1. User of financial statement is:
a) Management
b) Creditors
c) Bankers
d) All of the above
2. Inventory accounts should be classified in which section of a balance sheet?
a) Current assets
b) Investments
c) Property, plant, and equipment
d) Intangible assets
3. The Cash account on the balance sheet should not include which of the following items?
a) Travel advances to employees
b) Currency
c) Money orders
d) Deposits in transit
4. In accounting all business transaction are recorded as having
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
5. Which of the following equations properly represents a derivation of the fundamental accounting
equation?
Assets + liabilities = Owner Equity
Asset = OwnerEquity
Cash = Assets
Assets – Liabilities = Owner Equity
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
6. Which of the following would not be included on a balance sheet?
a) Accounts payable
b) Accounts receivable
c) Sales
d) Cash
7. Contingent liabilities should be recorded in the accounts when:
a) It is probable that the future event will occur.
b) The amount of the liability can be reasonably estimated.
c) Both (a) and (b).
d) Either (a) or (b).
8. The cost concept records the figures at
a) Market values
b) Actual amount paid
c) Actual amount or market values whichever is less.
d) MRP maximum retail price
9. Financial statements are:
a) Estimates of facets
b) Anticipated facts
c) Recorded facts
d) none
10. The term Management Accounting was first used in
a) 1910
b) 1939
c) 1950
d) 1960