Basics of Accounting

Which of the following is not included in the definition of accounting?

• Identifying economic information

• Measuring economic information

• Developing economic information

• Communicating economic information

Which financial statement reports revenues and expenses?

• Statement of retained earnings

• Balance Sheet

• Statement of cash flows

• Income statement

The revenue recognition principle states that:

• Assets are recorded and maintained at their historical costs

• Revenues are recorded when they are earned

• Inflation adjusted rupee is the best means of accounting

• Revenues are recorded when cash is received

During the financial year 2022-23, Ram and Sons Ltd. had revenues of Rs. 1,25,000. Rent expense was Rs. 12,000. Salaries expense was Rs. 25,000. Short-term investments were Rs. 35,000. Other expenses totaled Rs. 40,000. What was the net income of Ram and Sons Ltd.?

• Rs. 85,000

• Rs. 13,000

• Rs. 48,000

• Rs. 60,000

As of March 31st, 2023, Shyam and Sons Ltd. had assets of Rs. 18,400 and equity of Rs. 6,500. What are the liabilities for Shyam and Sons Ltd.?

• Rs. 24,900

• Rs. 11,900

• Rs. 14,200

• Rs. 8,600

A company begins a period with a Rs. 5,000 retained earnings balance. The company generates Rs. 12,000 of revenues and Rs. 10,000 of expenses during the period and pays Rs. 1,000 of dividends. What is the retained earnings balance at the end of the period?

• Rs. 7,000

• Rs. 5,000

• Rs. 6,000

• Rs. 1,000

Which of the following could be an asset for you?

• Mortgage

• Credit card bill

• Jewellery

• Sneakers

Purchases made during the year are Rs. 2892270, of which Rs. 113580 is in cash. How much amount of purchases were made in credit?

Accounting takes care of the interests of

• Investors

• Suppliers

• Shareholders

• Stakeholders

Systematic recording of business transactions in books of account is

• Financial accounting

• Auditing

• Bookkeping

• Accountancy