MCQs on "BALANCE SHEET ": Find the multiple choice questions on "BALANCE SHEET ", frequently asked for all competitive examinations.
Here are a few MCQs on BALANCE SHEET for your better understanding of the topic.
Q:1.
Balance sheet is also known as:
- A. Statement Of Financial Position
- B. Statement Of Operations
- C. Statement of finance
- D. Statement of operational position
Q:2.
The Statement of Financial Position gives the receipts minus the payments of an organization which is called as:
- A. Net Change in Receipts and Payments
- B. Net Cash Variation
- C. Net credit amount
- D. Net equity
Q:3.
The statement of financial position gives the information about the status of an organization by:
- A. Giving the details of the Inventory,
- B. Long term investments
- C. Assets
- D. Income and expenses
Explanation: At any point in time, there is a stock of products and materials held by a business. The balance sheet will give the details about these stocks and their value. This value may be compared to the value shown in last year’s balance sheet or in another previous period to determine whether the stock has increased or decreased.
Q:4.
The Statement of Financial Position gives the information about
- A. Assets and Liabilities
- B. Income
- C. Expenses
- D. Credits
Explanation: The statement of financial position gives the details about assets, their value, and the liabilities that a business owes to others at a particular point in time. This information helps to determine the net worth or equity of the business at that point in time.
Q:5.
All the following are included in the Statement of Financial Position except:
- A. Short term loans
- B. Short term investments
- C. Long term loans
- D. Long term investments
Explanation: Current assets are shown in the balance sheet and give details about cash, Inventory, accounts payable, and other current assets that a business or organization has at a particular point in time. The balance sheet will not give information about short-term loans or short-term investments.
Q:6.
Assets are shown in the balance sheet as
- A. Debt
- B. Equity
- C. Credit
- D. Asset
Explanation: Assets will be shown in “assets = liabilities + equity.” Equities represent the contribution of shareholders to a business. Hence equity is also referred to as “net worth” or simply “worth.”
Q:7.
Liabilities are shown in the balance sheet as:
- A. Income
- B. Expenses
- C. Credits
- D. Assets
Explanation: Liabilities show the amount of money a business owes to its creditors. In other words, liabilities are the amount of money a business owes to its investors, suppliers, and customers.
Q:8.
A company buys goods for $100 and pays $90. The amount owed to suppliers is $20. The company has bought $100 worth of goods. The amount owed to creditors is:
- A. Payments made to suppliers
- B. Payments made to creditors
- C. Payments made by suppliers
- D. Payment made by creditors
Explanation: The balance sheet details the items that the business or organization owes to its suppliers and creditors. These amounts are given at a particular point in time. If no money has changed hands, then nothing has changed since last year’s balance sheet.
Q:9.
Which assets are labelled as non-physical items:
- A. Property
- B. Intangible Assets
- C. Equipment
- D. Plants and plots
Explanation: Intangible assets are shown in the balance sheet as non-physical items like patents, trademarks, and goodwill that may not be easily converted into cash.
Q:10.
The statement of financial position will give the information about
- A. Shares of the company’s capital stock
- B. Shares of the company’s stock
- C. Shares of the market’s stock
- D. Shares of stocks
Explanation: The balance sheet gives details about a business or organization’s capital structure, also known as its long-term liabilities and equity.
Q:11.
The amount of money that a company owes to its creditors is called:
- A. Liabilities
- B. Current Liabilities
- C. Assets
- D. Credit ratings
Explanation: Liabilities are the debts or claims an organization owes to creditors or others. For example, if a business borrows money from a bank and then fails to repay it when it is due, this amount will be shown as one of the liabilities on its balance sheet.
Q:12.
A company has Inventory worth $100 and some accounts payable amounting to $60. In this case, the amount of current liabilities is
- A. $60
- B. $100
- C. $40
- D. $160
Explanation: A company’s current liabilities include all short-term or current monetary obligations or debts that an organization owes to others.
