) Total Marks: 1
Which of the following would represent a non-cash expense for the business?
Select correct option:
1. Cost of building
2. Cost of inventory
3. Cost of office equipment
4. Depreciation of building
Question # 15 of 15 ( Start time: 03:25:12 PM ) Total Marks: 1
In which of the following account, a credit balance would be an evidence for a mistake or an error?
Select correct option:
1. Mr. A Capital Account
2. Cash account
3. Notes payable account
4. Drawings account
Question # 1 of 15 ( Start time: 03:27:58 PM ) Total Marks: 1
All of the following accounts would be closed in Income Summery Account EXCEPT:
Select correct option:
1. Commission earned account
2. Prepaid insurance
3. Salaries Expense account
4. Wages account
Question # 2 of 15 ( Start time: 03:28:56 PM ) Total Marks: 1
Which of the following is NOT one of the four basic financial statements?
Select correct option:
1. Balance sheet
2. Audit report
3. Income statement
4. Statement of cash flows
Question # 3 of 15 ( Start time: 03:29:40 PM ) Total Marks: 1
Which of the following account would be classified as a current asset on the balance sheet?
Select correct option:
1. Accumulated depreciation
2. Accounts receivable
3. Office equipment
4. Land
Question # 4 of 15 ( Start time: 03:30:23 PM ) Total Marks: 1
Which of the following may include the “analyzing the transaction” the first step of the accounting cycle?
Select correct option:
1. Determining the transaction amount
2. Determining the effected accounts
3. Identifying the event as a transaction
4. All of the given options
Question # 5 of 15 ( Start time: 03:30:54 PM ) Total Marks: 1
Financial statements are a subset of which of the following?
Select correct option:
1. Financial reporting
2. Financial statement analysis
3. Accounting information
4. Accounting system
Question # 6 of 15 ( Start time: 03:31:32 PM ) Total Marks: 1
Which of the following account would NOT be closed to the income summary account at the end of a period?
Select correct option:
1. Rent expense
2. Revenue earned
3. Wages expense
4. Accumulated depreciation
Question # 7 of 15 ( Start time: 03:32:13 PM ) Total Marks: 1
A business has purchased a building on cash, how it would be recorded in the journal?
Select correct option:
1. Building - Debit; Cash - Credit
2. Cash - Debit; Building - Credit
3. Building - Debit; Owner’s equity - Credit
4. Building - Debit; Accounts Payable - Credit
Question # 8 of 15 ( Start time: 03:33:03 PM ) Total Marks: 1
Pre-paid expense is a(n) _________ type of account.
Select correct option:
1. Liability
2. Asset
3. Revenue
4. Expense
Question # 9 of 15 ( Start time: 03:33:56 PM ) Total Marks: 1
An entry that effects more than one accounts is knows as _____________.
Select correct option:
1. Journal entry
2. Compound entry
3. Adjusting entry
4. Reversing entry
Question # 10 of 15 ( Start time: 03:34:29 PM ) Total Marks: 1
Which of the following would be affected by the difference between revenues and expenses?
Select correct option:
1. Assets
2. Owner’s equity
3. Liabilities
4. Capital
Question # 11 of 15 ( Start time: 03:35:51 PM ) Total Marks: 1
According to _______ the personal expenses paid by Mr. A from his own pocket would not be recorded in business books of account.
Select correct option:
1. Realization principle
2. Separate entity principle
3. Matching principle
4. Materiality principle
Question # 12 of 15 ( Start time: 03:37:01 PM ) Total Marks: 1
Which of the following is true about the “Profit” earned by the business?
Select correct option:
1. It shows the amount that is received from the customer in cash only
2. It always results in increase in closing cash balance of a period
3. It affects the owner’s equity and liabilities in balance sheet
4. It may improves the liquidity position of a business
Question # 13 of 15 ( Start time: 03:38:29 PM ) Total Marks: 1
Which of the following term refers to each element of the Balance Sheet?
Select correct option:
1. Ledger
2. Journal General
3. T- Account
4. Account
Question # 14 of 15 ( Start time: 03:39:37 PM ) Total Marks: 1
Which of the following is TRUE about both sides of the trial balance?
Select correct option:
1. Both sides are always positive
2. Both sides are negative
3. Both sides are equal
4. Both sides are not linked which each other
Question # 15 of 15 ( Start time: 03:40:19 PM ) Total Marks: 1
Which of the following represents the negative future cash flows for an enterprise?
Select correct option:
1. Assets
2. Owner’s equity
3. Liabilities
4. Capital
The Drawing account is closed by which of the following entry?
Select correct option:
Capital – Debit; Drawing - Credit
Drawing – Debit; Capital - Credit
Income Summary – Debit; Drawing - Crediting
Drawing – Debit; Income Summary - Crediting
Which of the following is the adjustment that is added during the reconciliation of net income to operating cash flows in indirect method?
Select correct option:
An increase in Accounts Receivable
An increase in Prepaid Expenses
Gain on sale of capital assets
Amortization Expense
Which of the following is not true about the “Account”?
Select correct option:
Accounts are only prepared by the business entities
Account always reflects the amount of the single transaction only
Account is effected both by economic and non economic events
All of the given options
The basic purpose of financial statements is to assist users in evaluating the________
Select correct option:
Financial position
Profitability of an organization
Future prospects
All of the given options
Question # 5 of 15 ( Start time: 11:16:47 AM ) Total Marks: 1
Which of the following items are included in the financing activities section of the statement of cash flows?
Select correct option:
Cash effects of transactions involving making and collecting loans
Cash effects of acquiring and disposing of investments and property, plant, and equipment
Cash effects of transactions obtaining resources from owners and providing them with a return on their investment
Cash effects of transactions that enter into the determination of net income
Closing entries result in net income being calculated in the income summary account and then transferred to which of the following account?
Select correct option:
Revenue account
Common Stock account
Dividends account
Retained Earnings account
Which of the following is the largest single expense of most merchandising firms?
Select correct option:
Cost of goods sold
Rent Expense
Amortization Expense
Salaries Expense
The income statement of the UBL shows the interest revenue of Rs. 6,000, and the amount of accrued interest receivable has increased from Rs. 3000 to Rs. 4000 during the year. Calculate the amount of interest received.
Select correct option:
Rs. 7000
Rs. 5000
Rs. 8000
Rs. 1000
Question # 9 of 15 ( Start time: 11:21:14 AM ) Total Marks: 1
Which of the following is the first step of the accounting cycle?
Select correct option:
Making adjusting entries
Preparation of the financial statements
Posting in the ledger accounts
Analyze and journalize transactions as they occur
When preparing a statement of cash flows under the indirect method, supplemental disclosure should be made for which of the following?
Select correct option:
Net cash consumed by operating activities
Cash dividend distributions
Cash paid for interest and taxes
Cash paid for wages
Net current assets are equivalent to:
Select correct option:
Stock plus debtors plus cash
Current liabilities less current assets
Working capital
Fixed assets plus current assets less current liabilities
Statement of cash flows helps the investors and other stake holders to assess:
Select correct option:
The ability to generate future cash flows
The liquidity of the business
Ability to pay cash dividends in the future
All of the given options
Cash has been described as:
Select correct option:
The lifebuoy of the business
The lifeboat of the business
The lifeline of the business
The lifeblood of the business
How many parts does each account have?
Select correct option:
Two
Four
Three
Five
Which of the following items are NOT added back to the net income figure (which is found on the Income Statement) to arrive at cash flows from operations?
Select correct option:
Depreciation
Deferred tax
Amortization
Investments
A business has purchased a building on cash, how it would be recorded in the journal?
Select correct option:
Building - Debit; Cash - Credit
Cash - Debit; Building - Credit
Building - Debit; Owner’s equity - Credit
Building - Debit; Accounts Payable - Credit
Which of the following is NOT an example of cash equivalents?
Select correct option:
Certificates of Deposit
Money market accounts
Money market mutual funds
Euro Bond
Which of the following would represent a non-cash expense for the business?
Select correct option:
Cost of building
Cost of inventory
Cost of office equipment
Depreciation of building
Which of the following expenses would normally be classified as Other or Non Operating Expense on a multiple-step income statement?
Select correct option:
Interest expense
Depreciation expense
Insurance expense
Salaries expense
Closing entries result in net income being calculated in the income summary account and then transferred to which of the following account?
Select correct option:
Revenue account
Common Stock account
Dividends account
Retained Earnings account
All of the following accounts would be closed in Income Summery Account EXCEPT:
Select correct option:
Commission earned account
Prepaid insurance
Salaries Expense account
Wages account
Financial statements are a subset of which of the following?
Select correct option:
Financial reporting
Financial statement analysis
Accounting information
Accounting system
While preparing the cash flows statement, transactions involving production and delivering goods or providing services must be classified as:
Select correct option:
Business activities
Operating activities
Financing activities
Investing activities
Identify the statement that is NOT true about the Incomes Account and Expenses Account:
Select correct option:
These are the temporary accounts
These are closed in Income summery account
These may included in closing trial balance
These are also known as Nominal Accounts
Which of the following principle is used for recording a revenue?
Select correct option:
Matching Principle
Cost Principle
Realization Principle
Objectivity Principle
Which of the following is the most common adjusting entry?
Select correct option:
Un-earned revenue
Pre-paid expense
Depreciation expense
Accrued revenue
Mr. A purchases a piece of land for cash and debit made to machinery account. What would be the effect of this error on the trial balance?
Select correct option:
Debit side would be decrease with the same amount
Credit side would be increase with the same amount
Total of the trial balance would be agree in all aspect
None of the given options
An account that will not be included in "After Closing Trial Balance" is:
Select correct option:
Bank account
Depreciation account
Notes payable account
Unearned revenue account
Which of the following terms present a cause and effect relationship with each other?
Select correct option:
Income statement and balance sheet
Revenue and assets
Assets and liabilities
Revenues and expenses
Which of the following truly represents expenses?
Select correct option:
Future benefits
Past results
Cost of doing business
Past receipts
If a company has paid dividends on its preference shares, under which one of the cash flow statement headings would they appear?
Select correct option:
Returns on investments and servicing of finance
Financing
Equity dividends paid
Capital investment and financial investment
Which of the following is deducted from the net income while preparing cash flow statement by indirect method?
Select correct option:
Decrease in inventories
Increase in accounts payable
Depreciation
Increase in inventories
Depreciation is added back to profit when arriving at the cash flow from operating activities because:
Select correct option:
Depreciation is only an estimated amount
Depreciation does not affect profit
Depreciation does not result in a flow of cash
Depreciation only affects the balance sheet, not the profit and loss account
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