Free Printable Business Basics Midterm Quiz

1.

Which is the following is the accounting equation for assets?

a)

Assets = Capital - Liabilities

b)

Assets = Capital / Liabilities

c)

Assets = Capital x Liabilities

d)

Assets = Capital + Liabilities

2.

What is the accounting equation for Capital?

a)

Capital = assets - liabilities

b)

Capital = assets + liabilities

c)

Capital = liabilities - assets

d)

Capital = liabilities x assets

3.

Assets - Capital = ?

a)

Capital

b)

Liabilities

c)

Assets

d)

Accounting

4.

Assets are ________

a)

all the resources invested in the business

b)

all the resources that the firm owes

c)

are persons that owe the business for goods and services supplied

d)

all the resources owned by the firm

5.

Debtors are ________

a)

persons the company owes for good and services

b)

persons who invest in the business

c)

persons who owe the bank for good and services

d)

persons who owe the company for goods and services

6.

Creditors are __________

a)

are all the resources that the firm owns

b)

are persons that owe the business for goods and services

c)

are persons that practice Accounting

d)

are persons that the business owes for goods and services

7.

Types of assets are?

(a)

8.

Which are the characteristics of non-current assets?

a)

Has a long life span (over one year/trading period)

b)

Not bought for resale

c)

Bought for resale

d)

Adds to the value of the business

9.

Non-current assets are _________?

a)

liabilities

b)

Assets that are under one year old

c)

are not found on a balance sheet

d)

Fixed assets

10.

Which are examples of Non current Assets?

a)

Land, premises, fixtures and fittings

b)

Inventory, accounts receivable

c)

furniture, motor vehicles, equipment

d)

Cash in Bank, Cash in Hand

11.

Types of liabilities are (a) ?

12.

Current assets are _______?

a)

assets that change from the day to day operations.

b)

long term assets

c)

assets that change from year to year operations

d)

the same thing as accounts payable

13.

current liabilities are ?

a)

financial obligations that last for over one year

b)

financial obligations to a firm for less than one year

c)

a book in which accounts are kept

d)

a sequence of events and processes used to create financial records

14.

Which of the following are current liabilities?

a)

loan, mortgages,

b)

accounts payable

c)

accounts receivable

d)

land, premise, building, furniture

15.

Which of the following are non-current liabilities?

a)

loan, mortgages,

b)

accounts payable

c)

accounts receivable

d)

land, premise, building, furniture

16.

Trade receivables are ?

a)

people who invest in the business

b)

people who the business owe

c)

the amount billed to a company by its suppliers for good delivered to or services consumed by the company in the ordinary course of business.

d)

the amount billed by a business to its customers when it delivers food or services to them in the ordinary course of business

17.

Trade payables are ?

a)

people who invest in the business

b)

people who the business owe

c)

the amount billed to a company by its suppliers for good delivered to or services consumed by the company in the ordinary course of business.

d)

the amount billed by a business to its customers when it delivers food or services to them in the ordinary course of business

18.

What is a balance sheet?

a)

record of all non current assets first. Arrange list by recording the assets that have the longest life span first or the highest value. Then record all the current assets, starting with those that are hardest to become liquid.

b)

Record the current assets first. Arrange the current assets that are easiest to become liquid (cash) then, record all non current assets next. Arrange the list by recording the assets that has the shortest life span first or the lowest value.

c)

tithe + blessings

d)

is the financial statement of a business at the end of a period that shows the firms total assets, capital and liabilities.

19.

What is order of permanency?

a)

record of all non current assets first. Arrange list by recording the assets that have the longest life span first or the highest value. Then record all the current assets, starting with those that are hardest to become liquid.

b)

Record the current assets first. Arrange the current assets that are easiest to become liquid (cash) then, record all non current assets next. Arrange the list by recording the assets that has the shortest life span first or the lowest value.

c)

tithe + blessings

d)

is the financial statement of a business at the end of a period that shows the firms total assets, capital and liabilities.

20.

What is order of liquidity?

a)

record of all non current assets first. Arrange list by recording the assets that have the longest life span first or the highest value. Then record all the current assets, starting with those that are hardest to become liquid.

b)

Record the current assets first. Arrange the current assets that are easiest to become liquid (cash) then, record all non current assets next. Arrange the list by recording the assets that has the shortest life span first or the lowest value.

c)

tithe + blessings

d)

is the financial statement of a business at the end of a period that shows the firms total assets, capital and liabilities.

21.

Bookkeeping _________________?

a)

are the rules, guidelines and concepts that govern, the field of accounting. A company must follow these rules when reporting financial data.

b)

involves recording, classifying, summarizing, interpreting and communicating financial data

c)

is another name for accounting equations

d)

is the recording of financial information, particularly transactions, in a systematic way.

22.

What are accounting principles?

a)

are the rules, guidelines and concepts that govern, the field of accounting. A company must follow these rules when reporting financial data.

b)

involves recording, classifying, summarizing, interpreting and communicating financial data

c)

is another name for accounting equations

d)

is the recording of financial information, particularly transactions, in a systematic way.

23.

The accounting sequence

a)

are the rules, guidelines and concepts that govern, the field of accounting. A company must follow these rules when reporting financial data.

b)

involves recording, classifying, summarizing, interpreting and communicating financial data

c)

is another name for accounting equations

d)

is the recording of financial information, particularly transactions, in a systematic way.

24.

The purposes of accounting are:

a)

Recording accounting data

b)

help figure out which subjects should be taught

c)

Planning how your are going to use your money (budget)

d)

Keeping specific records of information in a systematic manner

e)

making it possible to use data to make decisions

25.

Accounting information helps users to make better financial decisions.

a)

True

b)

False

26.

Users of Accounting information may be both internal and external.

a)

True

b)

False

27.

Internal users of accounting information are

a)

Secondary users

b)

Primary users

28.

External users of accounting information are

a)

Secondary users

b)

Primary users

29.

The following are Internal Users of Accounting Information

a)

Management

b)

Creditors, Tax Authorities

c)

Employees

d)

Investors, Customers, Regulatory Authorities

e)

Owners

30.

The following are External Users of Accounting Information

a)

Management

b)

Creditors, Tax Authorities

c)

Employees

d)

Investors, Customers, Regulatory Authorities

e)

Owners

31.

Accounting information is presented to internal users usually in the form of management accounts, budgets, forecasts

a)

True

b)

False

32.

External users are communicated Accounting information usually in the form of financial statements.

a)

True

b)

False

33.

A ledger is a book in which accounts are kept.

a)

True

b)

False

34.

Accounting concepts and conventions (sometimes called accounting principles)

a)

are a set of rules that ensure that accounting statements are prepaid in the same way, whatever the situation.

b)

area sequence of events and processes used to create the financial records of a business

c)

is a book in which accounts are kept

d)

are the steps in the accounting process

35.

Books of original entry

a)

are a set of rules that ensure that accounting statements are prepaid in the same way, whatever the situation.

b)

area sequence of events and processes used to create the financial records of a business

c)

are books of first entry where transactions are listed prior to being posted to double-entry records.

d)

are the steps in the accounting process

36.

What are the steps of the accounting cycle.

a)

1) Collecting source document, 2) Listing key details in books of original entry, 3) posting the information to ledger accounts, 4) Checking and control systems to ensure accuracy, 5) Summarizing financial information.

b)

1) Listing key details in books of original entry, 2) posting the information to ledger accounts, 3) Checking and control systems to ensure accuracy, 5) Summarizing financial information.

c)

1) Listing key details in books of original entry, 2) posting the information to ledger accounts, 3) Summarizing financial information.

d)

1) Checking and control systems to ensure accuracy, 2) Summarizing financial information.

37.

A business where one individual owns and controls the business.

a)

Partnership

b)

Sole Proprietorship

c)

Limited Liability Companies

d)

Co-operatives

e)

Non-profit organizations

38.

A business where two or more individuals own the business

a)

Partnership

b)

Sole Proprietorship

c)

Limited Liability Companies

d)

Co-operatives

e)

Non-profit organizations

39.

A company owned by shareholders.

a)

Partnership

b)

Sole Proprietorship

c)

Limited Liability Companies

d)

Co-operatives

e)

Non-profit organizations

40.

An organization formed and controlled by members. They are run to provide their members with good and services rather than to make a profit.

a)

Partnership

b)

Sole Proprietorship

c)

Limited Liability Companies

d)

Co-operatives

e)

Non-profit organizations

41.

Include clubs and societies that are formed by thier members so they can meet for particular activities, possibly social or sporting. These organizations do not aim to make a profit but have to be financially viable in order to survive.

a)

Partnership

b)

Sole Proprietorship

c)

Limited Liability Companies

d)

Co-operatives

e)

Non-profit organizations

Business Basics Midterm Quiz

Total questions: 41

Worksheet time: 24mins

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