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WorksheetsChapter I: Introduction to Accounting
Total questions: 66
Worksheet time: 33mins
Discount allowed to customer is a ………………..to the business
Expense
Income
Asset
Liability
Capital refers to the amount invested by the owner in the business. Liability refers to the amount which the business owes to others. Which of the following statements is correct?
Capital is the amount invested by the owner; Liability is the amount owed by the business to others.
Capital is the amount owed by the business; Liability is the amount invested by the owner.
Capital and Liability both refer to the amount invested by the owner.
Capital and Liability both refer to the amount owed by the business to others.
Which of the following is an important advantage of accounting?
It helps in recording financial transactions systematically.
It increases the amount of money in a business automatically.
It eliminates the need for financial planning.
It guarantees business success without effort.
Identify the events not amenable to accounting treatment
Sale of goods
Salary paid
Directors are appointed
Rent paid
Find out the odd one out
Machinery
Land and building
Closing stock
Furniture
Which of the following is NOT an objective of accounting?
To provide information for decision making
To ascertain profit or loss
To maintain records of financial transactions
To promote sales and marketing
What represent the amount invested by the owner into the business?
Asset
Revenue
Capital
If Mr. Kumar purchased from our business for Rs. 10,000. He is our creditor.
True
False
Find odd one out
Manager
Bank
Government
Identify the debit and credit aspects of the following transaction: Goods taken by the owner for his personal use.
Debit: Drawings Account, Credit: Purchases Account
Debit: Purchases Account, Credit: Drawings Account
Debit: Cash Account, Credit: Drawings Account
Debit: Drawings Account, Credit: Cash Account
Classify the following items into Revenue expense, capital expenditure and deferred expenditure: 1. Computer purchased 2. Salary paid 3. Huge advertisement expense 4. Goods purchased. Which of the following is the correct classification?
1. Capital expenditure, 2. Revenue expense, 3. Deferred expenditure, 4. Revenue expense
1. Revenue expense, 2. Capital expenditure, 3. Deferred expenditure, 4. Capital expenditure
1. Deferred expenditure, 2. Revenue expense, 3. Capital expenditure, 4. Revenue expense
1. Revenue expense, 2. Deferred expenditure, 3. Capital expenditure, 4. Revenue expense
Fund based accounting is used by ……………………………
Multinational companies
Trading organization
Government organization
manufacturing organization
Fathima took an educational loan of Rs. 10,000 from SBI, Calicut the relationship which exists between SBI and Fathima is
Fathima is the debtor of SBI, Calicut
SBI, Calicut is the debtor of Fathima
Fathima is the creditor of SBI, Calicut
Fathima is the proprietor of SBI, Calicut
Do you agree with the above classification? If not, correct it.
Yes, I agree with the above classification.
No, I do not agree with the above classification.
The classification needs minor corrections.
The classification is completely incorrect.
Choose the correct sequence
Identifying, Recording, Classifying, Summarising
Identifying, Recording, Summarising, Classifying
Recording, Summarising, Classifying, Identifying
Identifying, Classifying, Recording, Summarising
________ is the cost incurred for the use of things or services for the purpose of generating revenue.
Capital
Expense
Income
Liabilities
Complete the series based on the hint given: Hint: Intangible asset – Goodwill i. Fictitious asset - ............................. ii. Liquid asset - .............................
i. Preliminary expenses, underwriting commission etc. ii. cash / bank etc.
i. Patents, trademarks etc. ii. inventory / stock etc.
i. Land, building etc. ii. receivables / debtors etc.
i. Investments, securities etc. ii. machinery / equipment etc.
18. Name any two internal users of accounting information of your choice.
Owners and Managers
Creditors and Customers
Government and Suppliers
Investors and Lenders
Mr. Cino is a furniture dealer at Perumbavoor. His closing stock of furniture is Rs. 300000 it is considered as a/an …………………asset.
Fixed
Current
Intangible
None of these
Goods in business are called by different names. Give their names in the following two cases: i. Value of goods remaining at the end of a period ii. Return of goods from customers, which are defective
i. closing stock ii. Sales Return
i. opening stock ii. Purchase Return
i. finished goods ii. Purchase Return
i. raw materials ii. Sales Return
Under which one of the following can the asset of 'Debtors' be well placed?
Real assets
Fixed assets
Current assets
Human asset
In how many ways are assets classified? Mention these ways.
a) Fixed asset, Tangible asset, Intangible asset, Wasting asset, Fictitious asset b) Current asset
a) Fixed asset, Liquid asset, Intangible asset, Fictitious asset b) Current asset
a) Fixed asset, Tangible asset, Intangible asset, Liquid asset b) Current asset
a) Fixed asset, Tangible asset, Intangible asset, Wasting asset b) Liquid asset
Pick out the wrong Pair. State the reason.
Salary, Rent – others are assets
Furniture, Building – others are expenses
Cash, Bank – others are liabilities
Stock, Debtors – others are incomes
The creditors and bankers need qualitative accounting information for taking appropriate decisions. What qualitative features do they expect in accounting information?
1) Reliability 2) Relevance 3) Understandability 4) Comparability
1) Timeliness 2) Flexibility 3) Simplicity 4) Accessibility
1) Profitability 2) Liquidity 3) Growth 4) Expansion
1) Accuracy 2) Transparency 3) Efficiency 4) Productivity
Which one of the following is not a business transaction?
Bought motorcar for business ₹ 100000
Paid employee's salary ₹ 1000
Paid son's fees from business ₹2000
Paid son's fees from his personal account ₹ 2000.
Which one of the following is NOT a fixed asset?
Goodwill
Stock of goods
Furniture
Land
Briefly explain any two objectives of accounting.
1) To maintain records of business and loss 2) Calculation of profit 3) Ascertain the financial position of the business. 4) Providing information to users (any two)
1) To increase the number of employees 2) To expand office space 3) To reduce working hours 4) To improve customer entertainment
On 1st April, 2016 Thomas purchased goods from Arun for Rs. 6,000 on credit. Identify the debtor and creditor in this transaction.
Debtor- Thomas, Creditor- Arun
Debtor- Arun, Creditor- Thomas
Debtor- Thomas, Creditor- Thomas
Debtor- Arun, Creditor- Arun
Classify the following assets under appropriate heads: a) Cash b) Machinery c) Land d) Stock
Fixed Asset- Machinery, land; Current Asset- Cash, Stock
Fixed Asset- Cash, Stock; Current Asset- Machinery, Land
Fixed Asset- Stock, Land; Current Asset- Cash, Machinery
Fixed Asset- Cash, Machinery; Current Asset- Land, Stock
Identify the debtor in the above transaction.
Vinod
Rahul
Priya
Amit
Which one of the following events is NOT a business transaction?
Furniture purchased for cash
Goods are ordered for next month
10% of debtors are treated as bad
Salary outstanding to the employee.
Classify the following items as Revenue, Expense, Gain and Profit: i. Profit on sale of investment ii. Interest received iii. Goods sold at above cost iv. Depreciation
I) Gain II) Revenue III) Profit IV) Expense
I) Revenue II) Gain III) Expense IV) Profit
I) Expense II) Profit III) Gain IV) Revenue
I) Profit II) Expense III) Revenue IV) Gain
Notebooks purchased by a stationery shop comes under
Assets
Income
Purchases
Liabilities
In a business organization, goods are known in different names. Write the names used for the goods in the following cases.
a) Closing stock b) sales return/ return inward c) sales
a) Opening stock b) purchase return/ return outward c) purchases
a) Finished goods b) damaged goods c) purchases
a) Raw materials b) purchase return/ return inward c) purchases
Pick the WRONG pair:
Land, building
Cash, Stock
Debtors, Machinery
Copyright, Patent
36. 'Accounting is a post mortem survey'. Do you agree? Justify your answer.
Yes, because accounting records and analyzes past financial transactions.
No, because accounting predicts future financial outcomes.
Yes, because accounting only deals with future events.
No, because accounting is not related to financial transactions.
Creative Traders provides accounting information to its users whenever it is required for. Specify the qualitative characteristics of accounting:
Understandability
Relevance
Comparability
Reliability
Suresh advanced 3 months' salary to an employee of his firm. This advance salary is:
Revenue expense
Capital expense
Current asset
Current liability
39. Which of the following is the correct example for each term: Revenue, Gain, Short-term liability, and Fixed assets?
Revenue: Sale of goods; Gain: Profit on sale of asset; Short-term liability: Outstanding expenses; Fixed assets: Machinery
Revenue: Interest received; Gain: Sale of goods; Short-term liability: Land; Fixed assets: Outstanding expenses
Revenue: Machinery; Gain: Outstanding expenses; Short-term liability: Sale of goods; Fixed assets: Profit on sale of asset
Revenue: Profit on sale of asset; Gain: Sale of goods; Short-term liability: Machinery; Fixed assets: Interest received
The person who owes money to the business is known as _____
Debtor
Creditor
Partner
None of these
The objectives of accounting include which of the following?
Recording financial transactions, providing information to users, and assisting in decision making
Increasing company profits, reducing taxes, and hiring employees
Designing marketing strategies, managing human resources, and improving customer service
Producing goods, selling products, and advertising services
Choose an internal user from the given users of accounting information:
Creditors
Bank
Managers
Government
43. The three branches of accounting are:
Financial Accounting, Cost Accounting, Management Accounting
Financial Accounting, Tax Accounting, Auditing
Cost Accounting, Auditing, Bookkeeping
Management Accounting, Tax Accounting, Bookkeeping
Cash or other assets invested by the owner in the business is ______.
Fixed Asset
Capital
Current Asset
None of these
Match the following: (a) A person who owes money to an enterprise (b) Withdrawal of money or goods by the owner from the business (c) Excess of revenue over expenses (d) Economic resources of an enterprise
Profit
Assets
Drawings
Debtor
Complete the series from the items given in the brackets.
I. Revenue Expenditure – Salary II. Capital Expenditure – Machinery III. Revenue Receipts – Rent Received IV. Capital Receipts – Bank Loan
I. Revenue Expenditure – Rent Received II. Capital Expenditure – Salary III. Revenue Receipts – Machinery IV. Capital Receipts – Bank Loan
I. Revenue Expenditure – Machinery II. Capital Expenditure – Salary III. Revenue Receipts – Bank Loan IV. Capital Receipts – Rent Received
I. Revenue Expenditure – Bank Loan II. Capital Expenditure – Rent Received III. Revenue Receipts – Salary IV. Capital Receipts – Machinery
Briefly explain about any 3 qualitative characteristics of accounting.
Relevance, Reliability, Comparability
Liquidity, Profitability, Solvency
Assets, Liabilities, Equity
Cost, Revenue, Expense
Accounting has certain objectives to business. Which of the following is a primary objective of accounting?
To provide financial information for decision making
To increase the number of employees
To advertise products and services
To manufacture goods
Which among the following is an intangible asset?
Goodwill
Building
Cash
Stock of goods
(a) The person to whom the business owes Money in …………. ? (b) Money invested by businessman into the business ……….. ?
a. Creditor b. Capital
a. Debtor b. Asset
a. Owner b. Liability
a. Customer b. Revenue
Classify the following users of accounting information into internal and external users: (a) Chief Executive Officer (b) Customers (c) Finance Officer (d) Plant Manager (e) Labour Unions (f) Banks
Internal Users: (a) Chief Executive Officer, (c) Finance Officer, (d) Plant Manager; External Users: (b) Customers, (e) Labour Unions, (f) Banks
Internal Users: (a) Chief Executive Officer, (b) Customers, (c) Finance Officer; External Users: (d) Plant Manager, (e) Labour Unions, (f) Banks
Internal Users: (a) Chief Executive Officer, (e) Labour Unions, (f) Banks; External Users: (b) Customers, (c) Finance Officer, (d) Plant Manager
Internal Users: (b) Customers, (c) Finance Officer, (d) Plant Manager; External Users: (a) Chief Executive Officer, (e) Labour Unions, (f) Banks
Name the following: (a) Withdrawal of money by the owner from the business for personal use. (b) The amount of goods lying unsold at the end of an accounting period. (c) Excess of income over expenditure of a business organization. (d) The documentary evidence in support of a transaction.
a. Drawings b. Closing stock c. Profit d. Source Documents
a. Capital b. Opening stock c. Loss d. Invoice
a. Assets b. Purchases c. Revenue d. Voucher
a. Liabilities b. Sales c. Expense d. Receipt
Costs incurred by a business in the process of earning revenue are called as
Capital Expenditure
Expenses
Capital
Assets
54. Fill the blank as per the hint given: Hint: Investment by the owner in the firm - Capital (a) Assets held for a short period of time - -------- (b) -------------------------------------- - Debtor
a) Current Asset
b) Fixed Asset
c) Liability
d) Revenue
55. Select any three objectives of Accounting.
To maintain records, ascertain profit or loss, and determine financial position
To increase sales, reduce expenses, and expand market share
To hire employees, develop products, and advertise services
To conduct surveys, analyze competitors, and set prices
A person to whom the business owes money is called
Debtor
Creditor
Manager
Partner
State the qualitative characteristics of accounting information.
Relevance, reliability, comparability, and understandability
Profitability, liquidity, solvency, and efficiency
Accuracy, speed, flexibility, and scalability
Transparency, accountability, growth, and innovation
Amount invested by the owner in the business is called _______.
Capital
Revenue
Liability
Asset
State any three objectives of accounting.
To maintain records, ascertain profit or loss, and depict financial position
To increase sales, reduce expenses, and expand market share
To hire employees, develop products, and advertise services
To set prices, negotiate contracts, and manage inventory
60. Heavy expenditure incurred on advertising is ________.
(d) Deferred Revenue Expenditure
(a) Capital Expenditure
(b) Revenue Expenditure
(c) Contingent Expenditure
The person who owes money to the firm is ________.
(a) Debtor
(b) Creditor
(c) Owner
(d) Manager
List out the qualitative characteristics of Accounting information.
Relevance, Reliability, Comparability, Understandability
Profitability, Liquidity, Solvency, Growth
Accuracy, Speed, Volume, Cost
Transparency, Flexibility, Simplicity, Security
Which of the following are objectives of Accounting?
To ascertain profit or loss, to know the financial position, and to provide information for decision making.
To increase company sales, to hire employees, and to design marketing strategies.
To manufacture products, to conduct market research, and to expand globally.
To develop software, to train staff, and to manage customer relations.
The documentary evidence in support of a transaction is
Circular
Debtor
Inventory
Voucher
Which of the following are qualitative characteristics of accounting information?
Relevance, Reliability, Comparability
Profitability, Liquidity, Solvency
Cost, Volume, Turnover
Efficiency, Productivity, Growth
66. Briefly explain. (a) Capital (b) Expenses (c) Drawings (d) Current Assets. Which of the following best describes 'Capital' in accounting?
Money invested by the owner in the business
Goods purchased for resale
Money withdrawn by the owner for personal use
Assets expected to be converted into cash within a year
