Question 1

The Statement of Financial Position provides information regarding the following, except

Accepted Answer

Income

Answer

Liquidity

Answer

Solvency

Answer

financial structure

Question 2

What is the excess of assets after deducting liabilities?

Accepted Answer

Owner's Equity

Answer

Retained earnings

Answer

Income

Answer

Profit

Question 3

What is the difference between Net Sales and Cost of Sales (Net Sales - Cost of Sales = ?)?

Accepted Answer

Gross profit

Answer

Net Income

Answer

Gross income

Answer

Net Profit

Question 4

What is gross profit minus expenses (selling, administrative and other expenses)?

Accepted Answer

Net income

Answer

Net profit

Answer

Net income after tax

Answer

Gross profit

Question 5

What is the classification of prepaid expenses?

Accepted Answer

Current asset

Answer

Expense

Answer

Non-current asset

Answer

Cost

Question 6

What is the classification of income tax payable?

Accepted Answer

Current liability

Answer

Expense

Answer

Non-current liability

Answer

Current asset

Question 7

In which part of the Income Statement will you find the item, Freight in?

Accepted Answer

Cost of Sales

Answer

Answer not given

Answer

Sales

Answer

Selling, administrative and other expenses

Question 8

In which part of the Income Statement will you find the item, Freight out?

Accepted Answer

Selling, administrative and other expenses

Answer

Cost of sales

Answer

Answer not given

Answer

Sales

Question 9

Which of the following does not affect cash?

Accepted Answer

Depreciation of fixed assets

Answer

Collection of receivables

Answer

Payment of payables

Answer

Cash sales

Question 10

What is the effect of withdrawal by owner of cash for personal use?

Accepted Answer

Decrease in owner's equity

Answer

Answer not given

Answer

No effect

Answer

Increase in owner's equity

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