(a) Generally gives best results because it is easy to apply
(b) Should be use din a period of inflation, because it accumulates the fund for the replacement of asset at a uniform rate.
(c) Is the best method used for wasting assets.
(d) Ignores fluctuations in the rate of asset usage
The straight-line method of depreciation Read More »
(a) Is widely used by manufacturing firms.
(b) Is often used by merchandising firms.
(c) Usually results in a larger amount of tax than under accrual basis accounting.
(d) Can not be used in filing income tax returns
The cash basis of accounting Read More »
(a) Cash is paid
(b) The purchase order is placed with the supplier
(c) Purchases are made
(d) None of these
Expense is recorded in the accounting records when Read More »
(a) An investment in marketable securities.
(b) Leasehold land.
(c) Loose tools.
(d) Copy rights.
Which of the following is an intangible asset? Read More »
(a) Closing entries are made before adjusting entries.
(b) Closing entries are made after the adjusting entries.
(c) Adjusting entries are made after financial statements are prepared.
(d) Financial statements are prepared after closing trial balance
In the accounting cycle Read More »
(a) To ensure arithmetical accuracy of accounting records.
(b) To establish complete accuracy of accounting records.
(c) To determine the amounts payable to suppliers for purchase of goods on credit.
(d) To ensure efficient use of resources of the business
Trial Balance is prepared: Read More »
(a) Statement of cash flows
(b) Income Statement
(c) Balance Sheet
(d) Statement of owner’s equity
(a) The journal shows in one place all the information about specific transactions arranged in chronological order.
(b) A ledger account shows in one place all the information about changes in a specific asset or liability or owner’s equity.
(c) Posting is the process of transferring information from ledger accounts to the journal.
(d) The product of the accounting cycle is the formal financial statements such as balance sheet and income statement.
Which of the following statements about accounting procedures is not correct? Read More »
(a) The owner withdrew Rs. 1,600 from the business for personal use
(b) Purchased a photocopying machine for Rs. 2,750 cash
(c) Purchased medical supplies for cash from Healthcare Labs. Rs. 1,630
(d) Received a telephone bill amounting to Rs. 550 to be paid within ten days
Which of the following transactions represent an expense? Read More »
a. An expense
b. An income
c. A liability
d. An asset
Rebate on bill discounted (unearned discount) is: Read More »
