Business Accounting MCQ Quiz Hub

1. The revenues and expenses of a company are displayed in which statement?
Balance Sheet
Cash Flow Statement
Income Statement
None of the above

2. The main Purpose of Financial Accounting is?
To Provide financial information to shareholders
To maintain balance sheet
To minimize taxes.
To keep track of liabilities

3. The expanded accounting equation is used by which statement?
Cash Flow Statement
Balance Sheet
Income Statement
None of the above

4. What type of balance do asset accounts have?
Contra
Credit
Debit
All of the above

5. The kind of debts which are needed to be repaid in a short term is known as?
Fixed Liabilities
Current Liabilities
Depreciating Assets
Intangible Assets

6. What type of balance do asset accounts have?
Contra
Credit
Debit
All of the above

7. The kind of debts which are needed to be repaid in a short term is known as?
Fixed Liabilities
Current Liabilities
Depreciating Assets
Intangible Assets

8. The account which increases equity is known as?
Debit Account
Credit Account
Revenue
Treasury Stock

9. What are the long-term assets which do not have any physical existence?
Intangible Assets
Tangible Assets
Current Liabilities
Current Assets

10. What is the supporting evidence in a business transaction called?
Journal
Ledger
Voucher
Contra Voucher

11. The Expenses, Profit & Loss of an organisation are recorded in which account?
Current Account
Personal Account
Nominal Account
None of the above

12. Which person owes an amount to a business organisation for buying goods and services on a credit basis?
Creditors
Debtors
Owner
None of the above

13. When are balance sheets prepared?
Quarterly
Yearly
Monthly
None of the above

14. What is Activity Ratio?
Financial Ratios that measure a firm's ability to convert different accounts into a balance sheet.
Ratios that measure a company's ability to pay debt obligations and its margin of safety.
Financial measurements that assess the ability of a company to meet its financial obligations
The ratio that evaluates the company's ability to generate income as compared to its expenses.

15. What is Current Liability?
Assets of a company that are expected to be sold or used as a result of standard business operations over the next year.
A potential liability that may occur in the future.
Company's short-term financial obligations that are due within one year or within a normal operating cycle.
Obligations listed on the balance sheet not due for more than a year.

16. What is an operating cycle?
metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
The time it takes a company to buy goods, sell them and receive cash from the sale of said goods.
The process of hiring personnel to conduct the daily operations of the business.
collective process of identifying, analysing, and recording the accounting events of a company.

17. What are Outstanding Expenses?
Expenses which are not paid off in the current balance sheet.
The necessss going from day-to-day.ary purchases that keep a busine
Type of expense that is due but has not been paid.
None of the above

18. What is Bank Overdraft?
A document used by a company's accounts payable department containing the supporting documents for an invoice.
A negotiable instrument where payment is guaranteed by the issuing bank.
A negotiable instrument similar to a bill of exchange.
A line of credit that covers your transactions if your bank account balance drops below zero.

19. Which Ratio protects the Creditors?
Lower Debt Equity Ratio
Liquidity Assets
Higher Inventory Ratio
Return on Investment Ratio

20. Return on Investment =?
Net Sales x 100
Fixed Assets x 100
Total Assets x 100
None of the above

21. What does improper utilization of resources and over investment in assets indicate?
Low Return on Investment
Low Sales
High Sales
Depreciation of Assets

22. Which budget is prepared for Advertising, Salary, and Market Analysis?
Operating Budget
Sales Expenditure Budget
Static Budget
Labor Budget

23. What does a master budget include?
Material Budget
Production Budget
Sales Budget
All of the above

24. Transaction is referred as which event in accounting?
Political Event
Economic Event
Dividend
Cash Transaction

25. Recording financial transaction is part of?
Accounting
Book Keeping
Data Entry
Journal

26. Examining of financial information refers to?
Analysis
Auditing
Recording
Balance Sheet

27. Who is an external user of financial statements?
Shareholders
CEO
Manager
Creditor

28. Identifying an economic transaction is which phase of accounting cycle?
First
Second
Third
Last

29. What is a Company?
Legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that operates as a business aiming to generate a profit for its owners.
Business organization which is owned and carried on jointly by the members of the Hindu Undivided Family.
Unincorporated business with only one owner who pays personal income tax on profits earned.
A legal entity formed by a group of individuals to engage in and operate a business.

30. What are Liabilities?
Resources of a Company
Expenses of a Company
Obligations of a Company
None of the above

31. What is an Income?
A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit.
Obligation between one party and another not yet completed or paid for.
Earning from investments and other sources unrelated to employment.
The revenue a business earns from selling its goods and services.

32. An Asset possessed by the business should be shown in which part of balance sheet?
Liabilities
Assets
Fixed Assets
Revenues

33. What is the common characteristic of all the assets owned by a company?
Intangible
Long Life
Future Economic Benefits
None of the above

34. Capital + Liabilities = ?
Revenue
Assets
Voucher
Unearned Income

35. Owner's claim on total assets is?
Liability
Assets
Equity
Cash

36. What are Drawings?
Accounting method used to allocate the cost of a tangible or physical asset over its useful life or life expectancy.
The amount of cash that a business disburses.
An increase in the value of an asset over time
. Money that is taken from the business account for personal use.

37. What occurs when expenses are greater than income?
Net Loss
Net Profit
Debts
Decrease in Assets

38. What is a nominal account?
An interest-bearing deposit account held at a bank or other financial institution.t that represents a country's imports and exports of goods and services.The
The account that represents a country's imports and exports of goods and services.
The account in which accounting transactions are stored for one fiscal year.
None of the above

39. . What is a Real Account?
An interest-bearing deposit account held at a bank or other financial institution.
The account that represents a country's imports and exports of goods and services.
The account in which accounting transactions are stored for one fiscal year.
An account that retains and rolls forward its ending balance at the end of the year.

40. When does the capital of a company increases?
Drawings Decrease
Liabilities Decrease
Revenue Increases
Interest on capital increases

41. Revenue - Expenses =?
Net Income
Net Loss
Depreciation
None of the above

42. What causes the decrease in Assets?
Cash Purchases
Liabilities
Payment of Expenses
Retained Earnings

43. Assets - Liabilities = ?
Income
Gains
Earnings
Capital

44. What increases the Assets & Equity?
Fresh Capital
Debts paid off
Revenues
None of the above

45. What is the book of original entries?
Voucher Book
General Journa
l Day Book
Account Statement

46. How many accounts are affected by a business transaction?
One
Two
Three
Several

47. Day book is also known as?
Journal
Voucher
Ledger
Book Keeping

48. What is a compound entry?
An entry involving more than two accounts.
Accounting entry in which just one account is debited and one is credited.
An accounting entry in which there is more than one debit, more than one credit, or more than one of both debits and credits.
Entry that is used to record a business transaction in the accounting records of a business.

49. Purchases are Debited when?
Goods are purchased on cash
Goods are sold at a discount
Goods are purchased on credit
Goods are lost

50. When are Drawing Debited?
Cash withdrawn for personal use
Cash withdrawn for payment of goods
Cash withdrawn for salary
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