This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 14 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Financial accounting: A) Focuses on the future and includes activities such as preparing next year's operating budget. B) Must comply with GAAP (generally accepted accounting principles). C) Reports include detailed information on the various operating segments of the business such asproduct lines or departments. D) Is prepared for the use of department heads and other employees. Show Answer Correct Answer: B) Must comply with GAAP (generally accepted accounting principles). 2. Find the term to match the meaning below:The result of subtracting cost of sales from the net sales revenue A) Gross profit. B) Profit for the year. C) Net sales. D) Expenses. Show Answer Correct Answer: A) Gross profit. 3. What will usually cause the liability account Accounts Payable to increase? A) Debit. B) Credit. Show Answer Correct Answer: B) Credit. 4. Financial statements report the fair market value of a company. A) True. B) False. Show Answer Correct Answer: B) False. 5. Capital account is A) Real Account. B) Nominal Account. C) Personal Account. D) Impersonal Account. Show Answer Correct Answer: C) Personal Account. 6. ..... describes a company's revenues and expenses along with the resulting net profit or loss over a period of time due to earnings activities. A) Revenue. B) Balance sheet. C) Income Statement. D) Statement of cash flows. Show Answer Correct Answer: C) Income Statement. 7. Income received in advance is shown in balance sheet as A) Current Assets. B) Current Liability. C) Intangible assets. D) Long term liability. Show Answer Correct Answer: A) Current Assets. 8. Assume that Horicon Corp. acquired 25% of the common stock of Sheboygan Corp. on January 1, 2017, for $ 300, 000. During 2017, Sheboygan Corp. reported net income of $ 160, 000 and paid total dividends of $ 60, 000. If Horicon uses the equity method to account for its investment, the balance in the investment account on December 31, 2017, will be: A) $ 300, 000. B) $ 325, 000. C) $ 400, 000. D) $ 340, 000. Show Answer Correct Answer: B) $ 325, 000. 9. The account that reflects interest accrued on business debts. A) Interest Payable. B) Liabilities. C) Note Payable. D) Expense. Show Answer Correct Answer: A) Interest Payable. 10. Which of the following elements of a manufacturing account matches the definition below:Fees that must be paid to other persons for the right to produce their products or to use their processes. A) Direct expenses. B) Royalties. C) Hire of specialist equipment. D) Prime cost. Show Answer Correct Answer: B) Royalties. 11. Allowance for Doubtful Accounts is classified as A) Asset. B) Current Asset. C) Against the Asset. D) Fixed Asset. Show Answer Correct Answer: C) Against the Asset. 12. The meaning of monetary unit assumption is ..... A) The company will have a long life. B) The company can divide its economic activities into artificial time periods. C) The common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis. D) Economic activity can be identified with a particular unit of accountability. Show Answer Correct Answer: C) The common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis. 13. The modern system of Accounting owes to A) AICPA. B) Luca pacioli. C) GAAP. D) None of these. Show Answer Correct Answer: C) GAAP. 14. The book of original entry A) Journal. B) Subsidiary book. C) Trial balance. D) Ledger. Show Answer Correct Answer: A) Journal. 15. Which assets are depreciated? A) Current assets. B) Variable assets. C) Fixed assets. D) Cash-back assets. Show Answer Correct Answer: C) Fixed assets. 16. A manufacturing account records the administrative expenses and the finance expenses of the business A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 17. Identify the type of expenditure. Cost of installing a new machine A) Capital. B) Revenue. Show Answer Correct Answer: A) Capital. 18. In accounting, everything is recorded in terms of money. A) Business Entity. B) Dual Aspect. C) Money Measurement. D) Periodicity Concept. Show Answer Correct Answer: C) Money Measurement. 19. The cost of a tape dispenser has been charged to an expense account although it will still be in use in 10 years time. Which accounting concept is being applied? A) Materiality concept. B) Prudence concept. C) Going concern concept. D) Accrual concept. Show Answer Correct Answer: A) Materiality concept. 20. Under hire purchase system the initial payment is known as A) First instalment. B) Down payment. C) Purchase price. D) Hire charges. Show Answer Correct Answer: B) Down payment. ← 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