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June Test Accounts

Total questions: 92

Worksheet time: 2hrs 49mins

Name
Class
Date
1.

Accounting is

a)

recording anything that happens in the business

b)

recording the business transactions

c)

recording, analyzing and interpreting the business transactions

d)

recording, summarizing, analyzing and interpreting the business transactions

2.

The recording of transactions in the accounting books of a business is called :

a)

accounting

b)

book-keeping

c)

liabilities

d)

resources

3.

The purposes of preparing accounting documents and financial statements are to:

I. show information of the resources of the business

II. show who has claims on the business resources

III. help users of financial information make decisions about the business

a)

I and II

b)

I and III

c)

II and III

d)

I, II and III

4.

All businesses are started with the aim of making ...

a)

Capital

b)

sound investments on the stock market

c)

A profit

d)

their owners popular

5.

Which list represents both internal and external users of accounting information?

a)

Banks, government and investors

b)

Creditors, government and managers

c)

Creditors, banks and investors

d)

Suppliers, investors and banks

6.

Which accounting user is correctly matched with its needs?

a)

Banker - to determine taxes to charge the business

b)

Government - to find out if the business can repay a loan

c)

Supplier - to find out if he should invest capital in the business

d)

Owner - to determine the profit of the business over the financial period

7.

Why is accounting necessary in an organization?

a)

It is required by law

b)

To help the government

c)

To report on financial data

d)

To have enough employees

8.

Which of the following stages of the accounting cycle is correct?

a)

Journalising, posting to the ledger, trial balance, financial statement

b)

Posting to the ledger, journalising, trial balance, financial statement

c)

Posting to the ledger, trial balance, financial statement, journalising

d)

Trial balance, financial statement, posting to the ledger, journalising

9.

Which of these are books of original entry?

a)

sales day book

b)

purchases day book

c)

petty cash book

d)

all of the above

10.

When goods are returned by the purchaser to the supplier, the supplier will issue a/an

a)

invoice

b)

credit note

c)

receipt

d)

cheque

11.

Which one is right?

a)

Asset = Owner's equity + Liability

b)

Asset = Owner's equity - Liability

c)

Asset + Owner's equity = Liability

d)

Asset + Owner's equity = expense

12.

Which one is not belongs to liability?

a)

Mobile Phone Bill

b)

Bank Loan

c)

Bank Balance

d)

Owed To Friends

13.

Mr.W has current assets of $500 and total assets of $1500. ABC has current liabilities of $300 and total liabilities of $800. What is the amount of ABC's owner's equity

a)

200

b)

700

c)

900

d)

800

14.

All businesses are started with the aim of making ...

a)

Capital

b)

sound investments on the stock market

c)

A profit

d)

their owners popular

15.

Control over money should be...

a)

strict

b)

lenient

c)

convenient

d)

necessary

16.

Book-keeping is the process of recording...

a)

transactions in books of accounts or by using a computerized system

b)

everything that takes place in a business.

c)

money spent every day.

d)

how much money is paid to workers.

17.

Accounting is the process that involves

a)

revealing how much money is in the bank

b)

budgeting what will be spent only

c)

reporting to stakeholders about potential profits

d)

preparing/presenting, analysing and interpreting financial statements

18.

Two common financial statements prepared are the

a)

Trading and Profit and Loss Account and Balance Sheet

b)

Balance Sheet and Suspense Account

c)

Cash Book and Trading and Profit andLoss Account

d)

Control Account and Balance Sheet

19.

Sole Traders

a)

do not ever employ others

b)

are liable for all business losses/debts and benefit from all profits

c)

are selfish and unable to get along with others

d)

are primarily involved in street vending

20.

Limited Companies

a)

are owned by the government

b)

can be private or public

c)

are separate legal entities and can sue and be sued

d)

limit the liability of shareholders to the same amount for each shareholder

21.

Non-Profit organisations (Choose all that apply)

a)

include clubs and associations

b)

are formed for the benefit of their members

c)

are formed with the intention of making a profit.

d)

prepare Income and Expenditure Accounts

22.

The recording of transactions in the accounting books of a business is called :

a)

accounting

b)

book-keeping

c)

liabilities

d)

resources

23.

The purposes of preparing accounting documents and financial statements are to:

I. show information of the resources of the business

II. show who has claims on the business resources

III. help users of financial information make decisions about the business

a)

I and II

b)

I and III

c)

II and III

d)

I, II and III

24.

If the Cost Price is less than the Selling Price, then there will be a loss.

a)

True

b)

False

25.

Tom helped his uncle move. He spent $30 for gas for his truck, and $20 for work gloves. His uncle paid him $200 for his help. What was Tom's profit?

a)

$50

b)

$150

c)

$250

d)

$30

26.

Nehemiah bought a cell phone for $60 and sold it at a loss of 15%. How much did he sell the cell phone for?

a)

$69

b)

$51

c)

$22

d)

$25

27.

Final account includes

a)

Trial balance

b)

journal entries

c)

trading account ,profit and loss account and balance sheet

d)

ledger account

28.

Import duty paid will be included in

a)

trading account credit side

b)

trading account debit side

c)

profit and loss account debit side

d)

profit and loss account credit side

29.

depreciation on plant and machinery will be recorded in

a)

trading account debit side

b)

balancesheet asset side

c)

profit and loss account debit side

d)

profit and loss account credit side

30.

bad debts will be recorded in

a)

trading account credit side

b)

profit and loss account debit side

c)

balancesheet liablity side

d)

profit and loss account credit side

31.

balancesheet is an account

a)

true

b)

false

c)

not acceptable

d)

its a statement

32.

arrangement of assets and liabilities in the balancesheet is known as

a)

final accounts

b)

accounting

c)

marshalling of balancesheet

d)

posting of entries

33.

contingent liablities will be recorded in

a)

balancesheet asset

b)

trading account

c)

balancesheet liablities

d)

profit and loss account

34.

sale of finished goods will be recorded in

a)

trading account debit side

b)

profit and loss account debit side

c)

profit and loss account credit side

d)

trading account credit side

35.

Gross profit is calculated in

a)

balancesheet

b)

profit and loss account

c)

trading account

d)

ledger

36.

capital +___________________- drawings =net capital recorded in liablities

a)

gross profit

b)

net profit

c)

dividend

d)

purchases

37.

closing stock is recorded in trading account and ___________________________

a)

balancesheet liablity side

b)

balancesheet asset side

c)

profit and loss account

d)

trading account debit side

38.

royalty on production will be recorded in

a)

trading account debit side

b)

trading account credit side

c)

profit and loss account debit side

d)

profit and loss account credit side

39.

Wages and salaries will be recorded in

a)

profit and loss account

b)

balancesheet

c)

Trading account debit side

d)

trading account credit side

40.

discount allowed will be recorded in

a)

trading account debit side

b)

trading account credit side

c)

profit and loss account debit side

d)

profit and loss account credit side

41.

rent received will be recorded in

a)

profit and loss account debit side

b)

profit and loss account credit side

c)

trading account credit side

d)

trading account debit side

42.

return outward means

a)

sales return

b)

purchase return

c)

actual sales

d)

actual purchases

43.

return inwards means

a)

purchase return

b)

sales return

c)

proportionate sales

d)

expected sales

44.

carriage inward is recorded in

a)

trading account credit side

b)

trading account debit side

c)

profit and loss account debit side

d)

profit and loss account credit side

45.

carriage outward is recorded in

a)

trading account debit side

b)

trading account credit side

c)

profit and loss account debit side

d)

profit and loss credit side

46.

value of fixed assets will be recorded in

a)

balancdesheet liablity

b)

balancesheet assets

c)

profit and loss account

d)

trading account

47.
The Income Statement lists a businesses:
a)
Assets and Expenses
b)
Owner's Equity and Revenue
c)
Revenue, cost of goods and Expenses
d)
Expenses and Net Assets
48.
Which of the following is not a type of revenue?
a)
Sales
b)
Commission
c)
Service Fee
d)
Rent paid
49.
A Net Profit occurs if:
a)
Gross Profit is greater than expenses
b)
Expenses greater than Gross Profit
c)
None of the listed choices
50.
An expense is...
a)
money a business spends on the general operation of business
b)
money the business owes to other organisations and people
c)
money Owed to the Business
d)
None of the above
51.
An income statement is also known as a 'Trading, profit/loss & Appropriation Account'?
a)
False
b)
True
52.
An income statement is
a)
A way of listing sales, cost of goods sold and expenses.
b)
Another word for 'Gross Profit'
c)
Same as the Balance Sheet
d)
None of the above.
53.
If Sales = £100000 Cost of Goods = £25000, the Gross Profit will be:
a)
£75000
b)
£40000
c)
£70000
d)
£80000
54.

Revenue = 1000

Cost of Goods Sold = 200

Expenses = 300

Gross Profit = ?

a)

800

b)

500

c)

700

d)

300

55.

Gross profit is calculated by...

a)

Revenue - Total Costs

b)

Revenue + Variable Costs

c)

Revenue - Cost of Sales

d)

Revenue - Fixed Costs

56.

Cost of sales is calculated by...

a)

Opening stock + purchases - closing stock

b)

Opening stock + purchases + closing stock

c)

Adding up all of the stock bought during the year

d)

Opening stock - closing stock

57.

When expenses are greater than income?

a)

expense

b)

net loss

c)

net income

d)

net gain

58.

Income = 1000

Cost of Goods Sold = 200

Expenses = 300

Gross Profit = ?

a)

800

b)

500

c)

700

d)

300

59.

Income = 1000

Cost of Goods Sold = 200

Expenses = 300

Net Profit = ?

a)

800

b)

500

c)

700

d)

300

60.

The amount of cash moving into and out of a business

a)

Cash Flow

b)

Net Worth

61.

purchasing an asset would be an example of

a)

cash inflow

b)

cash outflow

62.

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

a)

Statement of Financial position

b)

Statement of Changes in Equity

c)

Statement of Cash Flows

d)

Income Statement

63.

COGS stands for

a)

cost of goods sales

b)

cost of goods serviced

c)

cost of goods sold

64.

The amount of money a firm spent to buy or produce the products it sold during the period to which the income statement applies.

a)

Statement of Financial Position

b)

Statement of the Comprehensive Income

c)

Statements of Cash Flow

d)

Cost of Goods Sold

65.
Mrs. Amos sold her six flags ticket for $50.00. She bought it for $35.00. What was her profit?
a)
$25.00
b)
$15.00
c)
$85.00
d)
$20.00
66.
When is a business making a profit?
a)
When revenues are higher than costs
b)
When revenues equal costs
c)
When revenues are less than costs
67.

The profit and loss account is also known as the income statement.

a)

TRUE

b)

FALSE

68.

The finnal accountas are divided into three parts: the trading account, the profit and loss account, and the appropriation account.

a)

TRUE

b)

FALSE

69.

problems would immediately arise if accounts were not kept.

a)

TRUE

b)

FALSE

70.

Is the business able to repay the loan to the bank? affect:

a)

Managers

b)

bank

c)

workers

71.

§Final accounts are financial statements compiled by businesses at the end of a particular accounting period such as the end of a fiscal or trading year.

a)

true

b)

false

72.

The profit and loss account shows the trading position of a business at the end of a specified accounting period.

a)

TRUE

b)

FALSE

73.

.................................. refers to the final section of a Profit and loss account and shows how the net profit after interest and tax is distributed, i.e.dividends to shareholders and/or retained profit kept by the business.

a)

The appropriation account

b)

Retained profit

c)

Balance sheet

74.

Is there a universal method to present the final accounts?

a)

YES

b)

NO

75.

COGS (or cost of sales when referring to services) is workedout by the formula:

a)

= Opening stock + Purchases - Closing stock

b)

= Sales revenue - Cost of goods sold

76.

Revenue is the positive difference between a firm's revenues and its costs.

a)

TRUE

b)

FALSE

77.

§Inflating the value of intangible assets, such as brand names and patents owned by the business. Is a clear example of windows dressing.

a)

yes

b)

no

78.

Sales revenue is the income earned from selling goods and services over a given period.

a)

yes

b)

no

79.

gross profit is the direct cost of producing or purchasing the goods that were sold during that period.

a)

TRUE

b)

FALSE

80.

A business can improve its gross profit by reducing costs and/or raising revenue

a)

TRUE

b)

FALSE

81.

The profit and loss account, or the profit statement, shows the net profit (or loss) of a business at the end of a trading period.

a)

TRUE

b)

FALSE

82.

...........................are the indirect or fixed costs of production, e.g. administration charges, management salaries, insurance premiums (for buildings, vehicles and stock) rent of land and property, and stationery costs.

a)

Expenses

b)

dividends

83.

How do we calculate Total Assets?

a)

Fixed Assets - Current Liabilities

b)

Current Assets / Current Liabilities

c)

Fixed Assets + Current Assets

d)

Fixed Assets - Current Assets

84.

Whcih of the following consist of only assets?

a)

Car, Bank Loan, Computer

b)

Creditor, Debtors, Cash at Bank

c)

Debtors. Cash at bank, Building

d)

Cash in hand, cash at bank, creditors

85.

Select the item which is a fixed asset

a)
b)
86.

A (a)   is a resource that is owned by a business.

87.

Select the item which is not a component of a balance sheet.

a)

Fixed Assets

b)

Current Assets

c)

Current Liabilities

d)

Expenses

88.

Select which two items we use when we are calculating the Net Assets/ Working Capital

a)

Total Assets

b)

Financed by

c)

Capital

d)

Total Liabilities

89.

Calculate the total assets?


Current Assets - $100.00

Fixed Assets - $200

Current Liabilities -$300

Capital - $100

a)

300

b)

400

c)

500

d)

200

90.

Which item would represent a liability in a business?

a)
b)
91.

Net Assets = Total Assets -

(a)  

92.

Which item do we always begin the preparation of the balance sheet with?

a)

The Capital

b)

The name of the sole trader or company

c)

The Date

d)

The Assets

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