Accounting Quiz

Which of the following is not the advantage of a bill of exchange?

• It is a legal evidence of debt

• A creditor can sue on the bill itself

• It can be cashed before due date by discounting

• It is not a negotiable instrument and cannot be transferred for settlement of a debt

A consignor is also a/an _______________.

• Agent

• person acting as the sales agent

• trader having no ownership of the goods

• principal and has an ownership of the goods

A company which can offer its shares for subscription to the public is known as _____________.

• sole trader

• Partnership

• private company

• public limited company

Which of the following financial statements shows the movement of share capital and reserves in an accounting period?

• Statement Of Changes In Equity

• Income Statement

• Statement Of Cash Flow And Profit Flow

• Statement Of Financial Position

Which of the following statement is not true:

• If del-credere commission is allowed, bad debt will not be recorded in the books of consignor.

• If del-credere commission is allowed, bad debt will be debited in consignment account.

• Del-credere commission is allowed by consignor to consignee.

• Del-credere commission is generally relevant for credit sales.

Goods withdrawn for private use. Which parts of the accounting equation will change?

• Assets and liabilities

• Assets and equity

• Equity and liabilities

• Assets, liabilities and equity

Which of the following descriptions regarding the Memorandum Joint Venture are correct?

• A profit statement for joint venture business

• An account for business transaction entries

• A statement able to find out the total sales

• A report on joint venture cash flow

Which of the following statements relating to consignment are correct?

• The bad debts incurred on credit sales are always borne by the consignee

• The ownership of goods consigned belongs to the consignor

• The account sales is prepared by the consignor

• All expenses incurred on consignment are borne by the consignor

At the end of the reporting period of a consignor, if the Consignment account is a debit balance, what does the balance refer to?

• Profit on consignment

• Balance due from consignee

• Consignment accounts receivable

• Unsold inventory on consignment

The goods sent on consignment were lost in transit, and if the goods had been insured and the consignor was informed of the compensation. How should the consignor record the claim?

• Dr Bank Cr Consignment

• Dr Insurance Company Cr Consignment

• Dr Consignment Cr Insurance Company

• Entries are required in consignee’s books only