Accounting Quiz

What is the fundamental accounting equation?

• Assets = Liabilities + Revenue

• Assets = Liabilities + Expenses

• Assets = Liabilities + Capital

• Assets = Income + Expenditure

• None of the above

Which type of account is affected by 'Debit the receiver, credit the giver'?

• Real Account

• Nominal Account

• Personal Account

• Capital Account

• Asset Account

What does a Petty Cash Book maintain?

• All major business transactions

• Cash transactions above a certain limit

• All small payments and repetitive transactions

• Transactions involving large assets

• Daily big transaction

Which method of depreciation calculates it based on machine usage?

• Straight-line method

• Diminishing balance method

• Machine hour rate method

• Annuity method

• Sinking fund method

What is a Bill of Exchange primarily used for?

• Recording expenses

• Guaranteeing payment in trade

• Issuing stock dividends

• Calculating taxes

• None of the above

Which of the following is a feature of the triple column cash book?

• Contains only cash transactions

• Includes columns for cash, bank, and discount

• Records only bank-related transactions

• Includes only receipts

• Tracks stock and inventory

What is goodwill classified as in accounting?

• Tangible Asset

• Intangible Asset

• Current Asset

• Fixed Liability

• Revenue

Which accounting principle requires recording revenue when earned, not when received?

• Matching Principle

• Accrual Principle

• Consistency Principle

• Conservatism Principle

• Cost Principle

What is the primary purpose of a trial balance?

• To prepare the balance sheet

• To verify the arithmetical accuracy of ledger postings

• To finalize financial statements

• To calculate profit and loss

• To track income and expenditure

What does the term 'debit' signify in accounting?

• An increase in liability

• A decrease in asset

• An increase in asset or expense

• An increase in revenue

• A decrease in capital