This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 116 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 116 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is financial accounting? A) It is a process to record financial transactions. B) It is a process to record project execution. C) It is a process to record the day to day activities in software project. D) All of the above. Show Answer Correct Answer: A) It is a process to record financial transactions. 2. Which of the following account is nominal account A) Accrued Interest Account. B) Interest account. C) Outstanding Interest Account. D) Prepaid Interest Account. Show Answer Correct Answer: B) Interest account. 3. Invest Company owns 30 percent of Ali Corporation. During the year, Ali had net earnings of $ 200, 000 and paid dividends of $ 18, 000. Invest mistakenly recorded these transactions using the cost method rather than the equity method. What effect would this have on the investment account, net earnings, and retained earnings, respectively? A) Understate, overstate, overstate. B) Overstate, understate, understate. C) Overstate, overstate, overstate. D) Understate, understate, understate. Show Answer Correct Answer: D) Understate, understate, understate. 4. As per concept of conservatism, the Accountant should provide for all possible losses but should not anticipate profit. A) True. B) False. Show Answer Correct Answer: A) True. 5. Which of the following maybe used to calculate the cost of production? A) Prime Cost + Factory Overheads-Opening work in Progress + Closing Work in Progress. B) Prime Cost-Factory Overheads-Opening Work in Progress +Closing Work in Progress. C) Prime Cost + Factory Overheads-opening work in Progress-closing work in progress. D) Prime Cost +Factory Overheads + Opening Working Progress-Closing work in progress. Show Answer Correct Answer: D) Prime Cost +Factory Overheads + Opening Working Progress-Closing work in progress. 6. Normative accounting theories and research seek to A) Explain and predict particular phenomena based on observation. B) Prescribe particular approaches not driven by existing practices. C) Describe what is normal, or generally accepted, practice. D) All of the given options are correct. Show Answer Correct Answer: B) Prescribe particular approaches not driven by existing practices. 7. Which type of business organization consists of two or more individuals equally sharing in all aspects of the business operations, including the splitting of profits and losses? A) Sole-proprietorship. B) Partnership. C) Limited Liability Corporation. D) Corporation. Show Answer Correct Answer: B) Partnership. 8. Double Entry System was started in the year A) 1944. B) 1949. C) 1494. D) 1499. Show Answer Correct Answer: C) 1494. 9. Which financial statement is directly affected by the balance sheet equation? A) Income statement. B) Cashflow statement. C) Statement of Retained Earninigs. D) Balance Sheet statement. Show Answer Correct Answer: D) Balance Sheet statement. 10. What is the purpose of a Cash Book? A) To ensure the accuracy of entries in a company's bookkeeping system. B) To record all cash and bank transactions. C) To keep track of all sales and revenue. D) To contain all impersonal accounts. Show Answer Correct Answer: B) To record all cash and bank transactions. 11. Where did trial balance originate A) Italy. B) India. C) Russia. D) America. Show Answer Correct Answer: A) Italy. 12. The accounts of the acquired company will be adjusted to the full fair value if the parent company owns 100% of the shares. However, if the company only purchases 80% share ownership, then the account will be adjusted to account for 80% of the difference between book and fair value, called the..... A) Acquisition Method. B) Purchase Method. C) Unification Method. D) Sales Method. Show Answer Correct Answer: B) Purchase Method. 13. Under personal category, Debit means A) The receiver. B) The giver. Show Answer Correct Answer: A) The receiver. 14. What is the purpose of a General Ledger? A) To record all cash and bank transactions. B) To keep track of all sales and revenue. C) To record all purchase invoices. D) To contain all impersonal accounts. Show Answer Correct Answer: D) To contain all impersonal accounts. 15. Following the expansion of mp stock purchasing and sales operations, a company has to settle 1/3 of its debts to suppliers with treaties. What are the two moving accounts. A) 404 operating francs/ 405 operating francs e.a.p. B) 401 frs f'exploitation/ 403 frs d'exploitation e.a.p. C) 404 frs d'immobilsation/532 banque. D) 404/frs of immobilization/405 frs of immobilization e.a.p. Show Answer Correct Answer: B) 401 frs f'exploitation/ 403 frs d'exploitation e.a.p. 16. When a partner leaves the firm with the consent of other partners, it is called A) Voluntary. B) Death. C) Retirement. D) Personal issues. Show Answer Correct Answer: C) Retirement. 17. The IRS was created in what year? A) 2000. B) 1913. C) 1933. D) 1914. Show Answer Correct Answer: B) 1913. 18. The government agency that collects taxes and enforces tax laws. A) Internal Revenue Service (IRS). B) Donald Trump's Enforcement Agency. C) International Revenue Service (IRS). D) Internal Reporting Service (IRS). Show Answer Correct Answer: A) Internal Revenue Service (IRS). 19. Land lord account is A) Personal. B) Real. C) Nominal. D) None of above. Show Answer Correct Answer: A) Personal. 20. Assets can be classified into: A) Current liability & Fixed Liability. B) Current assets & Fixed Liability. C) Fixed Liability & Non-Current Assets. D) Current & Fixed. Show Answer Correct Answer: D) Current & Fixed. ← 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