This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A company is a going concern if A) Its balance sheet shows a strong financial position. B) Its income statement for the current year shows huge profit. C) There is no evidence that it will or will have to cease operations within foreseeable future. D) It is a public limited company. Show Answer Correct Answer: C) There is no evidence that it will or will have to cease operations within foreseeable future. 2. The main revenue generating activity of the company is..... A) Operational Activities. B) Sales Activities. C) Funding Activities. D) Investment Activities. Show Answer Correct Answer: A) Operational Activities. 3. Converting Assets to Expenses What would be the effect on liabilities? A) Liabilities would increase. B) Liabilities would remain constant. C) LIabilities would decrease. D) None of the above. Show Answer Correct Answer: B) Liabilities would remain constant. 4. Unearned income a/c is A) Asset. B) Liability. C) Expense. D) Accrued income. Show Answer Correct Answer: A) Asset. 5. Voyage A/c (Sea Travel Account) is- A) Real account. B) Nominal ledger. C) Personal account. D) None of these. Show Answer Correct Answer: B) Nominal ledger. 6. Which basic journal is used to record specific basic transactions? A) General journal. B) Special journal. C) General ledger. D) All correct. Show Answer Correct Answer: B) Special journal. 7. A ..... is a copy of the bank's customer's account in the books of the bank. A) Cash Book. B) Bank Reconciliation Statement. C) Bank Statement. D) None of above. Show Answer Correct Answer: C) Bank Statement. 8. The main objective of financial reporting is to provide information A) To government departments. B) About the profitability of the business. C) Useful for making investment and lending decisions. D) Regarding sources and uses of cash. Show Answer Correct Answer: C) Useful for making investment and lending decisions. 9. A system of accounting which Is not based on double entry system is called A) Cash system. B) Mahajani system of accounting. C) Incomplete accounting system. D) Non of these. Show Answer Correct Answer: C) Incomplete accounting system. 10. The statement that provides information on the financial position of the entity. A) Statement of Cash Flows. B) Statement of Profit and Loss. C) Statement of Financial Position. D) Statement of Comprehensive Income. Show Answer Correct Answer: C) Statement of Financial Position. 11. How do calculate a company's Net Sales? A) Sales Discounts-(Sales) + Sales Returns & Allowances). B) Sales Returns & Allowances-Sales Discounts + Sales. C) Sales-(Sales Discounts + Sales Returns & Allowances). D) Sales Returns & Allowances-(Sales Discounts + Sales). Show Answer Correct Answer: C) Sales-(Sales Discounts + Sales Returns & Allowances). 12. Repairs to machinery is apportioned over the departments on the basis of A) Number of machines in each department. B) Value of machine. C) Floor area of each machine. D) Rent rate of each machine. Show Answer Correct Answer: B) Value of machine. 13. How do creditors utilize financial accounting information? A) To determine the company's employee benefits. B) To provide marketing strategies for the company. C) To assess the financial health and creditworthiness of a company, make lending decisions, and determine the terms of credit extended to the company. D) To assess the company's environmental impact. Show Answer Correct Answer: C) To assess the financial health and creditworthiness of a company, make lending decisions, and determine the terms of credit extended to the company. 14. The value of this assets diminishes with the passage of time A) Fixed asset. B) Current asset. C) Wasting asset. D) Fictitious asset. Show Answer Correct Answer: C) Wasting asset. 15. A balance sheet reports financial information on a specific date and includes the assets, liabilities, and owner's equity. A) True. B) False. Show Answer Correct Answer: A) True. 16. Who is Father of Accounting? A) Luca Pacioli. B) Lewis Pacioli. C) J.R. Batliboi. D) None. Show Answer Correct Answer: A) Luca Pacioli. 17. Efficiency ratios highlights: A) How well assets and liabilities are managed. B) Measures how quickly assets can be converted to cash. C) Share of ownership in a company. D) A comparison of two amounts. Show Answer Correct Answer: B) Measures how quickly assets can be converted to cash. 18. On January 1, Jack Company purchased a 40 percent interest in Pur Company for $ 350, 000. On this date, the book value of Pur's stockholders' equity was $ 500, 000. Pur reported net income of $ 200, 000 and paid no dividends. Jack accounts for this investment using the equity method. In its December 31 balance sheet, what amount should Jack report for this investment? A) $ 410, 000. B) $ 420, 000. C) $ 470, 000. D) $ 430, 000. Show Answer Correct Answer: D) $ 430, 000. 19. What is the example of information that a managerial accountant will share to the decision makers to help them making decision? A) The past financial performance. B) The company's profits reported several years ago. C) The anticipated profits or losses from a decision to be made. D) The name of the company. Show Answer Correct Answer: C) The anticipated profits or losses from a decision to be made. 20. WHAT STATEMENT OF FINANCIAL POSITION IS PREPARED AT THE DATE OF TRANSITION TO PFRS FOR SME? A) ORIGINATING STATEMENT OF FINANCIAL POSITION. B) CLOSING STATEMENT OF FINANCIAL POSITION. C) OPENING STATEMENT OF FINANCIAL POSITION. D) PROVISIONAL STATEMENT OF FINANCIAL POSITION. Show Answer Correct Answer: C) OPENING STATEMENT OF FINANCIAL POSITION. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Accounting Quiz 1Financial Accounting Quiz 2Financial Accounting Quiz 3Financial Accounting Quiz 4Financial Accounting Quiz 5Financial Accounting Quiz 6Financial Accounting Quiz 7Financial Accounting Quiz 8Financial Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books