Multiple Choice Questions POA

Which one of the following is not an external user of accounting information?

• Investor

• Creditor

• Manager

• Customer

The liability arising from the purchase of goods on credit is called ……..

• accounts payable

• accounts receivable

• payable expenses

Which financial statement represents the accounting equation?

• Statement of Changes Equity

• Statement of Cash Flow

• Statement of Financial Position

• Statement of Profit or Loss

What are the effects of buying inventory on time?

• Asset decrease and liability increase

• Asset increase and liability increase

• Asset increase and capital decrease

• Asset decrease and capital increase

Accrued expense is ………..

• expense account

• asset account

• liability account

• capital account

What does the debit entry in an asset account mean?

• An increase in items that the business owns

• An increase in items that the business does not own

• A decrease in items that the business owns

• The assets sold

Which accounts are used when the company repaid the amount owed to the supplier by cash?

• Accounts payable and cash

• Accounts receivable and cash

• Accounts payable and bank

• Accounts receivable and bank

What is the debit or credit entry if there is an increase in each of these items by the following order? Computer, COGS, Delivery van, Loan from bank

• Debit, debit, debit, debit

• Credit, debit, debit, debit

• Debit, debit, credit, debit

• Debit, debit, debit, credit

What accounts are affected by the investment of cash by the owner?

• Cash and accounts payable

• Cash and drawings

• Cash and capital

• Cash and accounts receivable

According to accrual concept of accounting, the economic transaction is recorded ……..

• when cash is received or paid

• when transaction occurs

• when profit is computed

• when the invoice is received