Choose the most appropriate answer.
1. Which one of the following is a temporary account?
a. Cash
b. Accounts Receivables
c. Insurance Expense
d. Accounts payable
2. The term used for the difference between fair value of a company and the purchase
price is:
a. Trade Mark
b. Market Value
c. Good Will
d. Purchase Price
3. Financial statement (s) that has all temporary accounts is:
a. Balance Sheet
b. Income Statement
c. Cash Flow Statement
d. Statement of Owner’s Equity
4. The accounting cycle runs in the sequence
a. Analyze, journalize, post, adjust, and prepare statements, close
b. Post, journalize, analyze, prepare statements, close, adjust
c. Prepare statements, journalize, post, adjust, close, analyze
d. Journalize, post, close, prepare statements, adjust, analyze
5. After all the closing entries have been posted, what will be the balance of the income
summary account?
a. A debit if a net income has occurred
b. A debit if a net loss has occurred
c. A credit if a net loss has occurred
d. Zero
6. Which one is TRUE about Post-Closing trial balance?
a. Be prepared before closing entries are posted to the ledger
b. Contain both income statement and balance sheet accounts
c. Contain only balance sheet accounts
d. Contain only income statement accounts
7. Revenue from services is classified as:
a. Investing Inflow
b. Operating Inflow
c. Investing Outflow
d. Operating Outflow
8. If the cost of a building is Rs. 90, 000 and its estimated useful life is 30 years. The
depreciation expense for one month is:
a. Rs. 600
b. Rs. 250
c. Rs. 300
d. Rs. 500
9. The supplies on hand account have a balance of Rs. 1500 at year end. The actual
amount of supplies on hand at the end of period is Rs. 400. The necessary adjusting entry
is:
a. Dr. Supplies on Hand
Rs. 1100
Cr. Supplies Expense
b. Dr. Supplies Expense
Rs. 400
Cr. Supplies on Hand
c. Dr. Supplies Expense
Cr. Supplies on Hand
d. Dr. Supplies on Hand
Cr. Supplies Expense
Rs. 1100
Rs. 400
Rs. 1100
Rs. 1100
Rs. 400
Rs. 400
10. If a company has
Revenue Rs. = 45,000,
Expenses were Rs. = 37,500,
Owner’s withdrawals = Rs. 10,000.
Calculate the amount of net income or net loss of the company.
a. Profit of $ 15, 00
b. Loss of $ 25, 00
c. Profit of $ 25, 00
d. Loss of $25,000
