Question # 1 of 15 ( Start time: 03:09:37 PM ) Total Marks: 1
Financial statements are a subset of which of the following?
Select correct option:

1. Financial reporting
2. Financial statement analysis
3. Accounting information
4. Accounting system

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Question # 2 of 15 ( Start time: 03:12:19 PM ) Total Marks: 1
Which of the following is an example of an accrual?
Select correct option:

1. Equipment purchased for use in the business
2. Book-keeping fees collected but not yet earned
3. Six months’ rent paid in advance
4. Interest earned but not yet received



Question # 3 of 15 ( Start time: 03:13:46 PM ) Total Marks: 1
Which of the following is true about "After closing trial balance"?
Select correct option:

1. It may consist of balances of only Real and Personal accounts
2. It may consist of balances of only Nominal and Real accounts
3. It may consist of balances of Nominal, Real and Personal accounts
4. It may consist of balances of only Nominal and Personal accounts

Question # 4 of 15 ( Start time: 03:15:06 PM ) Total Marks: 1
Which of the following may include the “analyzing the transaction” the first step of the accounting cycle?
Select correct option:


1. Determining the transaction amount
2. Determining the effected accounts
3. Identifying the event as a transaction
4. All of the given options




Question # 5 of 15 ( Start time: 03:16:17 PM ) Total Marks: 1
The basic purpose of financial statements is to assist users in evaluating the________
Select correct option:

1. Financial position
2. Profitability of an organization
3. Future prospects
4. All of the given options

Question # 6 of 15 ( Start time: 03:16:56 PM ) Total Marks: 1
Which one of the following would lead to the decrease in the owner’s equity?
Select correct option:

1. Purchasing a piece of land
2. Paying dividends to shareholders
3. Purchasing equipment on account
4. Paying back the principal of a loan

Question # 7 of 15 ( Start time: 03:18:14 PM ) Total Marks: 1
Which of the following type of reports is most frequently used by external users, such as investors?
Select correct option:

1. Financial Statements
2. Tax Forms
3. Management Reports
4. Audit reports

Question # 8 of 15 ( Start time: 03:18:48 PM ) Total Marks: 1
How many parts does each account have?
Select correct option:

1. Two
2. Four
3. Three
4. Five

Question # 9 of 15 ( Start time: 03:19:19 PM ) Total Marks: 1
Identify the statement that is NOT true about the Incomes Account and Expenses Account:
Select correct option:

1. These are the temporary accounts
2. These are closed in Income summery account
3. These may included in closing trial balance
4. These are also known as Nominal Accounts




Question # 10 of 15 ( Start time: 03:20:47 PM ) Total Marks: 1
If the estimated amount of depreciation on equipment for a period is Rs.2000, the adjusting entry to record depreciation would be:
Select correct option:


1. Depreciation expense - Debit; Equipment - Credit
2. Depreciation expense - Debit; Accumulated depreciation - Credit
3. Equipment - Debit; Depreciation expense - Credit
4. Accumulated depreciation - Debit; Depreciation expense - Credit

Question # 11 of 15 ( Start time: 03:22:02 PM ) Total Marks: 1
Which of the following terms present a cause and effect relationship with each other?
Select correct option:


1. Income statement and balance sheet
2. Revenue and assets
3. Assets and liabilities
4. Revenues and expenses



Question # 12 of 15 ( Start time: 03:23:06 PM ) Total Marks: 1
Accounting is called the “language of business” because____________:
Select correct option:


1. It communicates the financial information to the Management only
2. In order to run a business one must have knowledge about accounting
3. Different business accounts are involved in financial statements
4. It helps to organize and communicate financial information to end users

Question # 13 of 15 ( Start time: 03:23:55 PM ) Total Marks: 1
Which one of the following statement shows the effects of cash inflows and outflows?
Select correct option:


1. Balance Sheet
2. Statement of Owner’s Equity
3. Income Statement
4. Statement of Cash Flows




Question # 14 of 15 ( Start time: 03:24:28 PM ) Total Marks: 1
Which of the following would represent a non-cash expense for the business?
Select correct option:


1. Cost of building
2. Cost of inventory
3. Cost of office equipment
4. Depreciation of building


Question # 15 of 15 ( Start time: 03:25:12 PM ) Total Marks: 1
In which of the following account, a credit balance would be an evidence for a mistake or an error?
Select correct option:


1. Mr. A Capital Account
2. Cash account
3. Notes payable account
4. Drawings account










Question # 1 of 15 ( Start time: 03:27:58 PM ) Total Marks: 1
All of the following accounts would be closed in Income Summery Account EXCEPT:
Select correct option:


1. Commission earned account
2. Prepaid insurance
3. Salaries Expense account
4. Wages account



Question # 2 of 15 ( Start time: 03:28:56 PM ) Total Marks: 1
Which of the following is NOT one of the four basic financial statements?
Select correct option:


1. Balance sheet
2. Audit report
3. Income statement
4. Statement of cash flows


Question # 3 of 15 ( Start time: 03:29:40 PM ) Total Marks: 1
Which of the following account would be classified as a current asset on the balance sheet?
Select correct option:


1. Accumulated depreciation
2. Accounts receivable
3. Office equipment
4. Land


Question # 4 of 15 ( Start time: 03:30:23 PM ) Total Marks: 1
Which of the following may include the “analyzing the transaction” the first step of the accounting cycle?
Select correct option:


1. Determining the transaction amount
2. Determining the effected accounts
3. Identifying the event as a transaction
4. All of the given options

Question # 5 of 15 ( Start time: 03:30:54 PM ) Total Marks: 1
Financial statements are a subset of which of the following?
Select correct option:


1. Financial reporting
2. Financial statement analysis
3. Accounting information
4. Accounting system




Question # 6 of 15 ( Start time: 03:31:32 PM ) Total Marks: 1
Which of the following account would NOT be closed to the income summary account at the end of a period?
Select correct option:


1. Rent expense
2. Revenue earned
3. Wages expense
4. Accumulated depreciation

Question # 7 of 15 ( Start time: 03:32:13 PM ) Total Marks: 1
A business has purchased a building on cash, how it would be recorded in the journal?
Select correct option:


1. Building - Debit; Cash - Credit
2. Cash - Debit; Building - Credit
3. Building - Debit; Owner’s equity - Credit
4. Building - Debit; Accounts Payable - Credit


Question # 8 of 15 ( Start time: 03:33:03 PM ) Total Marks: 1
Pre-paid expense is a(n) _________ type of account.
Select correct option:


1. Liability
2. Asset
3. Revenue
4. Expense


Question # 9 of 15 ( Start time: 03:33:56 PM ) Total Marks: 1
An entry that effects more than one accounts is knows as _____________.
Select correct option:


1. Journal entry
2. Compound entry
3. Adjusting entry
4. Reversing entry




Question # 10 of 15 ( Start time: 03:34:29 PM ) Total Marks: 1
Which of the following would be affected by the difference between revenues and expenses?
Select correct option:


1. Assets
2. Owner’s equity
3. Liabilities
4. Capital

Question # 11 of 15 ( Start time: 03:35:51 PM ) Total Marks: 1
According to _______ the personal expenses paid by Mr. A from his own pocket would not be recorded in business books of account.
Select correct option:


1. Realization principle
2. Separate entity principle
3. Matching principle
4. Materiality principle





Question # 12 of 15 ( Start time: 03:37:01 PM ) Total Marks: 1
Which of the following is true about the “Profit” earned by the business?
Select correct option:


1. It shows the amount that is received from the customer in cash only
2. It always results in increase in closing cash balance of a period
3. It affects the owner’s equity and liabilities in balance sheet
4. It may improves the liquidity position of a business



Question # 13 of 15 ( Start time: 03:38:29 PM ) Total Marks: 1
Which of the following term refers to each element of the Balance Sheet?
Select correct option:


1. Ledger
2. Journal General
3. T- Account
4. Account


Question # 14 of 15 ( Start time: 03:39:37 PM ) Total Marks: 1
Which of the following is TRUE about both sides of the trial balance?
Select correct option:


1. Both sides are always positive
2. Both sides are negative
3. Both sides are equal
4. Both sides are not linked which each other


Question # 15 of 15 ( Start time: 03:40:19 PM ) Total Marks: 1
Which of the following represents the negative future cash flows for an enterprise?
Select correct option:


1. Assets
2. Owner’s equity
3. Liabilities
4. Capital