User Homework Solutions

Net profit is computed in which of the following 1.A fixed asset was bought for $5000. Its accumulated depreciation is $3000 and rate of depreciation is 20%. Calculate its depreciation expenses for the current accounting period using reducing balance method? A)$600 B)$2000 C)$300 D) $400 2.Financial statements are prepared mainly for A)Internal users of financial information B)External users of financial information C)Creditors of

Purchases + opening stock-closing stock= 1. Office equipment is a ________ asset for a computer manufacturer and the same office equipment is a _________ asset for a company that deals in these equipments A)Current, Fixed B)Fixed, intangible C)Tangible, intangible D)Fixed, current 2.Identify the external user of financial information or financial statements A)Management of the business B)CFO of the business C)Employees of the busine

When it is certain that a debt won’t be recovered, which of the following is correct 1.Which of the following is the effect on net income if a business decreases provision for doubtful debts? A)It will increase net income B)It will decrease net income C)No effect D)It will increase gross profit and net income 2.A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debts omission? A)Net p

Goods returned by customer should be debited to which of the following accounts 1.The other name of journal is A) Ledger B) T account C) Day book D) Cash book 2.Which of the following double entries is used to transfer “bad debts recovered” to income statement? A) Bad debts recovered Debit and income statement Credit B) Income statement Debit and bad debts recovered Credit C) Cash Debit and bad debts recovered Cre

Which of the following errors results in unadjusted cash book balance 1.Which of the following errors results in unadjusted cash book balance? A)Outstanding cheques B)Unpresented cheques C)Deposit in transit D)Omission of Bank charges 2. Bank charges amounting to $5000 was not entered in the cash book. Identify the correct adjustment in cash book A)Bank charges will be debited in cash book B)Bank charges will be added to cash book

Which of the following will affect the agreement of a trial balance 1.________ is the common base for preparing a trial balance A) Ledger accounts B) General Journal C) Specialized journals D) Balance sheet 2.Which of the following is true about a trial balance? A)It lists down the balances of accounts B)It lists down the balances of a balance sheet C)It is a kind of financial statement D)It is not a part of accounting cycle 3.

What is the minimum number of partners required to commence a partnership business 1.If debit balances = credit balances, trial balance only shows or check the ____________ and it does not indicate that no errors were made during recording and posting A)Arithmetic accuracy B)Errors of commission C)Omissions of economic events D)Understatements of balances 2. Which of the following account with normal balance is shown at the debit sid

Is it compulsory for all partners to contribute equal amount of capital in the business 1. In the general form of partnership, liabilities of partners are: A)limited B)unlimited C)limited to the business capital 2. Is partnership type of business considered as a separate legal entity? A)No B) Yes 3. Where there is no partnership agreement exists between partners, what will be the profit sharing ratio between the partners? A)Equal

what is the normal balance for an asset account 1.Another name for balance sheet is a) Statement of operations b) Statement of financial position c) Statement of capital balance 2. the balance sheet heading will specify a a) Period of time b) Point in time 3. which of the following is a category or element of balance sheet ? a) Expenses b) gain c) liabilities d) losses 4. which of the following is an asset account ? a) Acc

which of the following would not be a current asset 1. what is the normal balance for liability account? a) Debit b) Credit 2.what is the normal balance for stockholders’ equity and owner’s equity accounts? a) Debit b) Credit 3. client jay pays ABC co. $1,000 in December for ABC to perform services for jay in 45 days. ABC uses the accrual basis of accounting. In December ABC will debit cash for $1000. What will be the