Accounting Basics Quiz

Which term best describes the owner's claim against the assets of the business, typically adjusted for profits and drawings?

• Liability

• Revenue

• Capital

• Expense

What represents the interest of outside creditors in a company's assets, often referred to as debts?

• Assets

• Equity

• Liabilities

• Revenue

In accounting, which of the following is not considered an asset?

• Machinery

• Stock

• Trade Creditors

• Cash

Which of the following does not contribute to an increase in owner's equity?

• Sale of goods

• Commission received

• Additional capital invested

• Purchase of machinery

Which term refers to the cost associated with the use of resources to generate revenue, excluding long-term investments?

• Revenue expense

• Capital expense

• Revenue

• Liability

Who is considered a trade debtor?

• A person who receives cash immediately

• A person who supplies goods on credit

• A person who buys goods on credit

• A person who sells goods for cash

Which of the following assets can be physically seen, touched, or felt?

• Goodwill

• Patent rights

• Cash

• Preliminary expenses

Which term best describes assets that lose value with usage, such as mines and forests?

• Intangible assets

• Fictitious assets

• Wasting assets

• Fixed assets

How is the term 'drawings' best described in accounting?

• Amounts added to the owner's capital

• Owner's claim against liabilities

• Money withdrawn by owners from the business

• Profits reinvested into the business

Which of the following would be categorized as a current liability?

• Bank loans repayable in 5 years

• Mortgage loans

• Trade creditors

• Fixed assets