Accounting - Study Mode

[#2551] Bonus shares mean shares issued to:
Correct Answer

(B) Existing equity shareholders

[#2552] Which one of the following is INCORRECT about closing stock?
Correct Answer

(D) It reduces the resources of business

Explanation

Solution: Closing stock does not reduce the resources of business. Closing stock is the amount of inventory that a business still has on hand at the end of a reporting period.

[#2553] Outsider's claim against the assets of the business is called
Correct Answer

(A) Liability

Explanation

Solution: Outsider's claim against the assets of the business is called Liability. Liabilities are defined as a company's legal financial debts or obligations that arise during the course of business operations.

[#2554] An expenditure whose benefit is finished or enjoyed immediately is called
Correct Answer

(A) Expense

Explanation

Solution: An expenditure whose benefit is finished or enjoyed immediately is called Expense. An expense is the cost of operations that a company incurs to generate revenue.

[#2555] A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as
Correct Answer

(C) Inventory

Explanation

Solution: A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as Inventory.