This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 28 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. At December 31, 2017, the fair value of available-forsale securities is $ 41, 300 and the cost is $ 39, 800. At January 1, 2017, there was a credit balance of $ 900 in the Fair Value Adjustment-Available-for-Sale account. The required adjusting entry would be: A) Debit Fair Value Adjustment-Available-for-Sale for $ 1, 500 and credit Unrealized Gain or Loss-Equity for $ 1, 500. B) Debit Fair Value Adjustment-Available-for-Sale for $ 600 and credit Unrealized Gain or Loss-Equity for $ 600. C) Debit Fair Value Adjustment-Available-for-Sale for $ 2, 400 and credit Unrealized Gain or Loss-Equity for $ 2, 400. D) Debit Unrealized Gain or Loss-Equity for $ 2, 400 and credit Fair Value Adjustment-Available-forSale for $ 2, 400. Show Answer Correct Answer: C) Debit Fair Value Adjustment-Available-for-Sale for $ 2, 400 and credit Unrealized Gain or Loss-Equity for $ 2, 400. 2. Costs incurred or the using up of assets as a result of the main operations of a business are called: A) Liabilities. B) Equity. C) Revenues. D) Expenses. E) Net losses. Show Answer Correct Answer: D) Expenses. 3. Which is the correct definition of a provision? A) A possible obligation arising from past event. B) A liability of uncertain timing or amount. C) A liability which cannot be easily measured. D) An obligation to transfer funds to an entity. Show Answer Correct Answer: B) A liability of uncertain timing or amount. 4. Where is the fare received from an incomplete journey shown as Voyage-in-Progress? A) Debit side of voyage account. B) On credit side of voyage account. C) Debit side of profit loss account. D) In the credit side of profit and loss account. Show Answer Correct Answer: A) Debit side of voyage account. 5. Calculate the income tax for the year 2021. (Question 2) A) 1054000 x 68/32 = 604000. B) 1054000 x 32/68 = 604000. C) 1054000 x 68/32 = 496000. D) 1054000 x 32/68 = 496000. Show Answer Correct Answer: D) 1054000 x 32/68 = 496000. 6. Which process explains that financial statements are analysed and the results of the analysis are used as a guidance to make decision? A) Summarizing. B) Interpreting. C) Recording. D) Classifying. Show Answer Correct Answer: B) Interpreting. 7. On June 1, 2020, Susi acquires 100% of Kiki for $ 80, 000. On this date, Kiki had assets of $ 50, 000. Assume the book value and fair value of Kiki's net assets were equal at the acquisition date. What is the record at Kiki when acquired by Susi? A) Dr. Cash in Bank $ 50, 000Cr. Investment in Susi $ 50, 000. B) Dr. Investment in Susi $ 80, 000Cr. Cash in Bank $ 80, 000. C) Dr. Capital Stock $ 50, 000Cr. Cash in Bank $ 50, 000. D) Dr. Cash in Bank $ 80, 000Cr. Capital Stock $ 80, 000. E) Dr. Cash in Bank $ 50, 000Cr. Capital Stock $ 50, 000. Show Answer Correct Answer: D) Dr. Cash in Bank $ 80, 000Cr. Capital Stock $ 80, 000. 8. The Unrealised profit in Closing stock is transferred to Which Account? A) Credit Side of General Profit and Loss Account. B) Debit Side of General Profit and Loss Account. C) Liability Side of Balance Sheet. D) Assets Side of Balance Sheet. Show Answer Correct Answer: B) Debit Side of General Profit and Loss Account. 9. Which of the following is already recorded in the Cash at Bank account but not in the Bank Statement? A) Bank charges. B) Dishonoured cheque. C) Uncredited cheque. D) Direct deposit. Show Answer Correct Answer: C) Uncredited cheque. 10. The accounting process is used to analyze and record transactions in a hospitality operation. A) True. B) False. Show Answer Correct Answer: A) True. 11. ALL OF THE FOLLOWING ARE COMPONENTS OF INCOME OR LOSS FROM CONTINUING OPERATIONS, EXCEPT: A) REVENUE FROM THE SALE OF MERCHANDISE. B) INTEREST INCOME. C) IMPAIRMENT LOSS OF ASSETS OF A MAJOR DIVISION CLASSIFIED AS HELD FOR SALE. D) UNREALIZED LOSS ON TRADING INVESTMENT. Show Answer Correct Answer: C) IMPAIRMENT LOSS OF ASSETS OF A MAJOR DIVISION CLASSIFIED AS HELD FOR SALE. 12. Accounting used by business and non business class both A) True. B) False. C) Can't say. D) None of above. Show Answer Correct Answer: A) True. 13. Huge advertising expenses are incurred to introduce a new product in the market, it is A) A capital expenditure. B) A revenue expenditure. C) A deferred revenue expenditure. D) None of the above. Show Answer Correct Answer: C) A deferred revenue expenditure. 14. The items raw materials inventory, work-in-progress inventory and finished goods inventory are MOST likely seen together on the balance sheet of a A) Garage. B) Supermarket. C) Shoe factory. D) Bus company. Show Answer Correct Answer: C) Shoe factory. 15. A control account is A) An imprest system. B) A statement of affairs. C) A bank reconciliation statement. D) A self balancing ledger system. Show Answer Correct Answer: D) A self balancing ledger system. 16. Cash used to finance relatively small and inefficient expenses using checks is the definition of..... A) Cash on hand. B) Cash. C) Petty cash. D) Cheque. Show Answer Correct Answer: C) Petty cash. 17. John Keneth's Barber Shop started the year with total assets of $ 60, 000 and total liabilities of $ 40, 000. During the year the business recorded $ 100, 000 in car repair revenues, $ 55, 000 in expenses, and dividends of $ 10, 000. The net income reported by John Keneth's Barber Shop for the year was ..... A) $ 45, 000. B) $ 100, 000. C) $ 90, 000. D) $ 35, 000. Show Answer Correct Answer: A) $ 45, 000. 18. All properties and services acquired by the business must be recorded at their original acquisition cost. This principle pertains to ..... A) Historical Principle. B) Business Entity. C) Accrual Principle. D) Objectivity principle. Show Answer Correct Answer: A) Historical Principle. 19. A public limited company is allowed to start business after receipt of A) CoC. B) CoI. C) LoC. D) None of above. Show Answer Correct Answer: A) CoC. 20. This type of accounting is used to control the costs of the business A) Financial Accounting. B) Management Accounting. Show Answer Correct Answer: B) Management Accounting. ← 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