Accounting Multiple Choice Questions and Answers

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