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The perpetual inventory method has the advantage over the periodic system in that:
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Cost of goods sold = Opening stock + Net purchases + Expenses on Purchases – Sales. Which
part of formula is wrong ?
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a. Opening stock.
b. Net purchases.
c. Expense on Purchases.
d. Sales.
Sales are equal to:
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The product cost includes
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a. Direct material cost, direct labour cost, overhead cost, selling expenses, administration expenses
b. Direct material cost, direct labour cost, overhead cost, selling expenses
c. Direct material cost, direct labour cost, overhead cost
d. Direct material cost, direct labour cost, overhead cost, administration expenses
Assume that you are examining financial statement(s) which are headed ‘For the year ended 31
December 20xx’. The heading indicates the statement(s) is/are the:
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a. Income statement
b. Balance sheet and income statement
c. Balance sheet
d. None of the above
Which financial statement represents the accounting equation
ASSESTS = LIABILITIES + OWNER’S EQUITY
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a. Income Statement
b. Cash Flow Statement
c. Balance Sheet
d. Fund Flow Statement
Net Sales minus the Cost of Goods Sold equals
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a. Net Income
b. Income From Operations
c. Other Income
d. Gross Profit
A set of accounts is called a:
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a. Trial balance
b. Spreadsheet
c. Balance sheet
d. General ledger
Which of the following is not an asset?
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a. Cash
b. Accounts receivable
c. Equipment
d. Owner’s capital
The formula of ROA is
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The Combination of Selling Expenses and Administrative Expenses is referred to as
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a. Operating Expenses
b. General Expenses
c. Total Expenses
d. Other Expenses
The inventory costing method selected by a company can affect:
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Assets are recorded at their original purchase price according to the:
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A list of the accounts is called
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a. Ledger
b. Chart of accounts
c. T -Account
d. Debit
Which of the following is not considered to be a liability ?
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a. Wages Payable
b. Accounts Receivable
c. Unearned Revenues
d. Accounts Payable
Which of the following statement is not true about liabilities ?
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a. Share Capital
b. Borrowings and Finance Lease Liabilities
c. Accounts Payable
d. Wages Payable
Which financial statement would you analyze to assess a firm’s operating performance for the
past year ?
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a. Balance Sheet
b. Statement of Retained Earnings
c. Income Statement
d. Statement of public Accounting
The combination of Selling Expenses and Administrative Expenses is referred to as:
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a. Other Expenses
b. General Expenses
c. Total Expenses
d. Operating Expenses
Owner’s Equity stands for
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a. An overstatement
b. The effect would be noted in the next period
c. No effect
d. An understatement
Which of the following are not expenses?
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a. Dividends paid
b. Interest on a loan
c. Wages earned but yet to be paid
d. Cost of goods sold
What accounting assumption underlies the following procedure: Land purchased for $2m four
years ago with a present market value of $3m is recorded in the balance sheet at $2m?
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a. Accounting period
b. Monetary
c. Accrual base
d. Historical cost
Which of the following items would decrease profit for the year ?
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a. Increases assets.
b. Results in no change in the total
c. Decreases assets
d. Increases liability