Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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The
"stewards" of a limited company are: a. | The shareholders | c. | The managers | b. | The
employees | d. | The
customers | | | | |
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2.
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The
financial position of a business can be measured by: a. | Comparing its
assets with its revenues | c. | Comparing its
revenue with its expenses | b. | Comparing its assets with its
expenses | d. | Comparing its
assets with its liabilities | | | | |
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3.
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The
amounts owed to a business by its customers are referred to as "debtors". In a business
balance sheet, debtors are classified as: a. | Fixed assets | c. | Current liabilities | b. | Current
assets | d. | Long-term
liabilities | | | | |
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4.
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The
two components of the accounting quadrant which provide a picture of the profit (or loss) of a
business are: a. | Assets and
expenses | c. | Assets and
liabilities | b. | Expenses and revenue | d. | Liabilities and revenue | | | | |
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5.
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The
revenue of a business for an accounting period consists of: a. | The amount of
money received from customers during the period | b. | The amount of
money that customers owe to the business at the end of the period | c. | The value of the
goods or services sold to customers during the period | d. | The profit made
by the business during the period | | |
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6.
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The
owner of a business puts £10,000 of his/her own money into the business. The effect of this
transaction on the accounting quadrant is: a. | Assets and liabilities both increase by
£10,000 | b. | Assets and liabilities both decrease by
£10,000 | c. | Assets increase by £10,000 and liabilities decrease by
£10,000 | d. | Assets decrease by £10,000 and liabilities increase by
£10,000 | | |
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7.
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A
business sells for £5,000 goods which had cost £3,000. The customer immediately pays for
the goods in cash. The effect of this transaction on the accounting quadrant is: a. | Stocks decrease
by £3,000, expenses decrease by £3,000, cash increases by £5,000 and revenue increases
by £5,000 | b. | Stocks increase by £3,000, expenses increase by
£3,000, cash increases by £5,000 and revenue increases by
£5,000 | c. | Stocks decrease by £3,000, expenses increase by
£3,000, cash increases by £5,000 and revenue increases by
£5,000 | d. | Stocks decrease by £3,000, expenses increase by
£3,000, cash increases by £5,000 and revenue decreases by
£5,000 | | |
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8.
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The
profit made by a company represents: a. | An excess of revenues over expenses | b. | An excess of
assets over liabilities | c. | An increase in the spare cash possessed by the
company | d. | The amount paid out to shareholders at the end of the
period | | |
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9.
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The
gross profit of a company for an accounting period is equal to: a. | The profit
remaining after deducting all expenses | b. | The profit available for distribution to the company's
shareholders | c. | The profit remaining after tax has been
deducted | d. | Sales revenue less the cost of goods
sold | | |
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10.
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Which
of the following is a list of fixed assets (and only fixed assets)? a. | Equipment,
stocks, debtors | c. | Buildings,
equipment, cash | b. | Equipment, motor vehicles,
creditors | d. | Buildings,
equipment. motor vehicles | | | | |
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