0% 0 votes, 0 avg CH 1 [Accounting Fundamentals Quiz no 2]Advertisements 1 / 24 1. Which of the following is NOT a business transaction? A) Incurring interest on business loan. B) Purchasing office supplies. C) Hiring a new employee. D) Receiving fees for services. 2 / 24 2. Purchase of machinery for cash? A) Increase total assets. B) Decrease total assets. C) Keeps total assets unchanged. D) Increases assets and liabilities. 3 / 24 3. Investment of cash into business results in? A) Increase in cash and decrease in capital. B) Increase in cash and increase in capital. C) Increase in fees earned and an increase in capital. D) Decrease in cash and an increase in capital. 4 / 24 4. Services rendered for cash will result in a/an? A) Increase in cash and a decrease in capital. B) Increase in cash and an increase in fees earned. C) Decrease in cash and an increase in fees earned. D) Increase in fees earned and an decrease in capital. 5 / 24 5. What is the objective of accounting? Check 6 / 24 6. Which of the following explains why lenders are interested in financial statements ofa business? A) Lender need information about financial stability of business. B) Lenders want to assess the entity’s capacity to pay interest and repay loan on time. C) Lender need information about profitability of business. D) All of these. 7 / 24 7. Which of the following best describes a liability? A) Someone who owes money to the business for goods purchased on credit. B) A transaction to purchase goods to be paid for immediate payment. C) An amount owed by the business. D) All of these . 8 / 24 8. Income arises from increase in assets or decrease in a liability resulting in: A) Decrease in equity other than contribution from owner. B) Increase in equity other than contribution from owner. C) Increase in equity including contribution from owner. D) Decrease in equity including contribution from owner. 9 / 24 9. Which two of the following would be considered as business transaction? A) Business paid the electricity bill of previous year. B) Owner received the electricity bill of the owner residence. C) Owner paid the electricity bill of the owner residence from personal cash. D) Business received electricity bill of office premises which will be paid in next year 10 / 24 10. Which two of the following would be considered as business transaction?1. Bank set the limit of overdraft of Rs 10 million.2. Interest charged by bank on overdraft A) Both are correct. B) None is correct. C) Only 1. D) Only 2. 11 / 24 11. Total assets of a business would be charged as a result of: A) Non-current assets being purchased on cash. B) A supplier balance being paid in cheque. C) Wages being paid in cash. D) Non-current assets being purchased on credit. 12 / 24 12. Which TWO of the following are not part of a complete set of the financialstatement? A) Statement of cash flows. B) Statement of financial position. C) Income tax return. D) Auditor report. 13 / 24 13. Which TWO of the following are not part of a complete set of the financialstatement? A) Notes to financial statement. B) Statement of financial position. C) Director report. D) Auditor report. 14 / 24 14. International Financial Reporting Standards are issued by: A) Financial Accounting Standards Board. B) International Accounting Standards Board. C) International Accounting Standards Committee. D) Generally Accepted Accounting Principles Board. 15 / 24 15. A liability is classified as current liability of it is paid: A) Within one year or normal operating cycle, whichever is longer. B) Within one year or normal operating cycle, whichever is shorter. C) Out of current assets. D) Out of non-current assets. 16 / 24 16. If during the accounting period, the assets increased by Rs. 6 million, and theliabilities are increased by Rs. 4 million, then the owners’ equity must have: A) Increased by 10 million. B) Increased by 2 million. C) Decreased by 10 million. D) Decreased by 2 million. 17 / 24 17. If during the accounting period, the assets increased by Rs. 7 million, and theowner’s equity decreased by Rs. 3 million, then the liabilities must have: A) Increased by 10 million. B) Decreased by 4 million. C) Increased by 4 million. D) Decreased by 10 million. 18 / 24 18. A liability is classified as current liability if it is paid: A) Out of current assets. B) Within 1 year or normal operating cycle whichever is longer. C) Out of non-current assets. D) Within 1 year or normal operating cycle whichever is shorter. 19 / 24 19. An item can be converted easily into cash. In which section of the statement offinancial position would this item appear? A) non-current assets. B) current liabilities. C) current assets . D) capital. 20 / 24 20. Income arises from increase in assets or decrease in a liability resulting in: A) Decrease in equity other than contribution from owner. B) Increase in equity other than contribution from owner. C) Increase in equity including contribution from owner. D) Decrease in equity including contribution from owner. 21 / 24 21. Net assets (Assets – Liabilities) of a business would be changed as a result of: A) Non-current assets being purchased on cash. B) A supplier balance being paid in cheque. C) Wages being paid in cash. D) Non-current assets being purchased on credit. 22 / 24 22. International Financial Reporting Standards are issued by: A) Financial Accounting Standards Board. B) International Accounting Standards Board. C) Generally Accepted Accounting Principles Board. D) International Accounting Standards Committee. 23 / 24 23. The cost of a wastebasket having an estimated useful life of 5 years is charged offas an expense upon purchase. This is an example of the application of the: A) Consistency. B) matching principle. C) materiality concept. D) historical cost principle. 24 / 24 24. The Capital of a business would be changed as a result of: A) Non-current assets being purchased on cash. B) Wages being paid in cash. C) A supplier balance being paid in cheque. D) Non-current assets being purchased on credit. Your score isThe average score is 63% 0% Restart quiz Advertisements
