Question # 1

The purchase of machinery on account would:

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Increase one asset and decrease another asset

Increase an asset and decrease liability

Increase an asset and increase capital

Increase an asset and increase a liability

Unearned income is shown as

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Assets

Expenses

Liabilities

Income

The discount which is calculated on list price of goods is called

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Trade discount

Rebate

Cash discount

None of these

Errors which affect income statement belong to

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Real A/c

Personal A/c

Nominal A/c

None of these

Which of these accounts is increased by credit entries:

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Machinery A/c

Rent A/c

Sales A/c

Purchase A/c

Freight paid on machinery purchased is a

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Revenue expenditure

Capital expenditure

Capital loss

Revenue loss

Compound entry affected at least

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Two account

One account

Three account

Four account

To any business bad debts is

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An asset

An Income

A loss

A liability

Trial balance is prepared to detect

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Errors of omission

Compensating errors

Errors of commission

Errors of principles

Accounts which are related with properties are known as

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Real accounts

Nominal accounts

Property accounts

A and C are correct Accounting principles:

Excess of assets over liabilities is known as:

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Capital fund

Accumulated fund

Surplus fund

All options are correct

Endorsement is made:

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For settlement of debts

For settlement of income

For settlement of profit

None

Quick assets are

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Cash in hand

Cash at bank

Debtors

All of the above

The primary object of non-profit organizations is

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Not to earn profit

Work for the welfare of society

Buy/sell goods

A and B but not C

During period of rising material prices, ----------- method results in profit inflation

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LIFO

FIFO

Weighted average

All of the above

Difference in cost of alternative choices is called

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Total costing

Differential costing

Full costing

Variable costing

Debentures are

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Fixed assets

Fixed liabilities

Capital

Prepaid expenses

The bills which are drawn and accepted against the sale and purchase of goods on credits are called

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Trade bills

Bill of exchange

In-land bills

Foreign bills

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