1. ________is a separate legal entity that Total capital can be divided in many shares

1. Partnership

2. Sole proprietorship

3. Company

4. Non-profit organization

2. ___________=Gross profit < Operating Expenses

1. Net Profit

2. Gross Profit

3. Net Loss

4. Gross Loss

3. Which of the following account summarizes the profitability of business for aspecific accounting period?

1. Profit & Loss account

2. Cash flow statement

3. Receipt & Payment account

4. Balance Sheet

4. A business event which can be measured in terms of money and must be recorded inbooks of accounts is called:

1. Condition

2. Transaction

3. Information

4. Record

5. An asset must be _______ by the business to be shown as an asset in its"balance sheet"

1. Possessed

2. Owned

3. Controlled

4. Used

6. Entries to expenses such as Rent Expense are usually

1. Debit

2. Credit

7. What should be credited, if rent paid in cash?

1. Landlord's account

2. Rent account

3. Cash account

4. Accounts receivable account

8. Financial accounting provides financial information to all of the following externalusers except:

1. Government agencies

2. Investors

3. Creditors

4. Managers

9. Franchise rights, goodwill and patents are the examples of:

1. Liquid assets

2. Tangible assets

3. Intangible assets

4. Current assets

10. Find out the missing value of an Accounting Equation with the help of given data:Owner's equity Rs. 22,500 Total Liabilities Rs. 80, 385 Cash Rs. 1,000 Bank Rs.2,000 Debtors Rs. 500.

1. Rs. 102,885 other assets

2. Rs. 102,885 current liabilities

3. Rs. 99,885 current liabilities

4. Rs. 99,385 other assets

11. If cost of sales is Rs. 95,000, income from sales Rs. 200,000 and operatingexpenses Rs. 300,000. What will be net result?

1. Rs. 1, 95,000 Losses

2. Rs. 1, 95,000 Profits

3. Rs 1, 05,000 Profits

4. Rs1, 05,000 Losses

12. All of the following are forms of organizations except:

1. Proprietorship

2. Corporation

3. Retailer

4. Partnership

5. None of these

13. Total Sales are calculated by adding:

1. Cash sales and cash received from debtors

2. Credit sales and cash received from debtors

3. Cash sales and credit sales

4. Cash ales and credit purchases

14. Consider the following data: Particulars Rs. Assets 105,000 Owner's equity 70,000Liabilities?

1. Rs. 35,000

2. Rs. 1, 75,000

3. Rs. 7, 35,000

4. Rs. 1, 05,000

15. Which one of the following accounts would usually have a debit balance?

1. Cash

2. Creditors

3. Accounts payable

4. Salaries Expenses

5. None of these

16. Wages paid to labourers working in the manufacturing department is treated as anexpense of:

1. Cost of goods sold

2. Administrative expenses

3. Selling expenses

4. Marketing expenses

17. The maximum number of partners in Pakistan can be fixed at the following:

1. 20

2. 50

3. 75

4. None of these

18. Which of the following accounts can be classified as a real account?

1. Rent expenses account

2. Rent income account

3. Insurance expenses account

4. Cash account

19. An owner investment of each into the business would:

1. Increase assets

2. Decrease liabilities

3. Increase withdrawals

4. Decrease owner's equity

5. None of these

20. What will be debited, if Mohsin commenced business with cash?

1. Cash account

2. Capital account

3. Drawings account

4. Proprietor account

21. Find out the missing value of an Accounting Equation with the help of given data:Bank Rs. 22,500 Other assets Rs. 1,000 Creditors Rs. 8, 385 Other liabilitiesRs. 9,000 Owner's equity?

1. Rs. 6,115

2. Rs. 31,885

3. Rs. 17,385

4. Rs. 14,115

22. In which of the following statement opening stock is shown?

1. Profit and loss account

2. Balance sheet

3. Cash flow statement

4. Owner's equity

23. Cash and other resources that are expected to turn to cash or to be used up withinone year of the balance sheet date are called:

1. Current liability

2. Current assets

3. Fixed assets

4. Long-term assets

24. For which step of accounting process the accountants of business entity preparefinancial statements?

1. Identification of economic event

2. Communication of financial information

3. Recording financial information

4. Making decisions about business

25. Auditing is what?

1. Reporting the financial information

2. Examination of financial statements

3. Preparation financial statements

4. Maintaining the ledger records

Title:Fill in the Blanks

26. Obligations (amounts owed) are reportedon the balance sheet and are referred to as .

27. Liabilities often have the word intheir account title.

Title:Multiple AnswerQuestions

Description:

Indicate the two (ormore) effects on the accounting equation of the business or company.

28. The owner invests personal cash in the business.

1. Assets: Increase

2. Assets: Decrease

3. Assets: No Effect

4. Liabilities: Increase

5. Liabilities: Decrease

6. Liabilities: No Effect

7. Owner's (or Stockholders') Equity: Increase

8. Owner's (or Stockholders') Equity: Decrease

9. Owner's (or Stockholders') Equity: No Effect

29. Thecompany receives cash from a bank loan.

1. Assets: Increase

2. Assets: Decrease

3. Assets: No Effect

4. Liabilities: Increase

5. Liabilities: Decrease

6. Liabilities: No Effect

7. Owner's (or Stockholders') Equity: Increase

8. Owner's (or Stockholders') Equity: Decrease

9. Owner's (or Stockholders') Equity: No Effect

30. CompanyX provides consulting services to Client Q in May. Company X bills Client Q inMay for the agreed upon amount of $5,000. The sales invoice shows that theamount will be due in June. 1

What is the effect on Client Q's accounting equation in June when Client Qremits the $5,000? Also, which accounts will be involved?

1. Assets: Increase

2. Assets: Decrease

3. Assets: No Effect

4. Liabilities: Increase

5. Liabilities: Decrease

6. Liabilities: No Effect

7. Owner's (or Stockholders') Equity: Increase

8. Owner's (or Stockholders') Equity: Decrease

9. Owner's (or Stockholders') Equity: No Effect