Introduction to Accounting and its Terminology MCQs

21)

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

A)  Long life of assetsWRONG ANSWER

B)  Value of assetsWRONG ANSWER

C)  Intangible nature of assetsWRONG ANSWER

D)  Future economic benefitsRIGHT ANSWER!!!


22)

What is the basic accounting equation?

A)  Capital+Liabilities=AssetsRIGHT ANSWER!!!

B)  Assets+ liabilities =CapitalWRONG ANSWER

C)  Capital+assets=liabilitiesWRONG ANSWER

D)  Liabilities+CapitalWRONG ANSWER


23)

Which of the following is a liability?

A)  CashWRONG ANSWER

B)  EquipmentWRONG ANSWER

C)  DebtorsWRONG ANSWER

D)  CreditorsRIGHT ANSWER!!!


24)

What is equity?

A)  Cash from the business WRONG ANSWER

B)  liability of a businessWRONG ANSWER

C)  Owner's claim on total assetsRIGHT ANSWER!!!

D)  Owner's claim on total liabilitiesWRONG ANSWER


25)

Identify the asset from the following

A)  Cash and cash equivalentRIGHT ANSWER!!!

B)  CreditorsWRONG ANSWER

C)  Notes payableWRONG ANSWER

D)  Bank loanWRONG ANSWER


26)

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

A)  DepreciationWRONG ANSWER

B)  DrawingsRIGHT ANSWER!!!

C)  Outflow of cashWRONG ANSWER

D)  AppreciationWRONG ANSWER


27)

Net loss occurs when

A)  Expenses are greater than IncomeRIGHT ANSWER!!!

B)  Expenses are less than IncomeWRONG ANSWER

C)  Expenses=IncomeWRONG ANSWER

D)  Liabilities are greater than incomeWRONG ANSWER


28)

Double entry implies that

A)  Recording entries in journalWRONG ANSWER

B)  Recoding entries in Ledger accountWRONG ANSWER

C)  Recording two aspects of every transactionRIGHT ANSWER!!!

D)  Recording every transaction in booksWRONG ANSWER


29)

Identify the nominal account

A)  Machinery accountWRONG ANSWER

B)  Building accountWRONG ANSWER

C)  Creditors accountWRONG ANSWER

D)  Rent expenses accountRIGHT ANSWER!!!


30)

Which of the following accounts can be classified as a real account?

A)  Rent expenses accountWRONG ANSWER

B)  Rent income accountWRONG ANSWER

C)  insurance expenses accountWRONG ANSWER

D)  Cash accountRIGHT ANSWER!!!