1. In which of the following form of Pay Statement, the total of all expenses is taken from the total of all revenues?
(a) Multiple-step form
(b) Account form
(c) Report form
(d) Single-step form
Single-step form
2. Which of the following would affect the gross profit rate if sales remain continuous?
(a) An increase in advertising expense
(b) A decrease in depreciation expense
(c) An increase in cost of goods sold
(d) A decrease in insurance expense
An increase in cost of goods sold
3. What are the effects of a correcting entry on the financial statements?
(a) Match revenues and expenditures
(b) Increase net income
(c) Increase the accuracy of balance sheet and income statement
(d) Match revenues and assets
Increase the accuracy of balance sheet and income statement
4. Which of the following is TRUE?
(a) The income statement reports only revenue for which cash was received at the point of sale
(b) The income statement reports the financial position of a business at a particular point in time
(c) The income statement is sometimes called the statement of operations
(d) The income statement reports revenues, liabilities expenses and
The income statement is sometimes called the statement of operations
5. A firm paid Rs. 800,000 in dividends’ over the last period. The beginning and ending retained earnings account balances were Rs. 10,100,000 Rs. 12,500,000 respectively. a 40% average tax rate, what was De firm’s net income (net profit after taxes)? Assuming
(a) Rs.5,333.33
(b) Rs.3,209,000
(c) Rs.2,400,000
(d) Rs.1,600,000
Rs.2,400,000
6 Which factor would NOT affect the gross profit rate?
(a) An increase in the cost of heating the store
(b) An increase in the price of inventory items
(c) An increase in the sale of luxury items
(d) An increase in the use of “discount pricing” to merchandise sell
An increase in the cost of heating the store
7. Closing entries after calculation transferred to which of the following account?
(a) Revenue account
(b) Common Stock account
(c) Dividends account
(d) Owner’s Capital account
Owner’s Capital account
8. 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
Income Statement
9. Which of the following is NOT true about the net income?
(a) It is a calculated figure and represents actual cash
(b) It can be distributed among holders of common stock as a divided
(c) It can be held by the firm as retained earnings
(d) It is obtained by subtracting expenses from the revenues
It can be held by the firm as retained earnings
10. The expenses which are NOT salaried out of Gross Profit classified as:
(a) Direct Expenses
(b) General Expenses
(c) Financial Expenses
(d) Selling Expenses
Direct Expenses
11. The Trading and Profit and Loss account is also called:
(a) Balance Sheet
(b) Cash Flow Statement
(c) Income Statement
(d) Trial Balance
Balance Sheet
12. The Trading and Profit and Loss account is also called:
(a) Balance Sheet
(b) Cash Flow Statement
(c) Income Statement
(d) Trial Balance
Income Statement
13. Which of the following expenses would normally be classified as non-operating expenses on a multiple-step income statement?
(a) Interest expense
(b) Depreciation expense
(c) Insurance’ expense
(d) Salaries expense
Depreciation expense
14. All of the following accounts would be closed in Income Summery Account EXCEPT:
(a) Commission earned account
(b) Prepaid insurance
(c) Salaries Expense account
(d) Wages account
Wages account
15. At the end of a period which of the following account would not be closed to the income summary account?
(a) Rent expense
(b) Revenue earned
(c) Wages expense
(d) Accumulated depreciation
Rent expense
16. Which of the following financial reports shows the profitable of a business?
(a) Income statement
(b) Balance sheet
(c) Cash flow statement
(d) Statement of changes in equity
Income statement
17. The expenses related to the main operations of business are referred as
(a) Administration expense
(b) Non-administration expense
(c) Selling expenses
(d) Operating, expenses
Operating, expenses
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