Accounting Basics Quiz

Which of the following is an example of revenue?

• Fresh capital introduced into the business

• Commission received for selling another firm's products

• Loan taken from a bank

• Purchase of goods for resale

How does revenue impact capital in accounting?

• Revenue decreases capital by increasing expenses.

• Revenue increases profit, which in turn increases capital.

• Revenue has no impact on capital.

• Revenue decreases profit, which reduces capital.

Where is revenue recorded in nominal accounts?

• On the debit side

• On the credit side

• On both debit and credit sides

• It is not recorded in nominal accounts

What are expenses in the context of accounting?

• Costs incurred by a business to earn revenue, representing the outflow of economic benefits during a period

• Assets purchased by a business to increase capital

• Revenue earned by a business during a financial year

• Profits generated by a business after deducting costs

Which of the following is an example of Revenue Expenses?

• Purchase of machinery

• Rent paid for office space

• Construction of a building

• Investment in long-term assets

What is the Matching Concept in accounting?

• Matching expenses against revenue of the same period

• Matching assets with liabilities

• Matching profits with capital

• Matching revenue with expenditure of different periods

Which type of expenditure provides benefits lasting more than one year?

• Revenue Expenses

• Deferred Revenue Expenditure

• Capital Expenditure

• Operating Expenses

What is Deferred Revenue Expenditure?

• Expenses incurred for day-to-day operations

• Large amounts written off over years

• Costs incurred for purchasing assets

• Revenue earned but not yet received

What happens when expenses exceed revenue?

• It results in a profit.

• It results in a net gain.

• It results in a net loss.

• It results in capital increase.

In the given example, if the sales are ₹5,00,000 and the cost of goods sold is ₹3,00,000, what is the Gross Profit?

• ₹2,00,000

• ₹3,00,000

• ₹80,000

• ₹5,00,000