Fin805/General Revision for chapter 2

Assets which are easily convertible into cash within a year is called :

• Current Assets

• Long term assets

• Plant Assets

• Current Assets

Accrued Expense is considered as:

• Asset

• Revenue

• Expense

• Liability

The process of allocating the cost of a plant asset to expense in the accounting periods benefiting from its years is called:

• consumption

• Depreciation

• Amortization

• Utilization

On January 1, 2020 Ahmed company acquired a truck at a cost of BD 24000.The truck expected to have a salvage value of BD 2000 and a useful life of 4 years. Then, the accumulated depreciation for the second year using the straight line method is :

• BD 4000

• BD 5500

• BD 6000

• BD 11000

Land is classified as :

• Liquid asset

• Short term asset

• Long term asset

• Soft asset

Depreciation should be recorded in :

• Income statement

• Owners Equity Statement

• Balance sheet

• Cash flow Statement

Which of the following has a credit balance?

• Machine

• Prepaid expense

• Unearned Revenue

• withdrawals

Which of the following has a debit balance?

• Unearned Revenue

• Prepaid expense

• Account payable

• Consulting Revenue

The contra account for account receivable is :

• Accumulated depreciation

• Allowance for doubtful account

• Unearned Revenue

• Cash

What is true about trial balance ?

• It is a financial statement

• A list of opening balances of ledger accounts

• The two sides ( debit and credit ) should be equal

• It is the last step in the preparation of financial statement