Associate Degree in Accounting and Finance (ADAF) - NUML Faisalabad

Question 1

Which financial statement reports the financial position of a business at a specific point in time?

Accepted Answer

Balance Sheet

Answer

Income Statement

Answer

Statement of Cash Flows

Answer

Statement of Retained Earnings

Question 2

Under the accrual basis of accounting, when are revenues recorded?

Accepted Answer

When the service or good is delivered

Answer

When cash is received

Answer

When the invoice is printed

Answer

At the end of the fiscal year

Question 3

Which principle dictates that expenses must be matched with the revenues they help generate in the same period?

Accepted Answer

Matching Principle

Answer

Revenue Recognition Principle

Answer

Cost Principle

Answer

Full Disclosure Principle

Question 4

What is the primary purpose of the 'Trial Balance' in the accounting cycle?

Accepted Answer

To prove that total debits equal total credits

Answer

To calculate the net profit for the year

Answer

To record daily transactions

Answer

To verify the liquidity of the business

Question 5

Which of the following accounts normally carries a credit balance?

Accepted Answer

Accounts Payable

Answer

Cash

Answer

Accounts Receivable

Answer

Prepaid Expenses

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