QUESTIONS
1- Define "Accounting and explain that it has a wider scope than the Book Keeping.
2- Explain the important objectives of accounting.
3- Describe briefly the special field of accounting.
4- Explain the importance of accounting for the various sector of society.
5- Define the Double Entry System Explain also its advantages and
Disadvantages.
6- Define Accounting Cycle What are its different phases?
OBJECTIVE TESTS
1- Tick the correct answer.
(a) Capital refers to the equity of owners in the firm.
(b) Liabilities are the claims of outsiders in a business.
(c) Auditing is the examination of accounting record.
(d) Assets consumed within a year are called fixed assets:
(e) Building purchased for office will be included in purchase.
(f) Merchandise Inventory is fixed assets.
(g) Revenue means income.
(h) Cost Accounting and Financial Accounting means the same thing.
(I) The Accountant's work is wider in scope than the Bookkeeper's.
(j) Commission Received in an expense.
ANSWERS:
(a) T, (b) T, (c)T, (d)F, (e)F, (f)F, (g)T, (h)F, (I)T, (j)F
2- Fill in the blanks
(a) Cash and good invested for starting a business are called___________.
(b) Any action undertaken for purpose of earning profit is called_____________.
(c) The art of recording, communicating and interpreting financial activities of the firm is called______________.
(d) The Goods purchased for resale are called_____________.
(e) A person who owns a business is known as________________.
(f) Balance Sheet is a Statement of Assets and __________.
(g) Creditors are the claims of____________ against the assets of a business.
(h) Any dealing between two persons or things is a________________.
(I) Good sold in the course of trading are called as__________________.
(j) Any documentary evidence in support of business transaction is called as____________.
ANSWERS:
(a) Capital
(b) Business
(c) Accounting
(d) Merchandise
(e) Proprietor
(f) Liabilities
(g) Outsiders
(h) Transaction
(I) Sales
(j) Vouchers
3- Each question has some possible answers. Select the correct answer.
1) The art of correctly recording business dealing in set of books is called:
(a) Accounting
(b) Book-keeping
(c) Record keeping
(d) None of the above
2) Any dealing between two persons or things is called as
(a) Book keeping
(b) Journalizing
(c) Accounting
(d) Transaction
3) Total of credit purchases not yet paid is called:
(a) Capital
(b) Creditors
(c) Assets
(d) Debtor
4) The cost of goods and services used in business process is called
(a) Liabilities
(b) Expenses Income
(c) Assets
(d) Income
5) Amount Receivable on account of credit sales is called as
(a) Assets
(b) Account Receivable
(c) Accounts Payable
(d) Income
6) Any physical thing that has money value is called as
(a) Transaction
(b) Asset
(c) Goodwill
(d) Liability
7) The term expenses and expenditure are:
(a) Same in nature
(b) Different in nature
(c) Opposite in nature
(d) None of the above
8) The other name of purchases return is
(a) Return outwards
(b) Return inwards
(c) None of the above
(d) Sales Return
9) The concession given by the seller to the buyer is called as
(a) Cash Discount
(b) Trade Discount
(c) Discount Allowed
(d) Discount Received
10) If the defective goods are returned to the supplier, it is called as
(a) Purchase Returns
(b) Sales Returns
(c) Return inwards
(d) Expenses
ANSWERS:
1- B
2- D
3- B
4- B
5- B
6- B
7- B
8- A
9- B
10- A
4- Write the short answer of the following questions.
(a) What is business?
(b) Define the term "Transaction".
(c) What is Purchases?
(d) What is Assets?
(e) What are Liabilities?
(h) Who is Proprietor?
(g) Define Book-keeping?
(h) What is an Accounting Cycle?
(I) What is Accounting?
(j) What is Equity?
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