Business Accounts MCQ Flashcards
Which of the following accounts is a liability in the books of a sole trader’s business?
A. Bank overdraft
B. Insurance
C. Drawings
D. Cash at bank
E. Bank interest charges
A. Bank overdraft
Which of the following is a tangible fixed asset of a printing business?
A. Petty cash
B. Trade debtors
C. Cash at bank
D. A patent
E. Printing machinery
E. Printing machinery
Which one of the following statements about business accounting is correct?
A. The profits of a business which have been retained in a sole trader’s business over the years are an asset account.
B. An expense account does not include spending on long-term assets.
C. Every business must match its accounting period to the tax year.
D. To be defined as a fixed asset the asset must be owned for over a month.
E. Capital is the money generated by the business.
B. An expense account does not include spending on long-term assets.
Which of the following is the label for the final figure (at the end) of a profit and loss account?
A. Total income
B. Gross profit
C. Total expenses
D. Net profit
E. Cost of sales
D. Net profit
Which one of the following statements is correct?
A. A profit and loss account is prepared exclusively by using the income and expenses accounts of the business.
B. Lighting and heating expenses for a business premises would not feature on a profit and loss account.
C. All income entries from the trial balance are put at the top of the profit and loss account.
D. A profit and loss account relates to the tax year of a business, which is recorded in the heading for the account.
E. Accountants usually prepare the profit and loss account directly from the book-keeping ledgers of the business.
C. All income entries from the trial balance are put at the top of the profit and loss account.
Which one of the following statements is correct?
A. In order to calculate the ‘net profit’ figure on a profit and loss account, the accountants of the business will carry out the following formula: Sales – cost of sales = net profit
B. In order to calculate the ‘cost of sales’ figure on a profit and loss account, the accountants of the business will carry out the following formula: Opening stock + purchases – closing stock = cost of sales.
C. The ‘net profit’ figure on a profit and loss account will not appear on the balance sheet of the business.
D. The premises and equipment owned by a business would be shown in the expenses section of a profit and loss account.
E. In order to calculate the ‘cost of sales’ figure on a profit and loss account, the accountants of the business will carry out the following formula: Opening stock – purchases – closing stock = cost of sales.
B. In order to calculate the ‘cost of sales’ figure on a profit and loss account, the accountants of the business will carry out the following formula: Opening stock + purchases – closing stock = cost of sales.
