Accounting - Practice Test

[#1936] How does an over costing of purchase day book affect the cost of sales and profit?

(A) Cost of sales is decreased while profit is increased

(B) Cost of sales is increased while profit is decreased

(C) Both cost of sales and profit are increased

(D) Cost of sales is increased, gross profit is decreased, but net profit remains unaffected

Correct Answer

(B) Cost of sales is increased while profit is decreased

[#1937] Any profit on the sale of furniture of a cricket club will be taken to . . . . . . . .

(A) income and expenditure account

(B) cash account

(C) profit and loss account

(D) furniture account

Correct Answer

(A) income and expenditure account

[#1938] Stock is a consolidation of . . . . . . . . shares.

(A) partly paid

(B) fully paid

(C) equity

(D) sweat

Correct Answer

(B) fully paid

[#1939] Unclaimed dividend is shown in . . . . . . . .

(A) P/L account

(B) P/L appropriation account

(C) Balance sheet

(D) None of these

Correct Answer

(C) Balance sheet

[#1940] Which of the following financial reports shows the profitability of a business?

(A) Income statement

(B) Balance sheet

(C) Cash flow statement

(D) Statement of changes in equity

Correct Answer

(A) Income statement

Explanation

Solution: Income statement shows the profitability of a business. The income statement is the most important report for many analysts. It shows the company's operating results for an entire year.

Accounting - Study Mode

[#1936] How does an over costing of purchase day book affect the cost of sales and profit?

Correct Answer

[#1937] Any profit on the sale of furniture of a cricket club will be taken to . . . . . . . .

Correct Answer

[#1938] Stock is a consolidation of . . . . . . . . shares.

Correct Answer

[#1939] Unclaimed dividend is shown in . . . . . . . .

Correct Answer

[#1940] Which of the following financial reports shows the profitability of a business?

Correct Answer

Explanation