Financial Accounting MCQs

Accounting and Finance

How is an invoice for an expense owing shown in the Balance Sheet?

current asset

non-current asset

current liability

non-current liability

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Bill of Exchange

The bills receivable book is a part of the:

Journal

Ledger

Trading account

Profit and loss account

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Capital and Revenue Expenditures

Legal expenses incurred to purchase land are:

Capital expenditures

Recurring expenditures

Revenue expenditures

None of these

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Accounting and Finance

A truck cost $8,000. The price included $36 for petrol. The total payment of $8,000 was debited to the Truck Account. What is the effect on the income statement and balance sheet?

No effect (Income Statement) and No effect (Balance Sheet)

Profit overstated by $36 (income statement) and Non-current assets overstated by $36 (balance sheet)

Profit overstated by $36 (income statement)and Non-current assets understated by $36 (balance sheet)

Profit understated by $36 (income statement) and Non-current assets understated by $36 (balance sheet)

Author: rikazzz Comment

Capital and Revenue Expenditures

An expenditure which is non-recurring and irregular is called:

Revenue expenditure

Short-term expenditure

Capital expenditure

Current expenditure

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Accounting and Finance

A cashbook showed a debit bank balance of $1 234 on 30 June. Items not included on the bank statement at that date were: Unpresented cheques $132 Uncredited deposits $765 What was the balance on the bank statement at 30 June?

$601 debit

$601 credit

$1 867 debit

$1 867 credit

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Accounting and Finance

Does a credit to an expense account increase the account’s balance?

Yes

No

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Accounting and Finance

Why is the general journal used to correct errors in the ledger?

To avoid making alterations in the ledger

To complete the double entry

To provide a record explaining the ledger entries

To save the bookkeeper’s time

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Capital and Revenue Expenditures

Expenses incurred to purchase land property represent:

Revenue loss

Deferred revenue expenditure

Capital loss

Capital expenditure

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Capital and Revenue Expenditures

An expenditure is a capital expenditure because:

Amount is paid in lump sum

It is intended to benefit current period

Amount is large

It is intended to benefit future period

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