Accounting Practice MCQs Competitive Exams Set 4

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16. Current Ratio is calculated as:

a. Fixed Assets/Current Liabilities

b. Current Liabilities/Current Assets

c. Current Assets/Current Liabilities

Answer. c.

17. Short-term loan can be described as:

a. If the period is three years

b. If the period is less than one year

c. If the period is over one year

Answer. b.

18. A partnership, in today՚s Pakistan, under the current law can have the following number of partners: a. 50

b. 20

c. 100

Answer. b.

19. Combination can be best described as:

a. Restructuring of Capital of a Company

b. Reduction of Capital of a Company

c. Amalgamation of two different types of businesses

Answer. c.

20. Sources of funds can be increased by:

a. Describing selling prices

b. Increasing expenditure

c. None of above

Answer. c.

(1) Books of original entry are called:

(a) Ledger

(b) Work sheets

(c) Journal

(d) None of these

Answer. (c)

(2) For preparing balance sheets prepaid expenses are shown as part of:

(a) Liability

(b) Equities

(c) Assets

(d) None of these

Answer. (c)

(3) Unpaid and unrecorded expenses are called:

(a) Prepaid expenses

(b) Accrued expenses

(c) Additional expenses

(d) None of these

Answer. (b)

(4) Amount, cash, or other assets removed from business by owner is:

(a) Capital

(b) Drawings

(c) Assets

(d) None of these

Answer. (b)

(5) Under the diminishing balance method, depreciation amount is:

(a) Payment

(b) Receipt

(c) Expenditure

(d) None of these

Answer. (c)