IIM SKILLS Scholarship Test Business Accounting & Taxation Course
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Instructions:
This Scholarship Test is designed to assess Business Accounting & Taxation concepts.
You have 10 minutes to complete the test.
No prior knowledge of digital marketing is required.
This test will help determine eligibility for a scholarship to pursue the Business Accounting & Taxation Course.
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IIM SKILLS Scholarship Test Business Accounting & Taxation Course
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1. What is the primary purpose of accounting?
To create legal documents
To record, summarize, and report financial transactions
To provide business advice
To make investments
2. Which of the following is considered an asset?
Loan payable
Inventory
Salaries
Taxes
3. What is a 'liability' in accounting?
Money owned by the business
Money owed by the business
Income earned by the business
Equipment owned by the business
4. Which financial statement shows a company’s revenues and expenses?
Balance Sheet
Income Statement
Cash Flow Statement
Statement of Owner’s Equity
5. What does 'double-entry bookkeeping' mean?
Every transaction is recorded twice
Every transaction affects at least two accounts
Transactions are recorded at the end of the day
Transactions are recorded in two different books
6. What is 'revenue'?
Money spent on expenses
Money earned from sales or services
Money borrowed from the bank
Money owed to suppliers
7. Which of the following is an example of an expense?
Cash in hand
Sales income
Rent paid
Loan from a bank
8. What does a 'balance sheet' show?
The company's profit or loss
The company's assets, liabilities, and owner’s equity
The company's cash flow
The company's future plans
9. Which of the following is a type of tax?
Sales tax
Interest
Dividend
Salary
10. What is the purpose of a 'tax return'?
To report income and calculate taxes owed
To claim a refund on purchases
To document business expenses
To report business profits
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IIM SKILLS Scholarship Test Business Accounting & Taxation Course
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11. Which of the following is NOT a tax-deductible expense?
Office rent
Employee salaries
Personal vacation
Office supplies
12. What is 'gross income'?
Income after taxes
Total income before any deductions
Net profit
Income from investments
13. What is the difference between 'gross income' and 'net income'?
Gross income is after expenses, net income is before expenses.
Gross income is before expenses, net income is after expenses.
Gross income is only for businesses, net income is only for individuals.
There is no difference.
14. What does the term 'fiscal year' mean?
A calendar year
A 12-month period used for accounting purposes
A period of 6 months
A financial quarter
15. What is 'depreciation'?
An increase in the value of an asset
A decrease in the value of an asset over time
A type of tax
A method of calculating revenue
16. Which of the following is an example of a direct tax?
Sales tax
Income tax
Property tax
Excise tax
17. What is the role of an auditor in accounting?
To prepare tax returns
To review and verify the accuracy of financial statements
To manage daily accounting transactions
To calculate payroll
18. What is the 'taxable income'?
The total amount of income that is exempt from tax
The amount of income that is subject to tax after deductions
The total income before deductions
The income from investments only
19. What does 'accrued expense' mean in accounting?
An expense that has been paid in advance
An expense that has been incurred but not yet paid
An income that has been earned but not yet received
An asset that has increased in value
20. Which financial statement shows the cash inflows and outflows of a business?
Balance Sheet
Income Statement
Cash Flow Statement
Statement of Owner’s Equity
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IIM SKILLS Scholarship Test Business Accounting & Taxation Course
powered by IIM SKILLS
21. What is 'equity' in accounting?
The total liabilities of a company
The owner's interest in the company’s assets
The company's total revenue
The total expenses of the company
22. Which of the following is a current liability?
A long-term loan
Accounts payable
Office equipment
Inventory
23. What does the 'matching principle' in accounting refer to?
Recording revenue when cash is received
Recording expenses in the same period as the revenue they help to generate
Matching assets with liabilities
Matching income with tax payments
24. Which document is required for filing a tax return?
Balance sheet
Bank statement
Income statement
W-2 form (or similar income reporting form)
25. What is the purpose of 'withholding tax'?
To tax income before it is earned
To collect tax directly from the source of income
To delay tax payments
To reduce the overall tax rate
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