Correct Answer:
B. A current asset
Payment made in advance gives a future benefit and is therefore an asset.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
A prepaid expense is shown in the statement of financial position as:
Related MCQs
Job order costing is most suitable for:
A.
Custom-made products such as construction projects or printing orders
B.
Continuous production of identical items such as cement
C.
Oil refining
D.
Sugar milling
Correct answer is:
A. Custom-made products such as construction projects or printing orders
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The normal balance of a revenue account is:
A.
Debit
B.
Zero
C.
Depends on the auditor
D.
Credit
Correct answer is:
D. Credit
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The weighted average cost of capital (WACC) is:
A.
The cost of equity only
B.
The average cost of all sources of capital weighted by their proportions in the capital structure
C.
The interest rate on the latest loan
D.
The dividend rate on preference shares only
Correct answer is:
B. The average cost of all sources of capital weighted by their proportions in the capital structure
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Total debt is Rs. 400,000 and total equity is Rs. 200,000. The debt-to-equity ratio is:
A.
0.5
B.
2.0
C.
1.5
D.
3.0
Correct answer is:
B. 2.0
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In vertical analysis, each item in a financial statement is expressed as a percentage of:
A.
The same item in the previous year
B.
Industry average
C.
A base figure such as total assets or sales in the same period
D.
Net profit only
Correct answer is:
C. A base figure such as total assets or sales in the same period
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Under the accrual basis of accounting, revenue is recognized:
A.
When it is earned, regardless of when cash is received
B.
Only when cash is received
C.
Only when the invoice is paid
D.
At the end of the year only
Correct answer is:
A. When it is earned, regardless of when cash is received
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