MCQS

MCQs

MCQs

Answers are the BOLD options.

Question 1

Which of the following statements is incorrect?

A          Assets - Capital = Liabilities

B          Liabilities + Assets = Capital

C          Assets - Liabilities = Capital

D          Liabilities + Capital = Assets

Question 2

Which of the following is not an asset?

A          Loan from XYZ Bank

B          Buildings

C          Cash Balance

D          Debtors

Question 3

Which of the following is a liability?

A          Motor vehicles

B          Creditors for the purchase of motor vehicles

C          Prepayment of rent

D          Cash Balance

Question 4

Which of the following is incorrect?

Options not provided

Question 5

Which of the following statements is correct?

Options not provided

 

Question 6

Which of the following should not be included in the sales on the Profit and Loss Account?

A          Goods sold for cash

B          Goods sold on credit

C          Goods included in purchases

D          Office fixtures sold

Question 7

Given the following, what is the amount of Capital? Assets: Premises £20,000; Stock £8,500; Cash £100. Liabilities: Creditors £3,000; Loan from A Adams £4,000 

A          £32400

B          £21400

C          £21100

D          £21600

Question 8

Which of the following is correct?

A          Profit reduces capital

B          Profit increases capital

C          Profit has no effect on capital

D          Capital can only come from profit

Question 9

Net profit is

A          The excess of incomes over expenses

B          The increase in your bank balance

C          Sales less purchases

D          Gross profit plus expenses

Question 10

Net Profit is calculated in

A          The Balance Sheet

B          The Trial Balance

C          The Profit and Loss Account

D          The Trading Account

Question 11

To find the value of closing stock at the end of a year we

A          Hold a stock take and multiply the quantity by sales prices

B          Deduct opening stock from cost of sales

C          Check in the Bank Account

D          Hold a stock take and multiply the quantity by cost prices

Question 12

Which of the following best describes a Balance Sheet?

A          A list of assets

B          A list of balances

C          A statement of incomes and expenses

D          An account proving the books balance

Question 13

Which of these best describes fixed assets?

A          Expensive items we have bought

B          Things we use in the business

C          Items that will not wear out quickly

D          Items of long life not bought specifically for resale

Question 14

The cost of delivery inwards is normally added onto purchases because

A          Delivery outwards goes in the Profit and Loss Account

B          It is an expense associated with buying goods

C          It is associated with motor expenses

D          It should appear in the Balance Sheet

Question 15

Depreciation is

A          The salvage value of a fixed asset

B          The amount spent on replacing fixed assets

C          The part of the cost of a fixed asset that has been consumed during a period

D          The amount it costs to buy a fixed asset

Question 16

A company bought a fixed asset for £3200. It was depreciated using the reducing balance method ...