Quick Fire [assets, Liabilities, Expenses, Equity, Income] Ncea Lvl 1 Accounting

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Quizzes Created: 8 | Total Attempts: 1,589
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Quick Fire [assets, Liabilities, Expenses, Equity, Income] Ncea Lvl 1 Accounting - Quiz

Statement of Financial Position / Balance Sheet
Sonny Bill Williams LTD - For the Year Ended 31 March 31/03/Infinity [we hope]Is Sonny Bill Williams an Asset or a Liability? Mmmm


Questions and Answers
  • 1. 

    Accounts Receivable

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    A. Current Asset
    Explanation
    Accounts Receivable refers to the amount of money that a company is owed by its customers for goods or services that have been delivered but not yet paid for. As it represents a company's right to receive payment, it is considered a Current Asset. Current Assets are assets that are expected to be converted into cash within one year or one operating cycle, whichever is longer. Therefore, the correct answer is Current Asset.

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  • 2. 

    Accounts Payable

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    I. Current Liability
    Explanation
    Accounts Payable is classified as a current liability because it represents the amount of money that a company owes to its suppliers or vendors for goods or services received but not yet paid for. As it is a short-term obligation, it is considered a current liability on the company's balance sheet.

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  • 3. 

    Goodwill

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Intangible Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    E. Non Current Asset - > Intangible Asset
    Explanation
    Goodwill is classified as a non-current asset because it represents the value of a company's reputation, brand recognition, and customer relationships. It is an intangible asset because it cannot be physically touched or seen, but it has value and can generate future economic benefits for the company.

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  • 4. 

    Opening Capital

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Intangible Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    H. Equity
    Explanation
    Equity refers to the ownership interest in a company. It represents the residual value of assets after deducting liabilities. It is the owner's claim on the company's assets and is also known as shareholders' equity or net worth. Equity can be increased by investments made by the owners or by retaining profits in the business. It represents the portion of the company's value that belongs to the owners.

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  • 5. 

    Profit for the Year

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Intangible Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    H. Equity
    Explanation
    Equity refers to the ownership interest in a company. It represents the residual interest in the assets of the company after deducting liabilities. Profit for the year is a component of equity as it increases the owner's equity in the business. This is because profit represents the excess of revenue over expenses, which contributes to the overall value of the company. Therefore, the correct answer is equity.

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  • 6. 

    Inventory

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Intangible Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    A. Current Asset
    Explanation
    Inventory is classified as a current asset because it is a resource that the company owns and expects to convert into cash or sell within one year. As a current asset, it is included in the balance sheet under the assets section. This classification is important for financial analysis and decision-making as it helps to assess the liquidity and short-term financial health of the company.

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  • 7. 

    Bank Overdraft

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Intangible Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    I. Current Liability
    Explanation
    A bank overdraft is classified as a current liability because it represents the amount of money that a company owes to the bank and is payable within one year. It is considered a short-term borrowing arrangement and is typically used by businesses to manage cash flow fluctuations. The overdraft amount is recorded on the balance sheet under current liabilities because it is expected to be repaid within a relatively short period of time.

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  • 8. 

    Petty Cash

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Intangible Asset

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    A. Current Asset
    Explanation
    A current asset is an asset that is expected to be converted into cash within one year or the operating cycle of a business. Petty cash is a small amount of cash that is kept on hand to cover minor expenses. Since petty cash is a current asset, it can be easily converted into cash within a short period of time. Therefore, the correct answer is "Current Asset".

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  • 9. 

    Bank

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Investments

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    A. Current Asset
    Explanation
    A current asset refers to any asset that is expected to be converted into cash within one year or one operating cycle. In the context of a bank, current assets would include cash, cash equivalents, and other liquid assets that can be readily used to meet the bank's short-term obligations. Therefore, the given answer "Current Asset" is the correct choice as it accurately describes the category of assets that banks typically hold.

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  • 10. 

    Loan (12% per annum due 15/03/2040)

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Investments

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    D. Non-Current Liability
    Explanation
    The given correct answer is "Non-Current Liability" because a loan is a liability that is not expected to be paid off within one year, making it a non-current liability. The interest rate of 12% per annum and the due date of 15/03/2040 further indicate that it is a long-term liability.

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  • 11. 

    Drawings

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Investments

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    F. Negative Equity
    Explanation
    Negative equity refers to a situation where the value of a company's liabilities exceeds the value of its assets. It indicates that the company owes more than it owns, resulting in a negative net worth. This can occur due to accumulated losses or a decline in the value of assets. Negative equity can be a sign of financial instability and may affect the company's ability to attract investors or obtain loans.

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  • 12. 

    Prepayments

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Investments

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    A. Current Asset
    Explanation
    Prepayments are considered as current assets because they represent advance payments made by a company for goods or services that will be received in the future. These prepayments are expected to be utilized within one year or the operating cycle of the business. As such, they are classified as current assets on the balance sheet.

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  • 13. 

    Accrued Expense

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Investments

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    I. Current Liability
    Explanation
    A current liability is a debt or obligation that is expected to be settled within one year or within the normal operating cycle of a business. Accrued expenses are expenses that have been incurred but not yet paid or recorded. They represent a current liability because they are expected to be paid within the next year. Therefore, the correct answer is current liability.

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  • 14. 

    Total Carrying Amount

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Property, Plant and Equipment

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    E. Non Current Asset - > Property, Plant and Equipment
  • 15. 

    Shares in BroSir LTD

    • A.

      Current Asset

    • B.

      Negative Income

    • C.

      Negative Asset

    • D.

      Non-Current Liability

    • E.

      Non Current Asset - > Investments

    • F.

      Negative Equity

    • G.

      Income

    • H.

      Equity

    • I.

      Current Liability

    • J.

      Expense

    Correct Answer
    E. Non Current Asset - > Investments
    Explanation
    The correct answer is "Non Current Asset - > Investments" because investments are typically classified as non-current assets on a company's balance sheet. Non-current assets are long-term assets that are not expected to be converted into cash within one year. Investments are considered non-current assets because they are held for a longer period of time and are not intended for immediate sale.

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