1.

On balance sheet, accruals, notes payables, and account payable are listed under
which category?
A) Current Liabilities
B) Accumulated Liabilities
C) Noncurrent Liabilities
D) Accrued Liabilities
ANSWER: A
2. Inventories, cash and equivalents, and accounts receivables are listed as
A) Earnings on Income Statement
B) Payments on Income Statement
C) Assets on the Balance Sheet
D) Liabilities on the Balance Sheet
ANSWER: C
3. Salaries and wages employees are recorded in which accounts are called
A) Accruals Accounts
B) Accrued Expenses
C) Zero Liabilities
D) Both A and B
ANSWER: D
4. In the situation of bankruptcy, a stock which is recorded above common stock and
below debt account is
A) Preferred Stock
B) Debt Liabilities
C) Common Liabilities
D) Hybrid Stock
ANSWER: A
5. A firm buys products but does not pay to suppliers instantly. This is recorded
as
A) Account Receivable
B) Account Payable
C) Accumulated Liabilities
D) Current Liabilities
ANSWER: B
6. In a balance sheet, the total of common stock and retained earnings are examined
as
A) Common Equity
B) Due Equity
C) Preferred Equity
D) Common Perpetuity
ANSWER: A
7. In the Income statement, the process of recording inventory that gives a lower
cost of a commodity sold is categorized as
A) First Out Receivable
B) Last in First Out
C) Last Out Receivable
D) First in First Out
ANSWER: B
8. Financial securities which can be changed into cash to their book value price
are categorized as
A) Short-term Investments
B) Inventories
C) Long-term Investments
D) Cash Equivalents
ANSWER: D
9. Earnings that have a cumulative amount and are not paid to the stockholder as a
dividend is known as
A) Common Earnings
B) Preferred Earnings
C) Non-paid Earnings
D) Retained Earnings
ANSWER: D
10. Information that is used by investors for forecasting future earnings is
documented in
A) Annual Report
B) Five Years Report
C) Exchange Report
D) Stock Report
ANSWER: A
Question 1
If there is an increase in interest rates than the fixed interest rate of the
corporate bond will
A) Return to the corporation
B) Decrease in value
C) Remain unchanged
D) Increase in value
ANSWER B
Question 2
Which one of the following is shown first when the assets are arranged in the order
of their liquidity?
A) Investment
B) Cash in hand
C) Debtors
D) None of the above
ANSWER B
Question 3
An investor invests in assets known as a
A) Securities
B) Block of Assets
C) Portfolio
D) None of the above
ANSWER C
Question 4
Over the period, investors determine the compound growth rate of an investment by
A) Arithmetic median
B) Arithmetic mean
C) Calculus mean
D) Geometric mean
ANSWER D
Question 5
Investors agree to invest in high- risk investments if only
A) There are any true speculations
B) The predicted return is satisfactory for taking a risk
C) There are no safe options except for holding cash
D) The return is short
ANSWER B
Question 6
In Capital Market Line every investment is
A) Finitely divisible
B) Infinitely divisible
C) Both a & b
D) None of the above
ANSWER B
Question 7
Investments would score high only if there is a protection to
A) Real estate
B) Preferred stock
C) Government bonds
D) Common stock
ANSWER C
1. Trial balance is used to check the accuracy of
A) Balance sheet balances
B) Ledger accounts balances
C) Cash flow statement balances
D) Income statement balances
ANSWER: B
2. In the books of account if a transaction is completely deleted, will it affect
the trial balance?
A) No
B) Yes
C) A transaction cannot be omitted
ANSWER: A
3. What is used in preparing trial balance?
A) Specialized Journals
B) Balance Sheet
C) Ledger Accounts
D) General Journal
ANSWER: C
4. What is the trial balance used?
A) It is a financial statement
B) It records balances of a balance sheet
C) It doesn�t contribute to the accounting cycle
D) It records balances of accounts
ANSWER: D
5. When debit balance is equal to credit balance then the trial balance means
A) Account balances are correct
B) Mathematically Capital+Liabilities=Assets
C) No mistake in recording transactions
D) No mistake in posting entries to ledger accounts
ANSWER: B
6. When is trial balance prepared?
A) At the end of an accounting period
B) At the end of a year
C) Frequently during the year
D) At the end of a month
ANSWER: A
7. Which items influence the trial balance agreement?
A) Deposit in transit
B) Compensating errors
C) Complete omission of a transaction
D) Partial omission of a transaction
ANSWER: D
8. When credit balances = debit balances, the trial balance check and shows
____________ . It also indicates that there were no errors made during posting and
recording and posting.
A) Understatements of Balances
B) Errors of Commission
C) Arithmetic Accuracy
D) Omissions of Economic Events
ANSWER: C
9. Which of the following account with normal balance is shown at the debit side of
a trial balance?
A) Creditors account
B) Unearned income account
C) Rent income account
D) Cash account
ANSWER: D
10. In trial balance, which accounts with normal balance is recorded at the credit
side?
A) Bank account
B) Equipment account
C) Cash account
D) Accrued expenses account
ANSWER: D