Accounting Multiple Choice Questions and Answers for Practice

16. Which account is not a liability account?

1. Accounts payable
2. Accrued expenses
3. Cash
4. Notes payable

17. Which of the following is not a liability?

1. Accrued Accountancy Fees
2. Hire Purchase Creditor
3. Bank Overdraft
4. Depreciation on Motor Vehicle

18. Which of the following is not a credit balance?

1. Accumulated Depreciation of Fixtures and Fittings
2. Sales Income
3. Interest Paid
4. Interest Received

19. Sales expenditure budget is prepared by estimating the expense(s) of

1. Advertisement
2. Market analysis
3. Salesmans salary
4. All of the above

20. Which of these is not included as a separate item in the basic accounting equation?

1. Assets
2. Liabilities
3. Revenues
4. Stockholders equity

21. Balance sheet is a statement of

1. Assets
2. Liability
3. Capital
4. All of the above

22. Which of the following balance sheet equations is wrong?

1. Assets + Liabilities = Capital
2. Assets - Liabilities = Capital
3. Assets - Capital = Liabilities
4. Liabilities + Capital = Assets

23. Which of the following source books will not be required in a cash business?

1. Bank Account
2. Petty Cash Account
3. Sales Ledger
4. Nominal Ledger

24. A higher inventory ratio indicates

1. Better inventory management
2. Quicker turnover
3. Both A and B
4. None of the above

25. The following is (are) the current liability (ies)

1. Bills payable
2. Outstanding expenses
3. Bank overdraft
4. All of the above

26. Accounting provides information on

1. Cost and income for managers
2. Companys tax liability for a particular year
3. Financial conditions of an institution
4. All of the above

27. Which of the following would not be found on a standardized income statement?

1. Cost of Sales
2. Amounts written off Investments
3. Tax on Income on Ordinary Activities
4. Provisions for Liabilities and Charges

28. The long term assets that have no physical existence but are rights that have value is known as

1. Current assets
2. Fixed assets
3. Intangible assets
4. Investments

29. The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as

1. Current assets
2. Fixed assets
3. Intangible assets
4. Investments

30. Patents, Copyrights and Trademarks are

1. Current assets
2. Fixed assets
3. Intangible assets
4. Investments