This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 12 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Common set of accounting rules and procedures; needed in accounting to maintain accuracy and consistency of financial reports A) IRS laws. B) Financial reporting. C) Generally accepted accounting practices (GAAP). D) Disclosure principle. Show Answer Correct Answer: C) Generally accepted accounting practices (GAAP). 2. (l) ..... :a list of goods sent or services provided, with a statement of the sum due for these; as a bill. A) Debit advice. B) Credit advice. C) Receipt. D) Invoice. E) Quotation. Show Answer Correct Answer: D) Invoice. 3. Means transactions or entries of one nature are grouped under one head of account. A) Summarizing. B) Journalizing. C) Recording. D) Classifying. Show Answer Correct Answer: D) Classifying. 4. Step 5 in the Accounting Cycle A) Closing entries. B) Trial balance. C) Adjusted trial balance. D) Source documents. Show Answer Correct Answer: C) Adjusted trial balance. 5. Cash book is journal as well as A) Cash A/c. B) Ledger. C) Journal. D) Journal & Ledger. Show Answer Correct Answer: D) Journal & Ledger. 6. Sale of goods to X will be debited to? A) Cash a/c. B) Sales a/c. C) X a/c. D) None of these. Show Answer Correct Answer: C) X a/c. 7. A ..... amount will appear on the left side of a T-account. A) Credit. B) Debit. Show Answer Correct Answer: B) Debit. 8. Income Statement, Statement of Financial Position, and Statement of Cash Flows. A) Books of Accounts. B) Accounting Equation. C) Financial Statements. D) Financial Accounting. Show Answer Correct Answer: C) Financial Statements. 9. Policies and procedures companies follow to safeguard their assets. A) Controls. B) Hoarding assets. C) Safeguarding. D) None of above. Show Answer Correct Answer: A) Controls. 10. Define the chart of accounts. Overdraft A) No. 101. B) No. 1101. C) No. 2101. D) No. 1201. Show Answer Correct Answer: C) No. 2101. 11. If any kind of error is made in preparing a check, A) VOID should be written on the check. B) VOID should be written on the check stub. C) A new check should be prepared. D) All of the above. Show Answer Correct Answer: D) All of the above. 12. The business combination that ultimately result in the new company is called: A) Acquisition. B) Merger. C) Consolidation. D) None of the above. Show Answer Correct Answer: C) Consolidation. 13. What are the different types of accounts used in double-entry accounting? A) Income, Expenditure, Profit. B) Assets, Liabilities, Equity, Revenue, Expenses. C) Cash, Check, Savings. D) Debits, Credits, Balances. Show Answer Correct Answer: B) Assets, Liabilities, Equity, Revenue, Expenses. 14. Which is not an expense on the income statement of a sole proprietorship? A) Depreciation. B) Owner's drawing. C) Advertising. D) All of the above. Show Answer Correct Answer: B) Owner's drawing. 15. Sales discounts with terms 2/10, n/30 mean: A) 10 percent discount for payment within 30 days. B) 2 percent discount for payment within 10 days or the full amount (less returns) due within 30 days. C) Two-tenths of a percent discount for payment within 30 days. D) None of the above. Show Answer Correct Answer: B) 2 percent discount for payment within 10 days or the full amount (less returns) due within 30 days. 16. What is the definition of financial accounting? A) The process of analyzing stock market trends. B) The process of recording, summarizing, and reporting the transactions of a business for external users. C) The process of marketing financial products to consumers. D) The process of managing internal finances within a business. Show Answer Correct Answer: B) The process of recording, summarizing, and reporting the transactions of a business for external users. 17. Explain the concept of 'matching principle' in financial accounting. A) Expenses should be recognized in a different period than the revenues to which they relate. B) Matching principle is not important in financial accounting. C) Matching principle only applies to non-operating expenses. D) Expenses should be recognized in the same period as the revenues to which they relate. Show Answer Correct Answer: D) Expenses should be recognized in the same period as the revenues to which they relate. 18. John & Co sold an item of used machinery at $ 5000.What will be the effect on financial statements?1. Sales will increase by $ 5000 2. Profit will increase by $ 5000 3. Non-Current assets will decrease by $ 5000 A) 1 & 2. B) 1 & 3. C) 3 only. D) 1, 2 & 3. Show Answer Correct Answer: C) 3 only. 19. Which of the following is an assets? A) Bad debt provision. B) Rent in arrears. C) Sales. D) Insurance prepaid. Show Answer Correct Answer: D) Insurance prepaid. 20. What is the purpose of a Purchase 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: C) To record all purchase invoices. ← 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