This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 114 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 114 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Legacies are generally A) Treated as income. B) Capitalized and taken to balance sheet. C) Treated as expenditure. D) Treated as Revenue and payments. Show Answer Correct Answer: B) Capitalized and taken to balance sheet. 2. Which of following best describes what an accounting department does for a business? A) Considers what new technology is best for the business at this time. B) Delegates decisions to another department to avoid being blamed for mistakes. C) To determine the legality of hiring one candidate over another. D) To see whether the company can afford purchases. Show Answer Correct Answer: D) To see whether the company can afford purchases. 3. Financial Statement that shows final financial position of the company as on the last day of the year is called ..... A) Income Statement. B) Balance Sheet. C) Profit & Loss Account. D) Trading Account. Show Answer Correct Answer: B) Balance Sheet. 4. Which account of the following will be credited on giving of goods in donation- A) Sales A/c. B) Purchases A/c. C) Donation A/c. D) Cash A/c. Show Answer Correct Answer: B) Purchases A/c. 5. Which of the following information is obtained from a completed daysheet? A) Credit bureau accounts. B) Accounts receivable data. C) Annual gross income of a medical practice. D) Amount in a petty cash fund. Show Answer Correct Answer: B) Accounts receivable data. 6. Costs used to earn (generate) revenues. A) Assets. B) Liabilities. C) Revenue. D) Expenses. Show Answer Correct Answer: D) Expenses. 7. Behavioural is an observation of the accountants or the users of the informations A) True. B) False. Show Answer Correct Answer: B) False. 8. Accounting is an information and measurement system that does all the following except: A) Records business activities. B) Identifies business activities. C) Communicates business activities. D) Eliminates the need for interpreting financial data. E) Helps people make better decisions. Show Answer Correct Answer: D) Eliminates the need for interpreting financial data. 9. Which type of asset has a non-physical form? A) Master asset. B) Tangible asset. C) Informal asset. D) Intangible asset. E) None of the above. Show Answer Correct Answer: D) Intangible asset. 10. What are the different types of financial ratios used in financial accounting? A) Debt ratios, equity ratios, and liability ratios. B) Cash ratios, inventory ratios, and receivables turnover ratios. C) Liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios. D) Income ratios, expense ratios, and asset ratios. Show Answer Correct Answer: C) Liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios. 11. Accrual Concept implies accounting on cash basis A) True. B) False. Show Answer Correct Answer: B) False. 12. Under instalment payment system, ownership of goods A) Is transferred at the time of payment of last instalment. B) Is not transferred. C) Is transferred at the time of signing the contract. D) None of the above. Show Answer Correct Answer: C) Is transferred at the time of signing the contract. 13. Which of the following business organizations has the word "Enterprise" at the end of its name? A) Partnership. B) Public company. C) Private company. D) Sole proprietorship. Show Answer Correct Answer: D) Sole proprietorship. 14. An adjusting entry is not required for A) Outstanding checks. B) NSF checks. C) Bank service charges. D) Collection of a note by the bank. Show Answer Correct Answer: A) Outstanding checks. 15. Return inwards are A) Goods returned to the supplier. B) Goods received from suppliers. C) Good sold to customers. D) Goods returned from customers. Show Answer Correct Answer: D) Goods returned from customers. 16. CASH RECEIPTS FROM ROYALTIES AND COMMISSIONS ARE: A) CASH FLOWS FROM OPERATING ACTIVITIES. B) CASH FLOWS FROM INVESTING ACTIVITIES. C) CASH FLOWS FROM FINANCING ACTIVITIES. D) NOT REPORTED IN THE CASH FLOW STATEMENT. Show Answer Correct Answer: A) CASH FLOWS FROM OPERATING ACTIVITIES. 17. An expert says that the value of the management team of the company is worth well over a million dollars yet nothing is entered for it in the books. What accounting concept is being applied? A) Money measurement. B) Materiality. C) Substance over form. D) Dual aspect. Show Answer Correct Answer: A) Money measurement. 18. 25% of the Cost is A) 20% of Invoice. B) 30% of Invoice. C) 25% of Invoice. D) None of the Above. Show Answer Correct Answer: A) 20% of Invoice. 19. Which of the following statements best defines a liability? A) A liability is an obligation arising from a past transaction or event. B) A liability is a legally binding amount owed to a third party. C) A liability is an obligation arising from a past transaction or event which is expected to be settled by an outflow of economic benefits. D) A liability is anything which results in an outflow of economic benefits from an entity. Show Answer Correct Answer: C) A liability is an obligation arising from a past transaction or event which is expected to be settled by an outflow of economic benefits. 20. Cash at bank is a A) Current asset. B) Current liability. C) None of these. D) None of above. Show Answer Correct Answer: A) Current asset. ← 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