Question # 1

Raw material destroyed in fire represents

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capital loss

revenue loss

normal loss

both b, c

The favorable balance of bank statement is

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Credit balance

Debit balance

Zero balance

All of these

Any expenditure incurred to increase the earning capacity of a business

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capital expenditure

capital loss

revenue loss

revenue expenditure

Gross profit represents

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Opening stock + purchases

closing stock + direct expenses - sales

closing stock-purchases-direct expenses + sales

purchases - sales

The amount invested by the owner in the business to produce revenue is known as

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Income

Asset

Capital

Liability

Bill receivable account is a:

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Nominal account

Personal account

Real account

Expenses account

The creditor of the business are called:

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Assets

Liabilities

Capital

Income

Goods returned by customers are

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purchases

purchases returns

sales returns

sales

When a bill is discharged the acceptor debits:

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Creditors account

Cash account

Bill payable account

Bill receivable account

Modern system of bookkeeping is

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single entry system

double entry system

modern system

none of these

Assets which have no market value are called

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Wasting assets

Fictitious assets

Intangible assets

Tangible assets

A bill of exchange is a method of payment on

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Cash Basis

Credit Basis

Reserve Basis

Accommodation Basis

Cash account is a

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Personal account

Nominal account

Real account

Both personal and real account

The book use to record all credit purchases is called:

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Purchases book

Purchase return book

Cash book

Creditor book

The process of recording business transaction in the journal is called

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Posting

Journalizing

Classifying

Entry

Expenditure is a capital expenditure because

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The amount involved is heavy

It is the personal expenditure of the owner out of his capital

It is intended to benefit the future period

It is a recurring expenditure

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Principles of accounting Icom Part 1 English Medium Online Test MCQs With Answers

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