Accounting and Finance problems
- 1. Is accounts receivable an asset or liability? Also asked in: Analyst, Bank Clerk, Bank PO
Correct Answer: Accounts receivable is the amount to be received by the seller from the customer Hence, it comes under asset
- 2. Which of the following best describes term life insurance?
Options- 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. Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: The insured pays a premium for a specified number of years.
- 3. The principle of diversification tells us that
Options- 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 Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: spreading an investment across many diverse assets will eliminate some of the total risk
Explanation:
The principle of diversification tells us that spreading an investment across many diverse assets will eliminate some of the total risk.
- 4. when a purchase on account is made the invoice becomes
Options- A. debt
- B. credit
- C. both A & B
- D. None of the above Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: debt
- 5. What type of account is accounts receivable?
Options- A. Asset
- B. Liability
- C. Expense
- D. Equity Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: Asset
Explanation:
Accounts receivable is listed as a current asset in the balance sheet, since it is usually convertible into cash in less than one year as it is the amount owed by the customer to the seller.
- 6. Invoice is an example of
Options- A. Accounts Receivable
- B. Accounts Payable
- C. Both A & B
- D. None of the above Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: Accounts Receivable
- 7. Bad debt expense is reported on the income statement as Also asked in: Analyst, Bank Clerk, Bank PO
Correct Answer: Bad debts expense often refers to the loss that a company experiences because it sold goods or provided services and did not require immediate payment The loss occurs when the customer does not pay the amount owed In other words, bad debts expense is related to a company's current asset accounts receivable You have already recorded the Rs 100 in your accounts receivable, and you need to eliminate that amount As you use double-entry accounting, you must record a Rs 100 credit to your accounts receivable and a Rs 100 debit to your allowance for doubtful accounts or your bad debts expense column
- 8. Other things the same, when the interest rate rises
Options- 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. Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: people would want to lend more, making the quantity of loanable funds supplied increase.
Explanation:
Other things the same, when the interest rate rises people would want to lend more, making the quantity of loanable funds supplied increase.
- 9. Assets minus liabilities equals
Options- A. Equity
- B. Net income
- C. Working capital
- D. Net assets Also asked in: CAT, Bank Exams, AIEEE, Bank PO, Bank Clerk, Analyst
Correct Answer: Equity
- 10. Which one of the following is not a 'Money Market Instrument'?
Options- A. Commercial Paper
- B. Equity Shares
- C. Certificate of Deposit
- D. Treasury Bills Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: Equity Shares
Explanation:
Money market instruments are debt securities that generally give the owner the unconditional right to receive a stated, fixed sum of money on a specified date.
There are several money market instruments in most Western countries, including treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage- and asset-backed securities.
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