accounting practice question

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  QUIZ NUMBER : 1 SUBJECT : FAIS CLASS : EMBA 3 rd  TRIMESTER DATE:  2 nd  SEPTEMBER, 2012  Allocated Time: 10 minutes  TOTAL MARKS: 15 NAME:  _____________________________ REGISTRATION NO. :_____________________ 1. Which of the following equations properly represents a derivation of the fundamental accounting equation? a. Assets + liabilities = owner's equity. b. Assets = owner's equity. c. Cash = assets. d. Assets - liabilities = owner's equity. Answer: __d_________________ 2. Mr. Sharif owns land which cost Rs.100,000. If a quick sale of the land was necessary to generate cash, Mr. Sharif feels it would receive only Rs. 80,000. Mr. Sharif continues to report the asset on the balance sheet at Rs. 100,000. This is justified under which of the following concepts? a. The historical-cost principle. b. The value is tied to objective and verifiable past transactions. c. Neither of the above. d. Both a and b . Answer: ___d________________ 3. Retained earnings will change over time because of several factors. Which of the following factors would explain an increase in retained earnings? a. Loss / Net loss. b. Profit / Net income. c. Dividends. d. Investments by stockholders Answer: ____b _______________ 4. ABC Limited had beginning total stockholders' equity of Rs. 160,000. During the year, total assets increased by Rs.240,000 and total liabilities increased by Rs.120,000. ABC Limited’s  net income (profit) was Rs.180,000. No additional investments were made; however, dividends did occur during the year. How much were the dividends? a. Rs.20,000. b. Rs.60,000. c. Rs.140,000. d. Rs.220,000. Answer: _______b____________  5. Accounting is a set of concepts and techniques that are used to measure and report financial information about an economic unit. 6. The shortened form of the accounting equation is assets = liabilities plus owners’ equity . 7. Net Income (Profit) is the excess of a company's revenues over expenses for a given time period. 8. Accounting information is useful only to the owners of a business. true or false Answer: _____false_________ 9. Many accounting measurements are based on the historical-cost principle, which holds that assets and liabilities are initially entered into the accounting records at acquisition cost, but subsequently change as market values change. true or false Answer: _________False_____ 10. A company could experience a net loss and have dividends during the same accounting period. true or false Answer: _______true_______ 11. Which of the following branches of accounting is concerned primarily with external reporting or communicating the results of economic activities to parties outside the firm? managerial accounting or financial accounting Answer: ________financial accounting______ 12. The historical cost principle holds that accounting valuations be tied to objective and verifiable past transactions. 13. The economic resources owned by a company that are expected to benefit future periods are: assets or liabilities Answer: ______assets________ 14. The residual ownership share of a particular entity may be referred to as: assets or owners' equity Answer: ________ owners’ equity  ______ 15. Withdrawals of assets by the stockholders ( dividends ) causes retained earnings to: increase or decrease Answer: ____decrease__________

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Jul 23, 2017

7.5-02-01-03 (1)

Jul 23, 2017
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