Accounting for Business Decisions | Chapter 2 | Part 1 | MBA MCQs | ABD

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1. ______________ shows the firm’s assets, liabilities, and stockholders’ equity as of the report date.
   1.   Cash Flow
   2.   Funds Flow
   3.   Income Statement
   4.   Balance Sheet
2. ______________ shows the results of the firm’s operations and financial activities for the reporting period.
   1.   Trading and Profit & Loss Account
   2.   Expense Statement
   3.   Income Statement
   4.   Balance Sheet
3. ______________ includes explanations of various activities, additional details of some accounts, and other items as mandated by the regulatory authorities, bodies from time to time.
   1.   Trading and Profit & Loss Account
   2.   Expense Statement
   3.   Income Statement
   4.   Supplementary Note
4. ______________ is a formal official record of the financial activities and position of a business, person, or other entity.
   1.   Financial Statement
   2.   Trading Account
   3.   Profit & Loss Account
   4.   Supplementary Note
5. ______________ provides the vital information related to the profitability, liquidity and solvency of the business
   1.   Financial Statement
   2.   Trading Account
   3.   Profit & Loss Account
   4.   Cash Flow & Funds Flow
6. ______________ is the simplest business form under which one can operate a business.
   1.   Partnership Firm
   2.   Sole Trading Firm
   3.   Private Ltd. Company
   4.   Public Company
7. ______________ is not a separate legal entity.
   1.   Partnership Firm
   2.   Sole Proprietorship Firm
   3.   Private Ltd. Company
   4.   One Man Company
8. For every item given in Trial Balance, ______________ effect should be given.
   1.   Dual
   2.   Single
   3.   Triple
   4.   None of the above
9. For every item given in Adjustment, ______________ effect should be given.
   1.   Dual
   2.   Single
   3.   None of the above
   4.   Triple
10. ______________ are nothing but the entries which are not included in the original Trial Balance.
    1.   Journal Proper
    2.   Ledger
    3.   Adjustments
    4.   None of the above
11. Payment received from debtor:
    
    1.   Decreases the total assets
    2.   Increases the total assets
    3.   Results in no change in total assets
    4.   Increase the total liabilities
12. Payment of salary is recorded by:
    1.   Debiting salary a/c; crediting cash a/c
    2.   Debiting cash a/c; crediting salary a/c
    3.   Debiting employee a/c ; crediting cash a/c
    4.   Debiting employee a/c ; crediting salary a/c
13. Cost of asset should always be equal to the cost of the liabilities. This concept is
    1.   Double Entry Bookkeeping
    2.   Matching Concept
    3.   Consistency
    4.   Money measurement Concept
14. Which of the following is not a fixed asset?
    1.   Building
    2.   Bank Balance
    3.   Plant Patents
    4.   Goodwill
15. The basic concepts related to p& l a/c are:
    1.   Realization Concept
    2.   Matching Concept
    3.   Cost Concept
    4.   Both a and b above
16. P& l a/c is prepared for a period of one year by following:
    1.   Consistency concept
    2.   Conservatism concept
    3.   Accounting period concept
    4.   Cost Concept
17. Insurance prepaid is shown as:
    1.   Current assets
    2.   Current liabilities
    3.   Fixed asset
    4.   Fixed liability
18. Outstanding salary is shown as:
    1.   An asset in the balance sheet
    2.   By adjusting it in the P & L a/c
    3.   A liability
    4.   Both b and c above
19. Reserve for doubtful debts appearing in the trial balance should be:
    1.   credited to P & L a/c
    2.   Both a and c
    3.   Reduced from related asset in the balance sheet
    4.   Shown as liability side in balance sheet
20. All those to whom business owes money are:
    1.   Debtors
    2.   Creditors
    3.   Shareholders
    4.   Investors