What is a 'Balance Sheet' in Accounting .

A financial statement that shows a company's assets, liabilities, and equity at a specific point in time.

A document that tracks daily expenses

What is the difference between 'Gross Profit' and 'Net Profit'?

Gross profit is the revenue minus the cost of goods sold, while net profit is the revenue minus all expenses.

There is no difference between gross profit and net profit.

Net profit is the revenue minus the cost of goods sold, while gross profit is the revenue minus expenses.

Gross profit includes all expenses, while net profit only includes revenue.

If Goods are taken for own purposes by the Proprietor it should be

Debit Drawings Account, Credit Purchases Account

Debit Purchases Account: Credit Drawings Account

Debit Sales Account: Credit Stock Account

Debit Drawings Account: Credit Stock Account

What is the difference between 'Debit' and 'Credit' in Accounting?

Debits increase assets and expenses, while credits increase liabilities, revenues, and equity.

Debits increase liabilities, while credits increase assets and expenses.

Debits decrease equity, while credits decrease revenues.

Debits and credits have the same effect on financial accounts.

Which of the following is not a business transaction?

Paid son’s fees from her personal bank account Rs. 20,000

Paid son’s fees from the business Rs. 2,000

Bought furniture of Rs. 10,000 for business

Paid for salaries of employees Rs. 5,000

What is the formula for calculating Gross Profit?

Gross Profit = Revenue - Cost of Goods Sold

Gross Profit = Revenue + Cost of Goods Sold

Gross Profit = Revenue / Cost of Goods Sold

Gross Profit = Revenue * Cost of Goods Sold

Which of the following is correct?

Closing Stock shown in Trial Balance is recorded in Balance Sheet

Prepaid Expenses Account is Nominal Account

What does the abbreviation 'GAAP' stand for in accounting?

Generally Accepted Accounting Principles

General Accounting Assessment Procedures

What is the difference between Cash Accounting and Accrual Accounting?

Cash accounting records revenues and expenses when they are actually received or paid, while accrual accounting records revenues and expenses when they are earned or incurred, regardless of when the money is actually received or paid.

Cash accounting only records expenses, while accrual accounting only records revenues

Cash accounting records revenues when they are earned and expenses when they are incurred, while accrual accounting doesn't consider timing

Cash accounting and accrual accounting are the same in terms of recording transactions

What is the definition of a Liability in Accounting?

An obligation or debt that a company owes to outside parties

The physical assets owned by a company

The amount of money invested by shareholders in a business

The total revenue generated by a company

What does the term 'Accounts Receivable' refer to in Accounting?

Money owed to a company by its customers for goods or services provided on credit

Money that a company owes to its suppliers

The amount of cash on hand in a company's bank account

The total revenue generated by a company in a year

What is the difference between a Sole Proprietorship and a Corporation in terms of Ownership?

A sole proprietorship is owned and operated by one individual, while a corporation is owned by shareholders who elect a board of directors to manage the company.