Introduction to Accounting Page-2

11) The accounts in which the credit sale of merchandise or services are placed is known as
(A) Notes Receivable
(B) Accounts Receivable
(C) Amount Receivable
(D) Discount Receivable

12) The goods which are purchased for the purpose of resale are called
(A) Purchases
(B) Merchandise
(C) Goods/Inventory
(D) All of the above

13) The main function of Accounting is to
(A) Record economic data
(B) Provide informational basis for action
(C) Classify and record business transactions
(D) All of the above

14) Management accounting provides valuable services to management in performing
(A) All management functions
(B) Controlling functions
(C) Coordinating management functions
(D) None of these

15) The owner of the business is called
(A) Proprietorship
(B) Ownership
(C) Industrialist
(D) Proprietor


16) Promise to pay a certain amount is called
(A) Account Payable
(B) Notes Payable
(C) Amount Payable
(D) Discount Payable

17) Cash invested by the owner is called
(A) Asset
(B) Liabilities
(C) Capital
(D) Loan

18) Cash or goods taken away by the proprietor is called
(A) Drawings
(B) Sales
(C) Charity
(D) Expense

19) The rights and claims of outsiders/ owner against the asset is called
(A) Owner’s Equity
(B) Liabilities
(C) Equities
(D) None of these

20) The things of value possessed by the trader is called
(A) Merchandise
(B) Assets
(C) Stock
(D) Purchases



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