MCQ 3 on Basic Accounting Concepts and Principles
Results
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#1. Identify the item of revenue from operations for a financial enterprise out of the following ?
For Financial enterprises, Interest earned is the key business operation and hence it becomes the revenue from operations.
#2. Which of the following is not a business Transactions ?
Cash withdrawn from personal bank account for personal use cannot be termed as business transaction as the same has no connection with business. This should not be recorded in the books of accounts.
#3. Identify from below the item of revenue from operations from a non-financial enterprise ?
For non-financial entity, Sales of goods/services is the key business operation, hence this becomes the item of revenue from operations.
#4. Purchase account should be debited against which transaction?
Purchase Account is debited for ‘Core activities’ purchase so that Gross Profit can be arrived at. Goods purchased for resale is the primary activity and hence appropriated to the calculation of Gross Profit.
#5. Which of the following transaction is not a financial character
Strike by employees is a physical event that cannot be recorded in financial accounting.
#6. The amount invested by a proprietor in business is termed as ?
Amount invested by owners are credited towards Capital in the books of accounts.
#7. Revenue from business operations refers to which important activity?
Revenue earned against main business operations are considered for Gross Profit Calculation. Such receipts are considered as Revenue receipts from business operations.
#8. Which of the following is not a Long-Term Liability
Creditors are short term liability as this liability is normally settled within 12 months. Long term loan are taken for more than 12 months.
#9. Which of the following is not a fixed asset?
Fixed Asset is something that is kept in business for more than a year to increase the profitability.
#10. Bank overdraft is a ?
Short Term liability is a liability that becomes due within an year and hence appropriate liquidity must be maintained by business entity.