WorksheetsAccountingQuiz2
Total questions: 70
Worksheet time: 48mins
What are assets?
Items that have no value
Probable future economic benefits obtained or controlled by a particular entity as the result of past transactions or events
Items that are not useful
Probable future economic benefits that cannot be controlled
Which of the following is a current asset?
Machinery
Accounts receivable
Buildings
Land
What is an example of a tangible asset?
Intellectual property
Patents
Royalty rights
Machinery
What is the term used for decreasing the value of a fixed asset over time?
Depreciating
Amortising
Expensing
Capitalising
What is equity in accounting?
The value of a business's assets after deducting its liabilities
The value of a business's liabilities minus its assets
The value of a business's liabilities after deducting its assets
The value of a business's assets plus its liabilities
What is the accounting equation?
Assets = Liabilities + Equity
Assets - Liabilities = Equity
Assets + Liabilities = Equity
Assets = Liabilities - Equity
What is the term for profits distributed to shareholders?
Dividends
Retained Earnings
Partner Drawings
Drawings
What is the definition of liabilities in accounting?
Probable future gains from present obligations
Possible future sacrifices of economic benefits
Probable future sacrifices of economic benefits
Certain future obligations of economic benefits
What does it mean to buy something on credit?
Agreeing to pay immediately
Agreeing to pay with a discount
Agreeing to pay later
Agreeing to pay in installments
What are non-current liabilities?
Immediate obligations to be settled within a year
Obligations not expected to be settled within a year
Obligations expected to be settled within a year
Potential obligations depending on uncertain events
What is the trial balance?
A report showing the total debits and credits in each account
A report showing the closing balances of all general ledger accounts at a single point in time
Who are the stakeholders of a business?
Employees and managers
Existing and potential investors, lenders, and creditors
What is the link between the trial balance and the balance sheet?
The trial balance and the balance sheet have no connection
The trial balance is used to create the balance sheet
Where are revenue, cost of sales, and laundry costs reported?
Only in the balance sheet
In both the income statement and the balance sheet
What is included in the equity section of the balance sheet?
Retained earnings and owner's equity
Cash, supplies, and equipment
INCOME STATEMENT
Shows a company’s revenues and expenses. It shows a company’s profits and loss.
Displays only the revenues of a company.
Summarizes the cash flow of a company.
Lists the assets and liabilities of a company.
Accounting is...
The process of recording, analyzing, and reporting a company's financial transactions.
A method of budgeting and forecasting future expenses.
The study of economic principles and market behavior.
A system for managing human resources and payroll.
A form for recording transactions in chronological order is called a what?
ledger
journal
register
logbook
The balance of an asset account is always a debit. The balance of a liability or capital account is always a credit. True or False?
True
False
Sometimes true
Always false
Post Closing Trial Balance shows that the accounts that have balances in the General Ledger are equal.
True
False
Partially True
Not Applicable
What is a Business Entity?
An organization created by one or more individuals to conduct business, trade, or engage in similar activities.
A type of investment that guarantees returns.
A legal document required to start a business.
A group of people working together without any formal structure.
____ relates to the confidence that users have that the financial information is reasonably free from bias and error.
comparability
reliability
materiality
relevance
Which of the following concepts, it is assumed that business will exist for an indefinite time period: (2015)
Realization concept
Going concern concept
Business entity concept
None of these
An asset is ordinarily entered on the accounting record at the price paid to acquire it. This accounting concept is called: (2017)
Matching concept
Realization concept
Cost concept
Going concern concept
Sold goods costing Rs. 1500 for Rs. 1750 will increase the owner's equity by Rs:__________(2018)
250
1500
1750
3250
Which of the following convention states "accounting practice should remain unchanged from one period to another"? (2018)
Conservatism
Materiality
Full disclosure
Consistency
The accounting equation should remain in balance because every transaction affects how many accounts?
Only one
Only two
Two or more
All of given options
If the assets of a business are Rs. 100,000 and equity is Rs. 20,000, the value of liability will be?
Rs. 100,000
Rs. 80,000
Rs. 120,000
Rs. 20,000
Which of the following is not a correct form of the Accounting Equation?
Assets = Claims
Assets = Liabilities + Owner Equity
Assets – Liabilities = Owner’s Equity
Assets + Owner’s Equity = Liabilities
A business transaction affects: (2015)
At least one account
At least two accounts
Maximum two accounts
Maximum three accounts
Assets= Capital+--------------.
(a)
Accounting equations is prepared as per ---------------concept.
(a)
Account is having --------------shape.
(a)
Outstanding Rent is ........
Liability
Asset
Expense
Income
Accrued Commission is...
Income
Asset
Liability
Expense
Salary received in advance is ......
Asset
Expense
Income
Liability
Prepaid wages is ......
Liability
Asset
Income
Expense
What account is used when we pay rent in advance for an office building?
Rent Expense
Prepaid Rent
Rent Payable
Rent Revenue
The accounting equation is Assets + Liabilities = Capital. True of False?
True
False
The accounting equation is Assets - Liabilities = Owner's Equity (Capital). True of False?
True
False
The accounting equation is Assets = Liabilities + Owner's Equity (Capital). True of False?
True
False
Every Transaction must balance.
True
False
May be
Financial records should be maintained in a "permanent" form; that is, written in ink or recorded on a computer.
True
False
If $ 70 is recorded as debit entry to an account,, a credit entry of $ 70 must be recorded to another account, which ensures every transaction is balanced, this is called:
Simple entry
General Journal
Double entry-system
No Entry
Double entries implies that
Recording entries in journal
Recording entries in ledger account
Recording two aspects of every transactions
Recording every transaction in books
Communication of economic events is the part of the accounting process that involves
identifying economic events.
quantifying transactions into dollars and cents.
preparing accounting reports.
recording and classifying information
The requirement that only transaction data capable of being expressed in terms of money be included in the accounting records relates to the ______________.
economic entity assumption
monetary unit assumption
cost principle
both b and c
Financial statements combining the operations of Juan Cruz and J. Cruz Plumbing Services would violate the ______________.
economic entity assumption
monetary unit assumption
ownership assumption
cost principle
''GAAP'' refers to ________________.
Guidelines for Accountants, Accounting Procedures
General Association of Accounting Practitioners
General Accounting and Auditing Principles
Generally Accepted Accounting Principles
The accounting process involves all of the following EXCEPT___
identifying economic transactions that are relevant to the business.
communicating financial information to users by preparing financial reports.
recording non-chronological events measured in dollars.
analyzing and interpreting financial reports
The accounting process is correctly sequenced as
identification, communication, recording.
recording, communication, identification.
identification, recording, communication.
communication, recording, identification
Which of the following would NOT be considered internal users of accounting data for a company?
The manager of the company.
Salesmen of the company.
Creditors of the company.
production supervisor of the company
Which of the following is an external user of accounting information?
Labor unions.
Finance directors.
Company officers.
Managers.
A business organized as a corporation______
is not a separate legal entity in most states.
requires that stockholders be personally liable for the debts of the business.
is owned by its stockholders.
terminates when one of its original stockholders dies
The proprietorship form of business organization
must have at least three owners
owner has limited liability for the company debts
legally, the owner has personal liability for the debts of the business
has indefinite life
The basic accounting equation may be expressed as
Assets = Equities.
Assets – Liabilities = Owner's Equity.
Assets = Liabilities + Owner's Equity.
All of these answer choices are correct.
Liabilities are defined as__
future economic benefits.
existing debts and obligations.
possess service potential.
things of value used by the business in its operation.
Owner's equity can be described as
creditorship claim on total assets.
owners' claim against total assets.
benefactor's claim on total assets.
debtor claim on total assets.
Sources of increases to owner's equity are
additional investments by owners.
purchases of merchandise.
withdrawals by the owner.
expenses.
A net loss will result during a time period when
liabilities exceed assets.
drawings exceed investments.
expenses exceed revenues.
revenues exceed expenses.
Concept: a business's records should never be mixed with an owner's personal records and reports
adequate disclosure
business entity
objective evidence
going concern
Concept: When a business activity is large enough to impact business decisions, it should be recorded clearly in the financial statements
realization of revenue
materiality
unit of measurement
consistent reporting
Concept: Financial statements are prepared with the expectation that business will remain in operation indefinately
going concern
materiality
accounting period cycle
matching revenue with expenses
Concept: The same accounting procedures must be followed in the same way each accounting period
accounting period cycle
objective evidence
consistent reporting
materiality
Concept: The revenue from business activities and the expenses associated with earning that revenue are recorded in the same accounting period
adequate disclosure
unit of measurement
historical cost
matching expenses with revenue
Financial Statements of a firm are prepared every year on 31st March, according to which concept?
Money Measurement
Revenue Recognition
Materiality
Accounting Period
Purchase of pen is treated as a revenue expense, according to the concept of
Objectivity
Materiality
Cost
Accounting Period
If one aspect of a transaction is not recorded, which accounting concept is violated?
Cost
Business Entity
Matching
Dual Aspect.
