Accounting

What is the purpose of accounting?

• To track expenses

• To manage payroll

• To create marketing strategies

• To record financial transactions

What are the forms of capital income?

• Salaries and wages

• Rent and rates

• Interest and dividends

• Marketing and administration

Explain the difference between capital income and revenue income.

• Capital income is for non-operating activities, while revenue income is for operating activities.

• Capital income is for tangible assets, while revenue income is for intangible assets.

• Capital income is for individuals, while revenue income is for businesses.

• Capital income is long-term, while revenue income is short-term.

What is the definition of capital expenditure?

• Income generated from the main operating activities

• Money received from non-operating activities

• Money spent to purchase or improve a productive asset

• Money spent on day-to-day expenses

Which of the following is an example of an intangible asset?

• Machinery

• Rent

• Patents

• Inventory

What is the purpose of depreciation in accounting?

• To increase the value of assets

• To determine the operating expenses of a business

• To calculate the total revenue of a business

• To spread the loss in value of an asset over its useful lifetime

Which of the following is an example of a revenue receipt?

• Bank charges

• Interest paid

• Commission received

• Sale of assets

What happens if capital expenditure is treated as revenue expenditure?

• Expenses are understated

• Assets are overvalued

• Profits are undervalued

• Incomes are overstated

Identify one intangible asset.

• Machinery

• Patents

• Inventory

• Rent

Identify two sources of revenue income.

• Public Liability Insurance, Employers Liability Insurance

• Salaries and Wages, Rent and Rates

• Insurance, Inventory

• Interest and Dividends, Marketing and Administration