AI Generated MCQs

What is the monetary value of goods and services supplied by the business to customers called?

• Drawings

• Expenses

• Income

• Capital

Which of the following is an example of income?

• Rent paid

• Commission received

• Salaries and wages

• Telephone bills

What are expenses in the context of a business?

• Income received from customers

• Assets withdrawn by the owner

• The cost of running the business

• The profit earned by the business

Which of the following is NOT an example of an expense?

• Electricity charges

• Rent received

• Salaries and wages

• Telephone bills

What are drawings in a business context?

• Income earned by the business

• Assets withdrawn from the business by the owner for personal use

• Payments made to suppliers

• Goods purchased for the business

How are goods drawings recorded in the books of accounts?

• Drawings (Dr), Cash (Cr)

• Purchases (Dr), Drawings (Cr)

• Drawings (Dr), Purchases (Cr)

• Cash (Dr), Drawings (Cr)

What happens to the capital when money is taken out of the business as drawings?

• Capital increases

• Capital remains unchanged

• Capital decreases

• Capital is unaffected by drawings

Which account is debited when there is a decrease in capital due to drawings?

• Capital account

• Drawings account

• Income account

• Expense account

How are cash drawings recorded in the books of accounts?

• Drawings (Dr), Purchases (Cr)

• Purchases (Dr), Drawings (Cr)

• Drawings (Dr), Cash (Cr)

• Cash (Dr), Drawings (Cr)

Which of the following statements is true?

• Drawings increase the capital of the business.

• Drawings have no effect on the capital of the business.

• Drawings reduce the capital of the business.

• Drawings are considered income for the business.