Book Keeping & Accountancy Exam Questions

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Questions and Answers

Which statement correctly describes the Composition of Financial Statements?

Financial statements exclusively consist of the Income and Expenditure Account.
Financial statements are composed of the Balance Sheet, Income Statement, and Cash Flow Statement. (correct)
Financial statements include only the Balance Sheet.
Financial statements include the Income Statement and Cash Flow Statement.

Who is identified as the endorsee in a bill of exchange?

The person to whom the bill is addressed.
The individual in whose favor the bill is endorsed. (correct)
The person who writes the bill.
The individual who accepts the bill.

What entitlement does a retiring partner have regarding the General Reserve and Accumulated profit?

They are entitled to share in the General Reserve and Accumulated profit.
They have no entitlement to either the General Reserve or Accumulated profit. (correct)
They are fully entitled to the entire General Reserve.
They are entitled to a partial share of the General Reserve.

Which type of account does the Income and Expenditure Account represent?

<p>Nominal Account (D)</p> Signup and view all the answers

What is the term used for the proportion in which the continuing partners receive the share of a retiring partner?

<p>Gain Ratio (A)</p> Signup and view all the answers

Flashcards

Do financial statements only include the Balance Sheet?

A financial statement is a summary of a company's financial performance. It includes the balance sheet, income statement, and cash flow statement.

Who is the endorsee?

The person in whose favor the bill is endorsed is known as the endorsee. They are the person who receives the bill after it has been transferred by the endorser.

Can a retiring partner share in the general reserve?

A retiring partner is entitled to share in the general reserve and accumulated profit. They are entitled to their share of the profits made by the partnership during their time as a partner.

What type of account is an income and expenditure account?

An income and expenditure account is a type of nominal account used to record the income and expenditure of non-profit organizations. It is not a real account, which records assets and liabilities.

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Is a partnership firm always a trading concern?

A partnership firm is not always a trading concern. A trading concern is a business that buys and sells goods. Partnership firms can be involved in various activities, including service-based businesses.

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Study Notes

Book Keeping & Accountancy Exam Questions

Question 1 (A): Agree or disagree with statements about financial statements.
- Statement 1: Financial statements only include balance sheets. (Disagree)
- Statement 2: The person a bill is endorsed to is called the endorsee. (Agree)
- Statement 3: Retiring partners aren't entitled to general reserve/accumulated profits. (Agree)
- Statement 4: Income and expenditure accounts are real accounts. (Agree)
- Statement 5: A partnership firm is a trading concern. (Agree)