Topic 1 Basic Accounting Concepts

Which of the following is not the objective of accounting?

• to know how wealthy the business is

• to know how much the business owing

• to know how much the owner's personal drawings

• to track the owner personal saving account

Define bookkeeping.

• the process of recording data

• the process of recording data relating to accounting transactions

• the process of recording data relating to accounting transactions in the accounting books

• the process of recording data relating to accounting transactions in the cash books

ABC Enterprise bought an office for RM300,000 last year. As at today, the market value of office is RM400,000. In the balance sheet, ABC Enterprise should record the office value as ....

• RM300,000 based on the historical cost concept

• RM300,000 based on the money measurement concept

• RM400,000 based on the market value concept

• RM400,000 based on the money measurement concept

Which of the following is not classified as current assets?

• Cash at bank

• Inventory

• Account receivables

• Furnitures

Which of the following is not classified as non - current assets?

• Cash in hand

• Land

• Motor vehicles

• Machinery

What one of the following is the accounting equation?

• Assets = Liabilities - Capital

• Capital = Assets + Liabilities

• Capital = Assets - Liabilities

• Liabilities = Assets + Capital

Which of the following is classified as current liabilities?

• Account receivables

• Account payables

• Mortgage loan

• Loan to Diana

Which of the following is classified as non - current liabilities?

• Bank loan

• Loan from Linda (repayment in the next 6 months)

• Overdraft

• Account payables

In the money measurement concept, businesses should record ......

• Qualitative information

• Quantitative

  information

• Both qualitative and quantitative information

• Product and service durability

John, the owner of Veggies Supplies, bought a lorry for RM15,000. Payment made by bank transfer. What is the effect of accounting equation?

• Asset (Van) INCREASE RM15,000;

  Asset (bank) DECREASE RM15,000

• Asset (Van) INCREASE RM15,000;

  Asset (cash) DECREASE RM15,000

• Asset (Van) INCREASE RM15,000;

  Liabilities (bank) DECREASE RM15,000

• Asset (Van) INCREASE RM15,000;

  Capital (bank) INCREASE RM15,000