BASIC ACCOUNTING TERMS

THE ASSETS THAT CAN BE EASILY CONVERTED INTO CASH WITHIN A SHORT PERIOD i.e., ONE YEAR OR LESS ARE KNOWN AS

• CURRENT ASSETS

• FIXED ASSETS

• INTANGIBLE ASSETS

• INVESTMENTS

COPYRIGHT,PATENT AND TRADEMARKS ARE EXAMPLE OF

GROSS PROFIT IS

DRAW THE FORMAT OF BALANCE SHEET

IF A TRIAL BALANCE TOTALS DO NOT AGREE,THE DIFFERENCE MUST BE ENTERED IN

• PROFIT & LOSS ACCOUNT

• NOMINAL ACCOUNT

• CAPITAL ACCOUNT

• SUSPENSE ACCOUNT

• NONE

AN EVENT INVOLVING SOME VALUE BETWEEN TWO OR MORE ENTITIES IS KNOWN AS

• EXPENSES

• RECEIPTS

• PAYMENTS

• TRANSACTIONS

A DISCOUNT WHICH IS PROVIDED ON THE LIST PRICE OF GOODS/SERVICES IS KNOWN AS

Answer explanation

Offering deduction of agreed % on list price at the time of selling goods is known as trade discount. It is generally offered by manufacturer to wholesaler and wholesaler to retailer.

The account that records expenses,gains and losses is

• personal account

• real account

• nominal account

• none of the above

In journal ,the business transaction is recorded

• same day

• next day

• once in a week

• once in a year

RETURN ON INVESTMENT(ROI)=

Answer explanation

ROI=(NET PROFIT/TOTAL ASSET)* 100. ROI IS A PERFORMANCE MEASURE USED TO EVALUATE THE EFFICIENCY OF AN INVESTMENT .