1. An increase in the inventory is caused by additional purchase of goods

A. True

B. False

2. Return outwards is also known as sales returns.

A. True

B. False

3. Which of the following statements best describes an accounting equation?

A. A listing of assets and liabilities

B. A record of owners equity

C. A listing that shows assets, liabilities and owners equity

D. A record of closing entries

4. Accounts that normally show credit balances are

A. Assets, expenses and revenue

B. liabilities, expenses and drawings

C. Assets, expenses and capital

D. liabilities, capital and revenue

5. Which of the following items are shown under the correct classifications?

A. Assets: Bank overdraft

B. Liabilities: Loan from Public Bank

C. Revenue: Wages and salary

D. Owners equity: Accounts payable

6. Which of the following items is not classified as a current asset?

A. Cash

B. Accounts payable

C. Inventory

D. Accounts receivable

7. If total liabilities increase by $4,000, then

A, assets must have decreased by $4,000

B. owners equity must have increased by $4,000

C. assets must have increased by $4,000, or owners equity must have decreased by $4,000.

D. Assets and owners equity each increased by $ 2,000.

8. Which of the following is correct?

Accounts to be Debited Accounts to Be Credited

A. Bought a car in cash Bank Car

B. We pay Ali (customer) by cheque Cash Ali

C. Bought goods on credit Inventory Accounts receivable

D. Halim lends us RM 400 Bank Loan

9. If goods are taken for private use, the accounting record should be

A. debit drawings account, credit purchase account

B. debit drawings account, credit sales account

C. debit purchase account, credit drawings account

D. debit sales account, credit drawings account

10. Which of the following should be entered in the bank account?

A. Payment of purchases by cheque

B. Equipment bought on credit

C. Credit sales of the inventory

D. Return inwards