MCQs
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Answer: Option D. -> Written Down Value (WDV)
In balance sheet, fixed assets are shown at Written Down Value (WDV). If the asset is not impaired and the company operates under GAAP, then the cost model must be used.
In balance sheet, fixed assets are shown at Written Down Value (WDV). If the asset is not impaired and the company operates under GAAP, then the cost model must be used.
Answer: Option B. -> Earned
The accrual basis of accounting records revenues when they are earned. In other words, under the accrual basis of accounting, the receipt of cash and the payment of cash are not the focus of reporting revenues and expenses.
The accrual basis of accounting records revenues when they are earned. In other words, under the accrual basis of accounting, the receipt of cash and the payment of cash are not the focus of reporting revenues and expenses.
Answer: Option D. -> Credit sales
Credit sales will be shown on debit side of debtors account. Credit sales means allowances of goods to customers in order to pay in advance.
Credit sales will be shown on debit side of debtors account. Credit sales means allowances of goods to customers in order to pay in advance.
Answer: Option A. -> Revenue expense
Interest on loan paid by business is an example of Revenue expense. A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred.
Interest on loan paid by business is an example of Revenue expense. A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred.
Answer: Option A. -> Office equipment account
Office equipment account will be credited when a typewriter is sold that has been used in the office.
Office equipment account will be credited when a typewriter is sold that has been used in the office.
Answer: Option B. -> Depreciation
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the as set, is termed as Depreciation. Depreciation is any method of allocating such net cost to those periods in which the organization is expected to benefit from use of the asset. The asset is referred to as a depreciable asset.
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the as set, is termed as Depreciation. Depreciation is any method of allocating such net cost to those periods in which the organization is expected to benefit from use of the asset. The asset is referred to as a depreciable asset.
Answer: Option A. -> Error of principle
When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called Error of principle. An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting.
When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called Error of principle. An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting.
Answer: Option B. -> Current liabilities and current assets
Current liabilities and current assets items of balance sheet are useful in evaluating a company's liquidity.
Current liabilities and current assets items of balance sheet are useful in evaluating a company's liquidity.
Answer: Option A. -> Issued capital
Issued capital is taken up by the general public. Such capital can be offered to the public at a later date. It is that part of subscribed capital, which is called by the company to pay on shares allotted. It is not necessary for the company to call for the entire amount on shares subscribed for by shareholders.
Issued capital is taken up by the general public. Such capital can be offered to the public at a later date. It is that part of subscribed capital, which is called by the company to pay on shares allotted. It is not necessary for the company to call for the entire amount on shares subscribed for by shareholders.
Answer: Option D. -> Trust
Trust is non-profit organization. A nonprofit organization is a business that has been granted tax-exempt status by the Internal Revenue Service (IRS) because it furthers a social cause and provides a public benefit.
Trust is non-profit organization. A nonprofit organization is a business that has been granted tax-exempt status by the Internal Revenue Service (IRS) because it furthers a social cause and provides a public benefit.
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