Classification Of Accounts Quiz! Test

Approved & Edited by ProProfs Editorial Team

The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.

Learn about Our Editorial Process

| By Arshad.b.jumah

Arshad.b.jumah

Community Contributor

Quizzes Created: 3 | Total Attempts: 789

Questions: 15 | Attempts: 210 | Updated: Mar 21, 2023

Questions

Settings

Create your own Quiz

Questions and Answers

1.

Cash in hand
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
A. Asset

Explanation
Physical cash is something that the business owns

Rate this question:
2.

Cash at bank
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
A. Asset

Explanation
Money kept in the bank account is owned by the business.

Rate this question:
3.

Trade receivable
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
A. Asset

Explanation
Owings by customers to the business. Business will receive $ from customers in future.

Rate this question:
4.

Salaries
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
E. Expense

Explanation
Payments (of $) to be made to workers in the business.

Rate this question:
5.

Equipment
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
A. Asset

Explanation
Owned by business for long-term use.

Rate this question:
6.

Motor Vehicles
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
A. Asset

Explanation
Owned by business for long-term use.

Rate this question:
7.

Interest income
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
C. Income

Explanation
Earnings calculated as a percentage of money kept in the bank.

Rate this question:
8.

Inventory
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
A. Asset

Explanation
Goods bought for resale by the business.

Rate this question:
9.

Stationery
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
E. Expense

Explanation
As the value of stationery is low, it is classified as an expense instead. [Materiality concept]

Rate this question:
10.

Rent
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
E. Expense

Explanation
Recurring payments for renting (using) a place.

Rate this question:
11.

Trade payables
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
B. Liability

Explanation
Owings by the business to the supplier. Business will pay supplier in future.

Rate this question:
12.

Sales revenue
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
C. Income

Explanation
Selling price of the goods sold to customers.

Rate this question:
13.

Cost of sales
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
E. Expense

Explanation
Cost price of the goods sold. Recorded only when the business sells the goods.

Rate this question:
14.

Discounts received
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
C. Income

Explanation
Given by credit supplier (creditor/trade payables) to business to encourage early payment of cash. Given at the point of payment.

Rate this question:
15.

Discounts allowed
- A.
  
  Asset
- B.
  
  Liability
- C.
  
  Income
- D.
  
  Capital
- E.
  
  Expense
- F.
  
  Drawing
Correct Answer
E. Expense

Explanation
Given to credit customer (debtor/trade receivables) by business to encourage early payment of cash. Given at the point of payment.

Rate this question: