2.4 A sole trader’s capital at a particular date equals
(a) the amount of cash he has in the business.
(b) his net assets at cost in the business.
 (c) all his assets in the business at realizable values.
(d) all his assets at book values in the business less all liabilities of the business.

2.5 A balance sheet shows
(a) all assets of a firm at market values and all its liabilities at a particular date.
(b) all known assets and all known liabilities and capital of a firm at a particular date.
(c) estimated values of all assets, capital and liabilities of a firm at a particular date.
(d) all assets, all liabilities and proprietors’ fund at book values of a firm at a particular date.

2.6 A “liquid asset” means
(a) an asset in cash or readily convertible to cash.
(b) an asset which has not a physical form.
(c) an investment which is realizable at any time.
(d) a current asset other than trading stock

2.7 A machine bought for resale is
(a) a capital expenditure
(b) a trading stock item
(c) a fixed asset
(d) a production cost

2.8 A “break-even” sales volume means
(a) a sale volume which will produce no profit or loss
(b) a minimum sales volume which will produce the target profit.
(c) a sales volume which is very close to budget.
(d) a sales volume which is below the break-even point.

2.9 A dividend paid by a company is
(a) an appropriation of profits.
(b) a capital expenditure.
(c) a revenue expenditure.
(d) a return on capital

2.10 Capital profits mean
(a) profits derived from the use of capital
(b) profits derived from the use of fixed assets.
(c) returns on capital.
(d) profits from disposal of fixed assets.