Test: Financial Statements Of Sole - 1


10 Questions MCQ Test Crash Course of Accountancy - Class 11 | Test: Financial Statements Of Sole - 1


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Attempt Test: Financial Statements Of Sole - 1 | 10 questions in 10 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Crash Course of Accountancy - Class 11 for Commerce Exam | Download free PDF with solutions
QUESTION: 1

Q  To Know the profitability and financial position of a business we prepare at the end__

Solution:

Financial statements is the final stage in preparing final accounts. It is prepared to know profitability of the business and is prepared at the end so it is called as final accounts.

QUESTION: 2

_____ prepared to ascertain gross profit and net profit / loss during an accounting period.

Solution:

The Income Statement is one of a company’s core financial statements that shows their profit and loss over a period of time. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non-operating activities.

The income statement is one of three statements used in both corporate finance (including financial modeling) and accounting. The statement displays the company’s revenue, costs, gross profit, selling and administrative expenses, other expenses and income, taxes paid, and net profit, in a coherent and logical manner.

QUESTION: 3

Following are the Financial statement except

Solution:

Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes. Financial statements include:

  • Balance sheet
  • Income statement
  • Cash flow statement.
QUESTION: 4

The item discount received will appear on the

Solution:

Discount received will appear in profit & loss account statement credit side, discount received by the buyer when seller allow discount. Generally discount allowed by the supplier when transaction happened on credit basis, such as trade discount, early payment discounts and high volume purchase discounts.

QUESTION: 5

Computer of a firm should be classified as

Solution:

Fixed assets can include buildings, computer equipment, software, furniture, land, machinery, and vehicles. For example, if a company sells produce, the delivery trucks it owns and uses are fixed assets.

QUESTION: 6

Which is not an example of Capital expenditure

Solution:
QUESTION: 7

Revenue Expenditure means

Solution:
QUESTION: 8

________ the amount which is incurred in acquiring or improving the value of fixed assets.

Solution:

An expenditure which results in the acquisition of permanent asset which is intended to be permanently used in the business for the purpose of earning revenue is capital expenditure

It is the money spent by a business organization on acquiring or maintaining fixed assets such as land, building and equipment. 

QUESTION: 9

The expenditure whose amount is heavy and benefit of the likely to be derived over a number of years called______.

Solution:

In business, Deferred Revenue Expenditure is an expense which is incurred while accounting period. For example, revenue used for advertisement is deferred revenue expenditure because it will keep showing its benefits over the period of two to three years.

QUESTION: 10

Capital receipts are shown in _____

Solution:

► Capital receipts can be found in the balance sheet.

► Revenue receipts can be found in the income statement. 

► Capital receipts either reduce the assets of the company or create liability for the company.

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