MCQs / Q&A

Identify the nominal account

A. Machinery account
B. Building account
C. Creditors account
D. Rent expenses account

Double entry implies that

A. Recording entries in journal
B. Recording entries in Ledger account
C. Recording two aspects of every transaction
D. Recording every transaction in books

Net loss occurs when______________?

A. Expenses are greater than Income
B. Expenses are less than Income
C. Expenses=Income
D. Liabilities are greater than income

_______ the withdrawal of cash and goods by the owner of the busienss for his/her personal use?

A. Depreciation
B. Drawings
C. Outflow of cash
D. Appreciation

Identify the asset from the following:

A. Cash and cash equivalent
B. Creditors
C. Notes payable
D. Bank loan

What is equity?

A. Cash from the business
B. liability of a business
C. Owner’s claim on total assets
D. Owner’s claim on total liabilities

Which of the following is a liability?

A. Cash
B. Equipment
C. Debtors
D. Creditors

What is the basic accounting equation?

A. Capital+Liabilities=Assets
B. Assets+ liabilities =Capital
C. Capital+assets=liabilities
D. Liabilities+Capital

Which is the most important characteristic that all assets of a business have?

A. Long life of assets
B. Value of assets
C. Intangible nature of assets
D. Future economic benefits

Which of the following can be considered as the most important phase of accounting cycle and it is the primarily objective of financial accounting?

A. Identifying transactions
B. Preparing “T Accounts”
C. Preparing financial statements
D. Preparing trial balances