Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. The expenses relating to personal use should be treated as drawings rather than as business expenses. This is in accordance with A. Matching concept.

image text in transcribedimage text in transcribed

1. The expenses relating to personal use should be treated as drawings rather than as business expenses. This is in accordance with A. Matching concept. B. Prudence concept. C. Separate entity concept. D. Substance over form concept. 2. On 1 January 2019, Snow Corporation purchased a land for $200,000 . In 2021, the current market value of the land is $450,000. However, the business continue to report the land at $200,000. This is justified under which of the following concept? A. Time interval. B. Matching concept. C. Money measurement. D. Historical cost concept. 3. An investment by the owner of a business entity in a building, at a cost of $100,000 with a $40,000 outstanding loan, would A. Increase owner's equity $100,000. B. Increase total assets $140,000. C. Decrease liabilities $40,000. D. Increase owner's equity $60,000. 4. What is net profit? A. Purchases + Sales. B. Gross profit + other income - Expenses. C. Sales - Cost of goods sold. D. Excess of cost of sales over sales. 5. To find the value of closing inventory at the end of a period we: A. Do this by physically counting the inventory (i.e. stocktaking). B. Look in the inventory account. C. Deduct opening inventory from cost of goods sold. D. Deduct cost of goods sold from sales. 6. Which of these best describes non-current assets? A. Items bought to be used in the business. B. Items which will not wear out quickly. C. Expensive items bought for the business. D. Items having a long life and not bought specifically for resale. 7. When the financial statement are prepared, the Bad Debts Account is closed by a transfer to the : A. Statement of financial position. B. Profit and Loss Account. C. Trading Account. D. Allowance for Doubtful Debts Account. 8. An Allowance for Doubtful Debts is created: A. Debtors become bankrupt. B. When debtors cease to be in business. C. To provide for possible bad debts. D. To write-off bad debts. 9. Identify the appropriate qualitative characteristics being described in the statements below. Information that is capable of making a difference in a decision is said to have this fundamental quality. A. Faithful representation B. Comparability C. Materiality D. Relevance 10. The historical cost principle provides that: A. Assets and equities be expressed in terms of a common denominator. B. The recorded amount of an acquired item should be the fair market value of the item. C. The expenses of generating revenue should be recognized in the same period that the related revenue is recognized. D. Items whose costs are insignificant compared to other amounts on the financial statements may be accounted for in the most expedient manner. 11. The expenses relating to personal use should be treated as drawings rather than as business expenses. This is in accordance with A. Matching concept. B. Prudence concept. C. Separate entity concept. D. Substance over form concept

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

AML Auditing Understanding Foreign Exchange What Every AML KYC Auditor Should Know

Authors: Bob Walsh

1st Edition

1539576248, 978-1539576242

More Books

Students also viewed these Accounting questions