Multiple-choice questions on accounting concepts like promoters, non-trading concerns, capital, depreciation, and single-entry systems.

Here are the answers to the multiple-choice questions:

1. The people who form a company are called:

• B. Promoters
  • Explanation: Promoters are individuals who undertake the preliminary steps to form a company.

2. In non-trading concerns, subscription received in advance is considered as:

• C. Liability
  • Explanation: Subscription received in advance represents money received for services yet to be provided, creating an obligation for the organization.

3. Opening capital is ascertained by preparing:

• B. Opening statement of affairs
  • Explanation: In the single-entry system, the opening capital is determined by preparing an opening statement of affairs, which is similar to a balance sheet.

4. Gradual decrease in value of a fixed asset due to its use in business is called:

• B. Depreciation
  • Explanation: Depreciation is the accounting process of allocating the cost of a tangible asset over its useful life.

5. Income of a non-trading concern is generated from:

• B. Receipts
  • Explanation: Non-trading concerns primarily generate income from various receipts like subscriptions, donations, and grants, rather than sales.

6. Which of the following is not prepared under single entry system?

• C. Trial balance
  • Explanation: A trial balance requires complete double-entry records, which are not maintained under the single-entry system.

7. The assets which have physical form are called:

• A. Tangible assets
  • Explanation: Tangible assets are physical assets such as land, buildings, and machinery.

8. Un-appropriated profits are shown as:

• B. Profit and loss account credit balance
  • Explanation: Un-appropriated profits represent accumulated profits not yet distributed or transferred, typically shown as a credit balance in the Profit and Loss Appropriation Account or Retained Earnings.

9. Non-trading concerns prepare:

• C. Income and expenditure account
  • Explanation: Non-trading concerns prepare an Income and Expenditure Account to determine their surplus or deficit for a period.

10. Patents, copyrights, goodwill are:

• B. Intangible assets
  • Explanation: These are assets that lack physical substance but have value due to legal rights or economic benefits.

11. Debenture holders are Creditors of company.

• A. Creditors
  • Explanation: Debenture holders lend money to the company and are therefore its creditors.

12. Depreciation is considered as a/an Expense for business.

• A. Expense
  • Explanation: Depreciation is an operating expense that reduces the value of an asset and is charged against revenue.

13. Nature of consignee account is:

• A. Personal account
  • Explanation: A consignee is a person or entity, so their account is classified as a personal account.

14. For a business, interest on capital is a/an:

• C. Expense
  • Explanation: From the business's perspective, interest paid on the owner's capital is an expense.