Note – Please take our quiz ‘Quiz 3 – Accounting Fundamentals – Intermediate’ on this page before going through the below answers. Only the top 3% of our audience score 10/10 in all of them.
- Name – Quiz 3 – Accounting Fundamentals – Intermediate
- Topic – Accounting Fundamentals
- Answers with Explanations
Q1. Purchase of fixed assets is a _____ expenditure.
Ans. Purchase of fixed assets is a capital expenditure. Money spent on the fixed assets will provide benefit to the entity for more than one accounting period and so will be capitalized.
Q2. Return outwards is also known as _____.
Ans. Return outwards is also known as purchase returns. These goods were purchased previously by the entity and are now being returned to the supplier.
Q3. Capital is also known as _____.
Ans. Capital is also known as equity. These are the funds invested by the owners in the business.
Q4. The person to whom money is to be paid is called _____.
Ans. The person to whom money is to be paid is called payee. The receiver of the money is called a payee whereas the other party is called a payer.
Q5. Salvage value means _____.
Ans. Salvage value means residual value. It is the estimated value of a fixed asset at the end of its lease term or useful life.
Q6. Transferring entry into ledger account is called _____.
Ans. Transferring entry into ledger account is called journal posting. It is the process of grouping all the transactions with respect to a particular account in one place for a meaningful conclusion.
Q7. Accounts payable is a _____ liability for the business.
Ans. Accounts payable is a current liability for the business. These are the amounts due to vendors or suppliers for commodities received that have not yet been paid for.
Q8. Which of these is a branch of accounting?
Ans. Management accounting is a branch of accounting. Management accounting provides data about a company’s operations to managers. It helps provide data to the managers for decision making.
Q9. Ratio analysis and risk management are tools of _____.
Ans. Ratio analysis and risk management are tools of finance. Accounting tools include financial statements. Similarly, financial tools include ratio analysis, risk management, and returns on investment.
Q10. Top line = _____
Ans. Top line = Revenue. ‘Top line’ is the company’s total sales, before subtracting any operational costs. ‘Bottom line’ is the company’s profits after subtracting expenses from the top line.
