This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Where is depreciation recorded A) Current asset. B) Current liability. C) Not a current asset. D) OE. Show Answer Correct Answer: C) Not a current asset. 2. An AllIn company purchases goods on credit. What are the two moving accounts A) Clients/stocks. B) Purchase of goods/operating suppliers. C) Achat marchandises/clients. D) Achat marchandises/banque. Show Answer Correct Answer: B) Purchase of goods/operating suppliers. 3. A debit to an asset account indicates A) An increase in the asset. B) An increase in liability. C) A credit was made to a liability account. D) A credit was made to a liability account. Show Answer Correct Answer: A) An increase in the asset. 4. The following figures have been taken from the accounts of a manufacturing organization:$ Cost of raw materials used 90 000Direct wages 50 000Indirect wages 30 000Direct expenses 40 000Indirect expenses 20 000 Which of the following figures represents the manufacturers' prime cost? A) $ 230 000. B) $ 180 000. C) $ 140 000. D) $ 90 000. Show Answer Correct Answer: B) $ 180 000. 5. The main purpose of cost Accounting is to ..... A) Maximize profits. B) Help in inventory. C) Provide information to management for decision making. D) Aid in the fixation of Selling price. Show Answer Correct Answer: C) Provide information to management for decision making. 6. Purchases returns is also known as ..... A) Sales returns. B) Return outwards. C) Returns inwards. D) Discount allowed. Show Answer Correct Answer: B) Return outwards. 7. Sale of finished goods will be recorded in A) Trading account debit side. B) Profit and loss account debit side. C) Profit and loss account credit side. D) Trading account credit side. Show Answer Correct Answer: D) Trading account credit side. 8. What is the difference between cash basis and accrual basis accounting? A) Cash basis accounting records transactions only when credit is exchanged, while accrual basis accounting records transactions when they occur, regardless of when the credit is exchanged. B) Cash basis accounting records transactions only when cash is exchanged, while accrual basis accounting records transactions when they occur, regardless of when the cash is exchanged. C) Cash basis accounting records transactions only when loans are exchanged, while accrual basis accounting records transactions when they occur, regardless of when the loans are exchanged. D) Cash basis accounting records transactions only when checks are exchanged, while accrual basis accounting records transactions when they occur, regardless of when the checks are exchanged. Show Answer Correct Answer: B) Cash basis accounting records transactions only when cash is exchanged, while accrual basis accounting records transactions when they occur, regardless of when the cash is exchanged. 9. N/30 A) 2 days for 10% discount, or total is due in 30 days. B) 2% discount in 10 days, or total is due in 30 days. C) $ 2 off in 10 days, or total is due in 30 days. D) None of the above. Show Answer Correct Answer: B) 2% discount in 10 days, or total is due in 30 days. 10. The process of bringing a zero balance to all temporary accounts by crediting debit balances and debiting credit balances and transferring those balances to the capital account. A) Closing the books. B) Trial Balance. C) Balancing the books. D) None of above. Show Answer Correct Answer: A) Closing the books. 11. Accounting Principles are, the Rules of Action or the Methods and Procedures of Accounting commonly adopted while recording Business transactions. A) True. B) False. C) Can't say. D) Situation based. Show Answer Correct Answer: A) True. 12. The ..... records daily transactions of a business in the order in which they occur A) Journal. B) Ledger. C) Account. D) Trial balance. Show Answer Correct Answer: A) Journal. 13. A written report which describes the financial health of a company. Examples include:balance sheet, income statement, statement of changes in owners equity A) Financial statement. B) Balance sheet. C) Audit. D) Budget. Show Answer Correct Answer: A) Financial statement. 14. Royalty account is A) Personal a/c. B) Real a/c. C) Nominal a/c. D) Capital a/c. Show Answer Correct Answer: C) Nominal a/c. 15. Under hire purchase the buyer has the option to return the goods A) True. B) False. Show Answer Correct Answer: A) True. 16. The ..... method of depreciation assumes that the non current asset is used EVENLY throughout its useful life A) Reducing Balance Method. B) Straight Line Method. C) Revaluations method. D) My own method. Show Answer Correct Answer: B) Straight Line Method. 17. Donations received for a special purpose will be taken to the A) Liability side of the balance sheet. B) Asset side of the balance sheet. C) Income and Expenditure account. D) Receipts and payments account. Show Answer Correct Answer: A) Liability side of the balance sheet. 18. Transportation costs are borne by the buyer A) FOB Shipping Point. B) FOB Destination Point. C) COD. D) None of above. Show Answer Correct Answer: A) FOB Shipping Point. 19. Sold goods to Sahil for cash 1800, in this transaction sahil's A/c will be A) Debited. B) Credited. C) Neither debited nor Credited. D) None of the above. Show Answer Correct Answer: C) Neither debited nor Credited. 20. The contract of insurance is a contract of guarantee. A) True. B) False. Show Answer Correct Answer: B) False. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Accounting Quiz 1Financial Accounting Quiz 3Financial Accounting Quiz 4Financial Accounting Quiz 5Financial Accounting Quiz 6Financial Accounting Quiz 7Financial Accounting Quiz 8Financial Accounting Quiz 9Financial Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books