Accounts Receivable MCQs : This section focuses on the "Accounts Receivable". These Multiple Choice Questions (MCQs) should be practiced to improve the Accounts Receivable skills required for various interviews (campus interview, walk-in interview, company interview), placement, entrance exam and other competitive examinations.
Question 1
Assets minus liabilities equals
A. Equity
B. Net income
C. Working capital
D. Net assets
Question 2
Contra-entries are passed only when
A. Simple cash book is prepared
B. Double column cash book is prepared
C. Three column cash book is prepared
D. None of the above
Question 3
Credit sales are recorded as
A. Accounts Receivable
B. Accounts Payable
C. Both A & B
D. None of the above
Question 4
Depreciation is a process of
A. Allocation
B. Valuation
C. Both A & B
D. Appropriation
Question 5
'Equity schemes managed strong NAV gains, which boost their assets' was a news in some financial newspapers. What is the full form of the term NAV as used in above head lines ?
A. Nil Accounting Variation
B. New Asset Venture
C. Net Accounting Venture
D. Net Asset Value
Question 6
ETCS means
A. Electronic Tax Collected at Source
B. Electric Tax Collected at Source
C. Enable Tax Collected at Source
D. Electrical Tax Collected at Source
Question 7
Goods that are excludable include both
A. public goods and common resources
B. common resources and private goods
C. natural monopolies and public goods
D. private goods and natural monopolies
Question 8
In a general sense, "cash flow" can be said to equal
A. operating income less taxes
B. operating income after taxes minus depreciation
C. operating income less taxes plus depreciation
D. operating income before depreciation and taxes plus depreciation
Question 9
Invoice is an example of
A. Accounts Receivable
B. Accounts Payable
C. Both A & B
D. None of the above
Question 10
On a bank reconciliation, deposits in transit are
A. added to the book balance
B. added to the bank balance
C. deducted from the book balance
D. None of the above
Question 11
Other things the same, when the interest rate rises
A. people would want to lend less, making the supply of loanable funds decrease.
B. people would want to lend less, making the quantity of loanable funds supplied decrease.
C. people would want to lend more, making the supply of loanable funds increase.
D. people would want to lend more, making the quantity of loanable funds supplied increase.
Question 12
The accounting process involves all of the following except
A. identifying economic transactions that are relevant to the business
B. analyzing and interpreting financial reports
C. communicating financial information to users by preparing financial reports
D. recording nonquantifiable economic events
Question 13
The APC is calculated as
A. consumption/income
B. change in income/change in consumption
C. income/consumption
D. change in consumption/change in income
Question 14
The journal entry to record a credit sale is
A. Accounts Receivable
B. Accounts Payable
C. Both A & B
D. None of the above
Question 15
The largest component of National Income in India is ____ ?
A. Service Sector
B. Industrial Sector
C. Agriculture Sector
D. Trade Sector
Question 16
The principle of diversification tells us that
A. spreading an investment across many diverse assets will eliminate some of the total risk
B. concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk
C. spreading an investment across five diverse companies will not lower the total risk
D. concentrating an investment in three companies all within the same industry will greatly reduce the systematic risk
Question 17
Unearned revenue is classified as
A. Liability
B. Owner's equity
C. Asset
D. Income
Question 18
What determines the value of an item?
A. the capital required to build the factory
B. the unlimited wants of the consumers
C. the resources consumed in production
D. the amount of goods that are produced
Question 19
What type of account is accounts receivable?
A. Asset
B. Liability
C. Expense
D. Equity
Question 20
when a purchase on account is made the invoice becomes
A. debt
B. credit
C. both A & B
D. None of the above
Question 21
When an account becomes uncollectible and must be written off
A. Accounts Receivable should be credited
B. Sales Revenue should be debited
C. Allowance for Doubtful Accounts should be credited
D. Bad Debt Expense should be credited
Question 22
Which among the following is an asset for a bank?
A. The loans disbursed by Bank to its customers
B. Cash Deposits of Customers
C. Investments made by Bank’s customers in its financial Products
D. All of the above
Question 23
Which of the following best describes term life insurance?
A. The insured pays a premium for a specified number of years.
B. The insured is covered during his or her entire lifetime.
C. The insured pays the premium until his or her death.
D. The insured can borrow or collect the cash value of the policy.
Question 24
Which of the following is not economic investment?
A. the piling up of inventories on a grocer's shelf
B. the purchase of a drill press by the Ajax Manufacturing Company
C. construction of a suburban housing project
D. the purchase of 100 shares of AT&T by a retired business executive
Question 25
Which of the following is not true about enterprise systems?
A. Enterprise software is expressly built to allow companies to mimic their unique business practices.
B. Enterprise software includes analytical tools to evaluate overall organizational performance.
C. Enterprise system data have standardized definitions and formats that are accepted by the entire organization.
D. Enterprise systems help firms respond rapidly to customer requests for information or products.
Question 26
Which of the following statements about market segmentation is true?
A. It is a process of identifying and profiling distinct groups of buyers who differ in their needs and wants.
B. It is a process of creating an image or identity of the product in the minds of the target market.
C. It is a process of evaluating each segment's attractiveness and selecting one or more to enter.
D. It involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.
Question 27
Which one of the following is not a 'Money Market Instrument'?
A. Commercial Paper
B. Equity Shares
C. Certificate of Deposit
D. Treasury Bills