Commerce

Accounting

Financial management

15) Which one of the following concepts states that the publication or
presentation financial statements should not be delayed?
B) Timing concept

16) land on lease should be shown in balance sheet contrary to fact that company
doesn't own this piece of land. This is the statement of what accounting
concepts?
D) Substance over form Concept

17) "Financial information should be neutral and bias free" is the dictation of
which one of the following

18) A business was commenced on 1st January and it purchased 5 vehicles, each
costing $5000. During the year the business managed to sell 2 vehicles at the
price of $12000. How should the remaining 3 vehicles be valued if the business is
going to continue its operations in the next year?
B) On the basis of going concern

19) A company received cash $1000 in advance for auditing service. However, the
company neither earned this revenue nor made any adjusting entry in its books.
Identify the effect of this omission?
A) Total liabilities to be understated

20) Depreciation is charged on fixed asse to comply with which of the following
accounting principles or concepts?
A) Matching concept

1) Financial statements are prepared mainly for

B) External users of financial informaiton

2) Net profit is computed in which of the following?

B) Income statement

3) Which of the following should be the most appropiate order of current asset in
a balance sheet?
D) Cash, bank, debtor, stock

4) In income statement, gross profit is always equal to

C) Sales-cost of goods sold

5) Office equipment is a ________ asset for a computer manufacturer and the

same office equipment is a _________ asset for a company that deals in these
equipments
D) Fixed, current

6) Identify the external user of financial information or financial statements

D) Investors of the business

7) A statement or report that records the fluctuation in business's capital is

referred as
D) Statement of changes in equity

8) Financial statements mainly help in

D) Communication of economic events

9) Purchases+opening stock-closing stock=?

C) Cost of goods sold

10 Which of the following financial statements shows the financial position of a

business at a specific date?
A) Balance sheet

11) Which of the following financial reports shows the profitable of a business?
A) Income statement

12) Assets minus liabilities equal to

D) Capital

13) Which of the following financial statements shows the movement of cash and
cash equivalents in during an accounting period?
C) Cash flow statement
14) Goodwill is classified as which one of the following assets?
D) Intangible

15) Which of the following does not appear in Balance sheet?

A) Building

16) Which of the following lists down the balances to asset accounts, liability
accounts and capital account balances?
A) Income statement

17) Current assets are also known as

A) Working capital

18) The expenses related to the main operations of business are referred as
D) Operating expenses

19) Cash receipt from the sales fixed assets is recorded under the heading of
C) Investing activities

20) A current asset that is convertible to cash within 3 months can be referred to
as
D) Cash equivalent

1) What is the minimum number of partners required to commence a partnership

business?
C) 2

2) Partnership type of business is formed by the mutual agreement of partners.

What kind of agreement is it?
C) Oral or written agreement

3) In the general form of partnership, liabilities of partners are:

B) unlimited

7) Interest on drawings is:

A) Debited to partner’s current a/c

8) The written agreement of partnership is most com