This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 123 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 123 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Goods which were sold on credit are returned by the customer as unsatisfactory. This is recorded in the accounts as: A) Dr Sales returns account Cr Trade receivable. B) Dr Purchase returns Cr Trade receivable. C) Dr Trade payable Cr Purchase returns. D) Dr Trade receivable Cr Sale returns. Show Answer Correct Answer: A) Dr Sales returns account Cr Trade receivable. 2. Which of the following is a correct journal entry for the purchase of inventory on credit? A) Debit Inventory, Credit Accounts Payable. B) Debit Accounts Payable, Credit Inventory. C) Debit Cash, Credit Accounts Receivable. D) Debit Accounts Receivable, Credit Cash. Show Answer Correct Answer: B) Debit Accounts Payable, Credit Inventory. 3. Which of the following accounts category with normal balance are shown at the debit side of a trial balance? A) Assets and Income. B) Liabilities and Income. C) Assets and Expenses. D) Liabilities and Expenses. Show Answer Correct Answer: C) Assets and Expenses. 4. Salaries and Wages Appear in A) Trading Account. B) Balance Sheet. C) Profit and Loss Account. D) None. Show Answer Correct Answer: C) Profit and Loss Account. 5. If the company is ..... interest due on debentures shall be paid up to the date of actual payment. A) Insolvent. B) Solvent. C) Bankrupt. D) None of above. Show Answer Correct Answer: B) Solvent. 6. When a company tries to design and produce products or services that serve unique market needs, allowing it to charge higher prices, such as Nike or BMW. A) Accounting Cycle. B) Low-cost strategy. C) Premium-price strategy. D) Retained Earnings. Show Answer Correct Answer: C) Premium-price strategy. 7. You want to know the cost of goods sold by the business in a particular period. What is the financial statement that you need to check? A) Income Statement. B) Balance Sheet. C) Cash Flow Statement. D) Statement of Owner's Equity. Show Answer Correct Answer: A) Income Statement. 8. Net Profit is reflected in higher cash balances and net loss is reflected in lower net worth. A) True. B) False. Show Answer Correct Answer: B) False. 9. Profit is equal to: A) Income minus expenses. B) Receipts minus expenditures. C) Inflows minus outflows. D) Revenue minus expenses. Show Answer Correct Answer: D) Revenue minus expenses. 10. Entries made on the first day of a new period that switch the debits and credits of the adjusting entries made on the last day of the previous period. A) Adjusting Entries. B) Reversing Entries. C) Income Entries. D) Balance Sheet Adjusting. Show Answer Correct Answer: B) Reversing Entries. 11. Which one is not a current liability? A) Trade payables. B) Overdraft. C) Long term loan. D) Short term loan. Show Answer Correct Answer: C) Long term loan. 12. What is the purpose of a Sales 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: B) To keep track of all sales and revenue. 13. To decrease the balance in the following accounts, would you debit the account or would you credit the account?Unearned Revenue A) Debit. B) Credit. Show Answer Correct Answer: A) Debit. 14. The person or firm that sells its business to another firm or company is referred to as A) Goodwill. B) Capital reserve. C) Vendor. D) Purchase consideration. Show Answer Correct Answer: C) Vendor. 15. , Mr. Haidar sold a teak wood cupboard to Mrs. Yeni for Rp. 15, 000, 000 with conditions 2/10, n/60. However, when Mrs. Yeni's trade receivables were approaching maturity, they were replaced by money orders. So the receivables transfer journal is..... A) Notes Receivable (D) and Accounts Receivable (K) amounting to IDR 15, 000, 000. B) Notes Receivable (D) and Accounts Receivable (D) amounting to IDR 15, 000, 000. C) Notes Receivable (K) and Trade Receivables (K) amounting to IDR 15, 000, 000. D) Notes Receivable (K) and Accounts Receivable (D) amounting to IDR 15, 000, 000. Show Answer Correct Answer: A) Notes Receivable (D) and Accounts Receivable (K) amounting to IDR 15, 000, 000. 16. What type of an account is cash? A) ASSET. B) LIABILITIES. C) OWNER'S EQUITY. D) None of above. Show Answer Correct Answer: A) ASSET. 17. An economic transaction or event that affects an entity's assets, liability, equity, income or expense is A) Recorded in the books of accounts. B) Posted in the ledger. C) An accountable event. D) All of these. Show Answer Correct Answer: D) All of these. 18. Accrued expenses are expenses that have been incurred but not yet been recorded. A) True. B) False. Show Answer Correct Answer: A) True. 19. Principle requiring that the same accounting methods and format of statements should be used over time so they can be compared. A) Principle of Permanance of Methods. B) Principle of Sincerity. C) Principle of Regularity. D) Principle of Consistency. Show Answer Correct Answer: A) Principle of Permanance of Methods. 20. The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns: A) Between 20% and 50% of the investee's common stock. B) 20% or more of the investee's common stock. C) More than 50% of the investee's common stock. D) Less than 20% of the investee's common stock. Show Answer Correct Answer: A) Between 20% and 50% of the investee's common stock. ← 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