WorksheetsAccounting Concept
Total questions: 35
Worksheet time: 26mins
The historical cost principle requires that when assets are acquired, they be recorded at
appraisal value.
cost.
market price.
book value.
GAAP stands for
Generally Accepted Auditing Procedures.
Generally Accepted Accounting Principles.
Generally Accepted Auditing Principles.
Generally Accepted Accounting Procedures
If services are rendered for credit, then
assets will decrease.
liabilities will increase.
owner's equity will increase.
liabilities will decrease.
Assets are recorded at their original purchase price according to the:
Materiality Principle
Historical Cost Principle
Cost Benefit Principle
Consistency Principle
Profit is determined by subtracting income from expenses.
True
False
The equation(s) below represent(s) how the equity in a business is determined:
Equity =
Assets – Liabilities
Assets =
Equity + Liabilities
Liabilities =
Assets – Equity
All of the above
None of the above
(a) is the net worth of a business.
Which of the following is an example of a non-current asset?
Cash in the bank
Employees
Customer that owes our business money
Office computer
A current asset is a resource with a life span that is usually longer than a year.
True
False
An (a) is defined as a present economic resource controlled by the entity as a result of past events.
Which of the following is not one of the elements of the financial statements?
Assets
Equity
Transactions
Income
Is this accounting cycle correct?
Yes
No
When an owner withdraws cash or other assets from a business for personal use, these withdrawals are termed
depletions.
consumptions.
drawings.
a credit line.
Sources of increases to owner's equity are
additional investments by owners.
purchases of merchandise.
withdrawals by the owner.
expenses.
Which of the following is not classified as current assets?
Cash at bank
Inventory
Account receivables
Furnitures
Which of the following is not classified as non - current assets?
Cash in hand
Land
Motor vehicles
Machinery
What one of the following is the accounting equation?
Assets = Liabilities - Capital
Capital = Assets + Liabilities
Capital = Assets - Liabilities
Liabilities = Assets + Capital
Which of the following is classified as current liabilities?
Account receivables
Account payables
Mortgage loan
Loan to Diana
Which of the following is classified as non - current liabilities?
Bank loan
Loan from Linda (repayment in the next 6 months)
Overdraft
Account payables
To INCREASE the balance of ACCOUNTS PAYABLE, would you debit the account or would you credit the account?
Credit
Debit
To DECREASE the balance of SUPPLIES EXPENSE, would you debit the account or would you credit the account?
Credit
Debit
To DECREASE the balance of UNEARNED REVENUE, would you debit the account or would you credit the account?
Credit
Debit
What is the normal balance of Prepaid Insurance?
Debit
Credit
The owner invests personal cash in the business. Cash will ____________________
Increase
Decrease
No effect
The financial statement that reports the assets, liabilities, and (owner's) equity at a specific date is the ____________
Balance Sheet
Income Statement
Statement of Cash Flow
Statement of Owner's Equity
Which accounting assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitments?
Monetary unit assumption
Economic entity assumption
Time period assumption
Going concern assumption
________________ is prepared at the end of the accounting period to show the financial position o f business
Profit & loss account
Balance sheet
Profit & loss statement
Satetment of financial position
Accounts receivable normally has ________ balance
Debit
Credit
Negative
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Journal is a book of ______entry
Secondary
Original
First
None of these
A collection of all accounts is a ___________
Journal
Trial balance
Ledger
Chart of Accounts
Recording of transaction in ledger is called as
Journalizing
Posting
Recording
None of these
A short description of every transaction made in the journal is called
Summary
Narration
Description
Remark
Income is measured on the basics of
Entity concept
Accounting period concept
Going concern concept
None of these
Nominal accounts are related to
Assets & liability
Expenses & losses
Debtors & creditors
None of these
Real accounts are related to
Assets & liability
Expenses & losses
Debtors & creditors
None of these
