Author Archives: Aban Cheema

In straight line method, the depreciation charge is:

A. A fixed percentage of the cost of the asset each year
B. Always 5% of the cost of the asset each year
C. A fixed percentage of the book value of the asset each year
D. None of the above.

The purpose of double entry bookkeeping is:

A. To apply the dual aspect concept.
B. To prepare books of prime entry accurately
C. To avoid errors
D. To record capital and revenue transactions correctly

Depreciation is to be charged because

A. The machinery gets old with time
B. Of physical wear and tear
C. Of fall in the market value of the asset
D. The plant is not as good as new one

Sales= 150,000 Gross profit = 15,000 Net loss= 4,000 Then the operating expenses will be

A. 19,000
B. 165,000
C. 131,000
D. 11,000

Cost of sale is equal to

A. Sales -purchases 895
B. Opening stock – closing stock + purchase – returns out
C. Purchases – returns out + closing stock If.
D. Gross profit – expenses

The Current Ratio formula is

A. All assets: All Liabilities
B. All assets: Current liabilities
C. Current assets: All liabilities
D. Current assets: Current liabilities

A petty cash book records

A. All petty cash receipts
B. Petty transactions
C. Cash receipts from customers
D. All petty cash expenses

Audit of the sole-trader business is

A. Compulsory
B. Not compulsory
C. Compulsory in certain cases
D. None of these