We can say that the business is in profit, when:
A) Assets exceed ExpenditureWRONG ANSWER
B) Income exceeds LiabilitiesWRONG ANSWER
C) Income exceeds ExpenditureRIGHT ANSWER!!!
D) Income exceeds LiabilitiesWRONG ANSWER
According to the double entry system of accounting, an account that obtains benefit is:
A) Credit RIGHT ANSWER!!!
B) DebitWRONG ANSWER
C) IncomeWRONG ANSWER
D) No need to show as accounting recordWRONG ANSWER
Term "Credit" means_______ by the business.
A) Receiving of benefits RIGHT ANSWER!!!
B) It has no effect on businessWRONG ANSWER
C) Providing of benefitsWRONG ANSWER
D) It depends upon items WRONG ANSWER
When a Liability is reduced or decreased, it is recorded on the:
A) Left or credit side of the accountWRONG ANSWER
B) Right or debit side of the accountWRONG ANSWER
C) Right or credit side of the accountWRONG ANSWER
D) Left or debit side of the accountRIGHT ANSWER!!!
When Capital is increased by an amount, it is recorded on the:
A) Right or debit side of the accountWRONG ANSWER
B) Left or credit side of the accountWRONG ANSWER
C) Left or debit side of the accountWRONG ANSWER
D) Right or credit side of the accountRIGHT ANSWER!!!
What type of expenses are paid out of Gross Profit?
A) General ExpensesWRONG ANSWER
B) Financial ExpensesWRONG ANSWER
C) Selling ExpensesWRONG ANSWER
D) All of the given optionsRIGHT ANSWER!!!
Which of the following shows summary of a company's financial position at a specific date?
A) Profit & Loss AccountWRONG ANSWER
B) Cash Flow StatementWRONG ANSWER
C) Balance Sheet
D) Income & Expenditure AccountWRONG ANSWER
Which of the following is NOT an example of intangible assets?
A) Franchise rightsWRONG ANSWER
B) Goodwill WRONG ANSWER
C) PatentsWRONG ANSWER
D) LandRIGHT ANSWER!!!
Which of the following is an example of business liability?
A) Land WRONG ANSWER
B) Building WRONG ANSWER
C) Cash WRONG ANSWER
D) Creditors RIGHT ANSWER!!!
The unfavorable balance of Profit and Loss account should be:
A) Added in liabilities WRONG ANSWER
B) Subtracted from current assets WRONG ANSWER
C) Subtracted from capital RIGHT ANSWER!!!
D) Subtracted from liabilities WRONG ANSWER
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