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MCQs

Total Questions : 842 | Page 5 of 85 pages
Question 41. An asset must be ________ by the business to be shown as an asset in its balance sheet.
  1.    Possessed
  2.    Owned
  3.    Controlled
  4.    Used
 Discuss Question
Answer: Option C. -> Controlled
Question 42. Which is the most important characteristic that all assets of a business have?
  1.    Long life of assets
  2.    Value of assets
  3.    Intangible nature of assets
  4.    Future economic benefits
 Discuss Question
Answer: Option D. -> Future economic benefits
Question 43. What is the basic accounting equation?
  1.    Capital + Liabilities = assets
  2.    Assets + Liabilities = Capital
  3.    Capital + Assets = Liabilities
  4.    Liabilities - Capital = Assets
 Discuss Question
Answer: Option A. -> Capital + Liabilities = assets
Question 44. Which of the following is a liability?
  1.    Cash
  2.    Equipment
  3.    Debtors
  4.    Creditors
 Discuss Question
Answer: Option D. -> Creditors
Question 45. What is equity?
  1.    Cash from the business
  2.    Liability of a business
  3.    Owner's claim on total assets
  4.    Owner's claim on total liabilities
 Discuss Question
Answer: Option C. -> Owner's claim on total assets
Question 46. Identify the asset from the following
  1.    Cash and cash equivalent
  2.    Creditors
  3.    Notes payable
  4.    Bank loan
 Discuss Question
Answer: Option A. -> Cash and cash equivalent
Question 47. ______ is the withdrawal of cash and goods by the owner of the business for his/her personal use
  1.    Depreciation
  2.    Drawings
  3.    Outflow of cash
  4.    Appreciation
 Discuss Question
Answer: Option B. -> Drawings
Question 48. Net loss occurs when
  1.    Expenses are greater than income
  2.    Expenses are less than income
  3.    Expenses = Income
  4.    Liabilities are greater than income
 Discuss Question
Answer: Option A. -> Expenses are greater than income
Question 49. Double entry implies that
  1.    Recording entries in Journal
  2.    Recording entries in Ledger account
  3.    Recording two aspects of every transaction
  4.    Recording every transaction in books
 Discuss Question
Answer: Option C. -> Recording two aspects of every transaction
Question 50. Identify the nominal account
  1.    Machinery account
  2.    Building account
  3.    Creditors account
  4.    Rent expenses account
 Discuss Question
Answer: Option D. -> Rent expenses account

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