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RUTS Accountancy

Total questions: 55

Worksheet time: 41mins

Name
Class
Date
1.

The systematic process of keeping or maintaining financial records and transactions for a business..

a)

Accounting

b)

Accountancy

c)

Accountant

d)

Bookkeeper

2.

The practice of measuring, classifying, verifying, summarizing, interpreting and reporting on business transactions for a business to reveal profit or loss, a firm's assets, liabilities and owners' equity.

a)

Accounting

b)

Accountancy

c)

Accountant

d)

Bookkeeper

3.

Accounting process starts with.....

a)

Identification of financial transactions

b)

Posting into ledger

c)

Recording in Journal

d)

Summarising of financial transactions

4.

The process of recording transactions is also called?

a)

Summarising

b)

Reporting

c)

Posting

d)

Journalising

5.

A __________________ statement shows the profitability of the business

a)

Cash flow

b)

Profitability

c)

Financial Position

d)

Profit or Loss

6.

A person to whom money is owed by a firm for purchase of goods or services is called

a)

The Debtor

b)

The Creditor

c)

The Drawer

d)

None of these

7.

A person who owes money to a firm against goods bought or services received is called

a)

The Debtor

b)

The Creditor

c)

The Drawer

d)

None of these

8.

The resources owned and controlled by an entity and also known as properties or rights owned by the business are...

a)

Assets

b)

Liabilities

c)

Revenue

d)

Expenses

9.

Economic benefits received from business activities; the amount earned in the conduct of business is known as...

a)

Assets

b)

Liabilities

c)

Revenue

d)

Expenses

10.

The costs incurred in conducting the business are ....

a)

Assets

b)

Liabilities

c)

Revenue

d)

Expenses

11.

The economic obligations of a business entity are called ...

a)

Assets

b)

Liabilities

c)

Revenue

d)

Expenses

12.

Deposits or advanced payments from customers which requires settlement through delivery of goods or services in the future is known as...

a)

Sales Revenue

b)

Service Revenue

c)

Unearned Revenue

d)

Accrued Revenue

13.

The costs of compensation to employees for their services to the company.

a)

Taxes and Licenses

b)

Delivery Expense

c)

Training and Development

d)

Salaries and Wages

14.

The assets that are held for sale during the normal operations of the business is called ...

a)

The Inventory

b)

Accounts Receivable

c)

Furniture and Fixtures

d)

Intangibles

15.

Indebtedness arising from purchases of goods, materials, supplies, services or other transactions is ....

a)

Accounts Payable

b)

Notes Payable

c)

Bonds Payable

d)

Loans Payable

16.

Water, electricity, garbage removal and other service costs required to conduct business is known as ....

a)

Telecommunication Expenses

b)

Utility Expenses

c)

Supplies Expenses

d)

Repairs and Maintenance

17.
The amount earned from leasing out commercial spaces such as office space, stalls, booths, apartments, condominiums, etc.
a)
Royalty Income
b)
Interest Income
c)
Rent Income
d)
Franchise Fee
18.

Which of the following is the most relevant accounting information for taxation authorities?

a)

cash balances

b)

book values of assets

c)

credit sales

d)

profit during the year

19.

An amount invested by an owner in their business is called?

a)

Drawings

b)

Capital

c)

Assets

d)

Liability

20.

The traditional approach classifies Capital into which category of account?

a)

Real

b)

Personal

c)

Nominal

d)

None of these

21.

Goods taken by the Proprietor for personal use are

a)

Sales

b)

Drawings

c)

Purchases

d)

None of these

22.

Those Assets which are acquired for the purpose of increasing the earning capacity of the business is called

a)

Financial assets

b)

Current Assets

c)

Fixed Assets

d)

None of these

23.

Current Assets do not include....

a)

Debtors

b)

Bank

c)

Motor cars

d)

Prepaid Expenses

24.

Which of the following is not a fixed asset

a)

Building

b)

Plant and machinery

c)

Balance with Bank

d)

Goodwill

25.

Which of the following is a current asset?

a)

Machinery

b)

Cash

c)

Building

d)

Furniture

26.

Which of following is not an intangible asset?

a)

Goodwill

b)

Patents

c)

Trade marks

d)

Furniture

27.

Example of an Intangible asset

a)

Debtors

b)

Plant and Machinery

c)

Goodwill

d)

None of these

28.

Assets that can be converted into cash in one accounting period are called?

a)

Fixed assets

b)

Fictitious assets

c)

Current assets

d)

Non current assets

29.

Trade discount means

a)

Cash discount

b)

No discount

c)

Reduction in price

d)

None of these

30.

A double entry system means

a)

Twice recorded

b)

Once in ledger once in journal

c)

Recording both aspects of transactions

d)

None of these

31.
Current Liabilities do not include.....
a)
B/P
b)
Creditors
c)
O/s Expenses
d)
Debtors
32.

Purchase refers to the buying of

a)

Goods or products for resale

b)

Assets for the factory

c)

Stationery for office use

d)

Daily expenses

33.

What causes an increase of current liabilities in business?

a)

goods sold on credit

b)

goods purchased on credit

c)

goods withdrawn by a partner

d)

none of the above

34.

Which of the following business organisations have a limited liability clause?

a)

Sole proprietorship

b)

One person company (OPC)

c)

Partnership

d)

None of these

35.

A Bank Overdraft is recorded as a

a)

Current liability

b)

Non-Current liability

c)

Contingent liability

d)

None of these

36.

Which concept says that Accounting practices once adopted should be applied year after year?

a)

Conservatism

b)

Accrual

c)

Business entity

d)

Consistency

37.

If accounting information is based on facts and it is verified by documents it has what quality?

a)

relevance

b)

reliability

c)

understability

d)

compareability

38.

When can wages that were paid, be recorded as a capital expenditure?

a)

Repairs to the building

b)

Painting the building

c)

Construction of the building

d)

Cleaning the building

39.

Which of the following is not considered to be an account, under traditional approach

a)

Capital

b)

Real

c)

Personal

d)

Nominal

40.

If goods are distributed as free samples, which account should you debit?

a)

Purchases

b)

Goods

c)

Free sample

d)

Advertising

41.

Which of the following is an incorrect formula?

a)

Capital = Assets - Liabilities

b)

Capital + Assets = Liabilities

c)

Capital + Liabilities = Assets

d)

Capital - Assets = Liabilities

42.

In a cash flow statement, the activities of an enterprise are divided into Operating, Investing and Financing.

If rent is paid for by a builder, where should you record it?

a)

Operating

b)

Financing

c)

Investing

d)

None of these

43.

Outstanding Rent is considered to be...

a)

a Liability

b)

an Asset

c)

an Expense

d)

Income

44.

While preparing financial statements of the sole proprietor, how will his Income Tax be handled? (as appears in trial balance)

a)

Treated as expenditure in profit and loss account

b)

Treated as differed revenue expenditure

c)

Treated as drawings and subtracted from capital

d)

None of these

45.

What journal entry will be passed if business is started by raising a bank loan

a)

Debit bank account and credit capital account

b)

Debit capital account and credit bank account

c)

Debit bank account and credit bank loan account

d)

Debit bank loan account and credit capital account

46.

What is super profit?

a)

Average profit - normal profit

b)

Normal profit - avg profit

c)

Current profit- previous profit

d)

Previous profit- current profit

47.

Which of the following is not a method for Goodwill valuation?

a)

Super profit

b)

Average profit

c)

Normal profit

d)

Capitalisation

48.

What is your understanding of Goodwill?

a)

Reputation of firm

b)

Bad name of firm

c)

Patent of firm

d)

Copy right of firm

49.

Accrued Commission is a/an ...

a)

Income

b)

Asset

c)

Liability

d)

Expense

50.
Which manual bookkeeping system has a built-in way to check for errors?
a)
Single-entry system 
b)
Pegboard system 
c)
Double-entry systems 
51.

What reason would cause a cost to become a write-off?

a)

An insurance adjustment

b)

An extension of professional courtesy

c)

A cancellation of a fee

d)

An extension of credit

52.

Which best describes an account payable ledger?

a)

A book of all remaining debtor balances.

b)

A book of daily financial summaries.

c)

A book of all office debts that have not been paid

d)

A book of payments received from auditors

53.

Which of the following best describes a trial balance?

a)

It shows the financial position of a business

b)

It is a special account

c)

It shows all the entries in all the journals

d)

It is a list of the total balances for the books

54.

Gross profit is calculated from ...

a)

Net profit - expenses

b)

Cost of goods sold + opening inventory

c)

Sales - purchases

d)

Total Revenue - cost of goods sold

55.

Which of the following statements is correct?

a)

Profit does not change capital

b)

Profit reduces capital

c)

Profit increases capital

d)

Capital can only come from profit

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