This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 27 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 27 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Amounts owing by the business to its creditors. A) Trade Receivables. B) Trade Payables. C) Loan from Bank. D) Owner's Equity. Show Answer Correct Answer: B) Trade Payables. 2. The financial statement which is an expression of the account equation is the A) Trading account. B) Profit and loss account. C) Balance sheet. D) Statement of casg flow. Show Answer Correct Answer: C) Balance sheet. 3. The purpose of this convention is to communicate all material and relevant facts concerning financial position and results of operations to the users. A) Convention of Materiality. B) Convention of Full Disclosure. C) Convention of Consistency. D) Convention of Conservatism. Show Answer Correct Answer: B) Convention of Full Disclosure. 4. If revenue expenditure transaction is mistakenly classified as capital expenditure, what is the effect on the following items in financial statement? A) Net profit will be reduced. B) Net profit will increase. C) There will be no effect on net profit. D) None of above. Show Answer Correct Answer: B) Net profit will increase. 5. What occurs when a customer has withdrawn more funds than were actually in the banking account resulting in the customer owing money to the bank? A) Credit balance. B) Overdraft. C) Levies. D) Transactions. Show Answer Correct Answer: B) Overdraft. 6. A trader made four transactions.1 paid for repairs to manufacturing equipment2 purchased an item to be used by the business for more than 12 months3 took goods for resale for his own use4 transferred his own vehicle to the businessWhich items are capital expenditure? A) 1 and 2. B) 2 and 3. C) 2 only. D) 3 and 4. Show Answer Correct Answer: C) 2 only. 7. The amount paid at the time of entering the Hire-purchase transaction for the goods purchased is known as A) Cash price. B) Down payment. C) First Instalment. D) Hire purchase price. Show Answer Correct Answer: B) Down payment. 8. Using the Specific Identification inventory system we use the sales records to identify the following:Aug. 14 Sold 8 bikes costing $ 91 each and 12 bikes costing $ 106 each.Aug. 30 Sold 2 bikes costing $ 91 each, 3 bikes costing $ 106 each, 15 bikes costing $ 115 each, and 3 bikes costing $ 119 each.Total cost of 55 units available for sale is $ 5, 990.Calculate cost of the ending inventory. A) $ 2, 490. B) $ 1, 408. C) $ 2, 408. D) $ 1, 308. Show Answer Correct Answer: B) $ 1, 408. 9. State whether each of the following is True or FalseIn a Common size statement each item is expressed as a percentage of some common base. A) True. B) False. Show Answer Correct Answer: A) True. 10. Statement of Financial Position: A) When your total expenses exceed your overall revenues. B) A financial document that provides a snapshot of business assets, liabilities and owner's equity. C) The movement of money in and out of your business. D) None of above. Show Answer Correct Answer: B) A financial document that provides a snapshot of business assets, liabilities and owner's equity. 11. The process of converting raw materials into finished goods that are produced on a large scale called: A) Information technology. B) Electronic industry. C) Manufacturing. D) Factory. Show Answer Correct Answer: C) Manufacturing. 12. Limit of Maximum Number of Partners is Fixed by A) Partnership Act 1932. B) Agreement Act 2000. C) Companies Act 2013. D) Companies Act 1956. Show Answer Correct Answer: C) Companies Act 2013. 13. Information users for financial accounting comprise of both internal (management, shareholders, employees etc) and external (creditors, suppliers, banks, tax authorities). A) True. B) False. Show Answer Correct Answer: A) True. 14. When Allotment money is received, the entry will be ..... A) Debit:Share Capital Credit:Share Allotment Account. B) Debit:Share Allotment Account Credit:Share Capital. C) Debit:Cash Account Credit:Share Allotment Account. D) Debit:Share Allotment Credit:Cash Account. Show Answer Correct Answer: C) Debit:Cash Account Credit:Share Allotment Account. 15. How many accounts, at a minimum, are required for accounting entries? A) 1. B) 2. C) 3. D) 4. Show Answer Correct Answer: B) 2. 16. Manufacturing Account does not include A) Direct and Indirect cost. B) Prime and Factory Overhead cost. C) Administrative & Selling cost. D) Direct & Indirect cost. Show Answer Correct Answer: C) Administrative & Selling cost. 17. When a company repurchases its own stock it is referred to as: A) Preferred stock. B) Common stock. C) Treasury stock. D) Retained earnings. Show Answer Correct Answer: C) Treasury stock. 18. This type of accounting is used for decision making A) Financial Accounting. B) Management Accounting. Show Answer Correct Answer: B) Management Accounting. 19. To form an incorporated public company, a group of ..... persons should subscribe their names to the Memorandum of Association. A) 14. B) 10. C) 7. D) 6. Show Answer Correct Answer: C) 7. 20. Net profit is the surplus, if any, from sales revenues after all expenses are accounted for. A) False. B) True. Show Answer Correct Answer: B) True. ← 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