MGT101 Quiz: Modules 08 – 18
Topic: Accruals and Prepayments
1. Expenses for the period that remain unpaid at the end of the period should be:
A. Shown as a prepayment in the Statement of Financial Position.
B. Shown as a liability in the Statement of Financial Position and debited to the Income
Statement.
C. Deducted from the cash figure in the Statement of Financial Position.
D. Ignored until they are paid.
2. If an entity pays annual rent of Rs. 6,000 in quarterly installments in advance, and
the year ends one month after a payment, the prepayment amount is:
3. A. Rs. 500
4. B. Rs. 1,500
5. C. Rs. 1,000
6. D. Rs. 0
7. Recording an accrued expense has what effect on the financial statements?
8. A. Increases profit and increases net assets.
9. B. Reduces profit and reduces net assets
10. . C. Increases profit and reduces liabilities.
11. D. Has no effect on net assets.
12. Under the accrual-based accounting system, an unpaid electricity bill at year-end is:
A. Not recognized as an expense.
13. B. Recognized as an expense for the next year.
14. C. Recognized as an expense in the current year with a corresponding liability.
15. D. Only recorded if cash is paid.
Topic: Bad and Doubtful Debts
5. Which account is credited when a specific debtor is written off as a bad debt?
A. Bad Debts Account.
B. Provision for Doubtful Debts Account.
, C. Debtors’ (Accounts Receivable) Account.
D. Sales Account.
6. Doubtful debts are defined as:
A. Debts that have definitely been collected.
B. Accounts receivable where there is a high risk they will not be recovered.
C. Debts that are already paid in advance.
D. Debts owed to suppliers.
7. The "Provision for Doubtful Debts" is typically shown in the Statement of Financial
Position as:
A. A current liability.
B. An addition to Debtors.
C. A deduction from Debtors.
D. An intangible asset.
8. If the provision for doubtful debts is increased, the accounting entry is:
A. Debit Provision, Credit Bad Debts.
B. Debit Bad Debts, Credit Provision.
C. Debit Debtors, Credit Provision.
D. Debit Sales, Credit Bad Debts.
Topic: Depreciation
9. Which of the following is NOT a piece of information required to calculate
depreciation?
A. Depreciation rate.
B. Depreciation method (SLM or RBM).
C. The market value of the asset at the end of every month.
D. The date of purchase.
10. The "Net Book Value" (NBV) of a fixed asset is calculated as:
A. Cost + Depreciation Expense.
B. Cost – Accumulated Provision for Depreciation.
Topic: Accruals and Prepayments
1. Expenses for the period that remain unpaid at the end of the period should be:
A. Shown as a prepayment in the Statement of Financial Position.
B. Shown as a liability in the Statement of Financial Position and debited to the Income
Statement.
C. Deducted from the cash figure in the Statement of Financial Position.
D. Ignored until they are paid.
2. If an entity pays annual rent of Rs. 6,000 in quarterly installments in advance, and
the year ends one month after a payment, the prepayment amount is:
3. A. Rs. 500
4. B. Rs. 1,500
5. C. Rs. 1,000
6. D. Rs. 0
7. Recording an accrued expense has what effect on the financial statements?
8. A. Increases profit and increases net assets.
9. B. Reduces profit and reduces net assets
10. . C. Increases profit and reduces liabilities.
11. D. Has no effect on net assets.
12. Under the accrual-based accounting system, an unpaid electricity bill at year-end is:
A. Not recognized as an expense.
13. B. Recognized as an expense for the next year.
14. C. Recognized as an expense in the current year with a corresponding liability.
15. D. Only recorded if cash is paid.
Topic: Bad and Doubtful Debts
5. Which account is credited when a specific debtor is written off as a bad debt?
A. Bad Debts Account.
B. Provision for Doubtful Debts Account.
, C. Debtors’ (Accounts Receivable) Account.
D. Sales Account.
6. Doubtful debts are defined as:
A. Debts that have definitely been collected.
B. Accounts receivable where there is a high risk they will not be recovered.
C. Debts that are already paid in advance.
D. Debts owed to suppliers.
7. The "Provision for Doubtful Debts" is typically shown in the Statement of Financial
Position as:
A. A current liability.
B. An addition to Debtors.
C. A deduction from Debtors.
D. An intangible asset.
8. If the provision for doubtful debts is increased, the accounting entry is:
A. Debit Provision, Credit Bad Debts.
B. Debit Bad Debts, Credit Provision.
C. Debit Debtors, Credit Provision.
D. Debit Sales, Credit Bad Debts.
Topic: Depreciation
9. Which of the following is NOT a piece of information required to calculate
depreciation?
A. Depreciation rate.
B. Depreciation method (SLM or RBM).
C. The market value of the asset at the end of every month.
D. The date of purchase.
10. The "Net Book Value" (NBV) of a fixed asset is calculated as:
A. Cost + Depreciation Expense.
B. Cost – Accumulated Provision for Depreciation.
