This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 19 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Tee Co. recorded the sale of P6, 000. If the sale was subject to a 20% trade discount and credit terms of 5/10, n/60, the list price was ..... A) P 4, 500. B) P 4, 800. C) P 7, 500. D) P 7, 700. Show Answer Correct Answer: C) P 7, 500. 2. Royalty paid on sales is debited to the profit and loss a/c A) True. B) False. Show Answer Correct Answer: A) True. 3. Meaning of double entry system A) Two entries in one book. B) Two entries in one account. C) Entries in both sides of one transaction. D) Entries in two personal accounts. Show Answer Correct Answer: C) Entries in both sides of one transaction. 4. Which book of original entry records the goods sold which are returned by the customers? A) Sales Returns Daybook. B) Purchases Daybook. C) Sales Daybook. D) Purchases Returns Daybook. Show Answer Correct Answer: A) Sales Returns Daybook. 5. A corporation exercises control over an affiliate in which it holds a 25 percent common stock interest. If its affiliate completed a fiscal year profitably but paid no dividends, how would this affect the investor? A) Result in an increased current ratio. B) Result in increased earnings per share. C) Increase several turnover ratios. D) Decrease book value per share. Show Answer Correct Answer: B) Result in increased earnings per share. 6. Carriage inwards should be apportioned on the basis of A) Sales ratio. B) Purchase ratio. C) GP ratio. D) Liquidity Ratio. Show Answer Correct Answer: B) Purchase ratio. 7. The area of accounting that focuses on reporting information to internal users is called managerial accounting. A) True. B) False. Show Answer Correct Answer: A) True. 8. If Assets amounts to $ 1 500 and Liabilities amounts to $ 600, what is the amount for Capital? A) $ 800. B) $ 850. C) $ 900. D) $ 2 100. Show Answer Correct Answer: C) $ 900. 9. Which is the best example of internal controls to ensure accurate financial records? A) Hiring more employees. B) Reconciling bank statements. C) Hiring external auditors. D) Duplicating records. Show Answer Correct Answer: B) Reconciling bank statements. 10. Partnership Act A) 1956. B) 1932. C) 1972. D) 1883. Show Answer Correct Answer: B) 1932. 11. Which of the following items are fundamental qualitative characteristics of financial information A) Going concern and accrual accounting. B) Relevance and faithful representation. C) Materiality and cost benefits. D) Assets and liabilities. Show Answer Correct Answer: B) Relevance and faithful representation. 12. Expenses prepaid for future financial period-subtracted from expense in Income Statement and treated as a current asset in the Statement of Financial position A) Other Payables. B) Other Receivables. Show Answer Correct Answer: B) Other Receivables. 13. A strategy where a company tries to design and produce products or services that serve unique market needs, allowing it to charge premium prices, such as BMW or Nike is using which business strategy? A) Low cost strategy. B) Premium Price strategy. C) Operating strategy. D) Accounting strategy. Show Answer Correct Answer: B) Premium Price strategy. 14. Income for which money has been received but has not been recognized as income in the relevant period is called..... A) Accrued revenue. B) Accrued expense. C) Unearned revenue. D) Prepaid expense. E) Operating expense. Show Answer Correct Answer: C) Unearned revenue. 15. Interest on Capital is ..... to Capital A) Added. B) Deducted. C) No effect. D) None. Show Answer Correct Answer: A) Added. 16. The ownership of goods under hire purchase agreement belongs to the A) Seller. B) Purchaser. C) Seller and purchaser. D) Purchaser and financial institutions. Show Answer Correct Answer: A) Seller. 17. According to IAS 2 Inventories, which of the following costs should be included in valuing the inventories of a manufacturing entity?(1) Carriage inwards(2) Carriage outwards(3) Depreciation of factory plant(4) General administrative overheads A) All four items. B) (1), (2) and (4) only. C) (2) and (3) only. D) (1) and (3) only. Show Answer Correct Answer: D) (1) and (3) only. 18. Which of the following accounts has a debit balance A) Contributions. B) Unearned Revenue. C) Service Revenue. D) Accounts Receivable. Show Answer Correct Answer: D) Accounts Receivable. 19. Lease is an agreement between lessor and lessee for A) Maintenance. B) Rent. C) Concession. D) Down payment. Show Answer Correct Answer: B) Rent. 20. The following is a statement showing the financial status of the company at any given time. A) Trading Account. B) Profit and Loss Account. C) Balance Sheet. D) Cash Book. Show Answer Correct Answer: C) Balance Sheet. ← 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