This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 139 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 139 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Receipts, bills, invoices, statements, checks ..... anything that documents a transaction. A) Journal. B) Source document. C) Chart of accounts. D) Trial balance. Show Answer Correct Answer: B) Source document. 2. If all the business transactions are expressed in monetary terms, it will be easy to understand the accounts prepared by the business enterprise. A) Business Entity Concept. B) Revenue Recognition Concept. C) Money Measurement Concept. D) Going Concern Concept. Show Answer Correct Answer: C) Money Measurement Concept. 3. Expenses whose actual payment has not yet occurred but have become a burden for the company because the company has received the benefits so that it is a debt in the period concerned are..... A) Accrued revenue. B) Accrued expense. C) Unearned revenue. D) Prepaid expense. E) Operating expense. Show Answer Correct Answer: B) Accrued expense. 4. A deed of partnership is: A) A document that states what product a business sells. B) A type of business. C) A business book. D) A legal document. Show Answer Correct Answer: D) A legal document. 5. Unrecoupable short-workings should be charged to Profit and Loss Account. A) True. B) False. Show Answer Correct Answer: A) True. 6. Cash flows from operating activities include: A) Sale of long-term investments. B) Payments to suppliers and employees. C) Purchase of property and equipment. D) None of above. Show Answer Correct Answer: B) Payments to suppliers and employees. 7. In the accounts of a manufacturing firm, the cost of raw materials used during an accounting period should be included under the heading ..... A) Factory overhead expenses. B) Administrative expenses. C) Prime cost. D) Selling and distribution expenses. Show Answer Correct Answer: C) Prime cost. 8. Based on observed behavior of accountants theory developed from how accountants act in certain situations tested by observing whether accountants do act in the way the theory suggests is an inductive approach statement above was a Descriptive pragmatic approach A) True. B) False. Show Answer Correct Answer: A) True. 9. The debts which are to be repaid within a short period (a year or less) are referred to as, A) Current Liabilities. B) Fixed liabilities. C) Contingent liabilities. D) All the above. Show Answer Correct Answer: A) Current Liabilities. 10. The activities or steps that help a business keep its accounting records in an orderly manner. A) Financial Statements. B) Financial Records. C) Accounting Period. D) Accounting Cycle. Show Answer Correct Answer: D) Accounting Cycle. 11. The company receives cash from a bank loan.-The assets will A) Increase. B) Decrease. C) No effect. D) None of above. Show Answer Correct Answer: A) Increase. 12. Which groups of people are most likely to be interested in the financial statement of a sole trader (2 Marks) i. Shareholders of the company ii. The business bank manage iii. The tax authority iv. Financial analysts A) I&ii Only. B) I&iii Only. C) Ii, iii and iv Only. D) I, ii and iii Only. Show Answer Correct Answer: C) Ii, iii and iv Only. 13. Which of the following accounts is prepared to find out the cost of production? A) Manufacturing account. B) Trading account. C) Profit and loss account. D) Balance sheet. Show Answer Correct Answer: A) Manufacturing account. 14. The owner invests personal cash in the business.-The liabilities will A) Increase. B) Decrease. C) No affect. D) None of above. Show Answer Correct Answer: C) No affect. 15. How are royalties classified in a manufacturing firm? A) Direct expense. B) Indirect expense. C) Administrative expense. D) Selling & distribution expense. Show Answer Correct Answer: B) Indirect expense. 16. This concept states that a business firm will continue to carry on its activities for an indefinite period of time. A) Money Measurement Concept. B) Historical Cost Concept. C) Going Concern Concept. D) Dual Aspect Concept. Show Answer Correct Answer: C) Going Concern Concept. 17. Explain how investors use financial accounting information. A) To analyze the financial health and performance of a company, make investment decisions, and assess the potential risks and returns. B) To determine the company's customer satisfaction. C) To learn about the history of the company. D) To calculate the company's market share. Show Answer Correct Answer: A) To analyze the financial health and performance of a company, make investment decisions, and assess the potential risks and returns. 18. In the hire purchase system interest charged by vendor is calculated on the basis of the outstanding cash price. A) True. B) False. Show Answer Correct Answer: A) True. 19. A business entity is owned and run by Alpha, Beta and Gamma. What type of business is this an example of? A) Sole trader. B) Partnership. C) Limited liability company. D) None of the above. Show Answer Correct Answer: B) Partnership. 20. The balance in the 'goods sent to branch ' account is transferred to A) Branch account. B) Head office account. C) Profit and loss account. D) Trading or purchase account. Show Answer Correct Answer: D) Trading or purchase account. ← 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