This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. "Business transaction derived from business documents", this describe which process of accounting? A) Decision making. B) Identifying. C) Reporting. D) Auditing. Show Answer Correct Answer: B) Identifying. 2. A not-for-profit entity has all of the following characteristics except that it will A) Have positive fund balance. B) Not possess ownership interests like a corporation. C) Operate for purposes other than to provide goods or service. D) Receive significant contributions from providers who do not expect returns. Show Answer Correct Answer: A) Have positive fund balance. 3. The accountant's word to indicate that an entry will be recorded on the left-side of an account is ..... A) Debit. B) Credit. Show Answer Correct Answer: A) Debit. 4. Statement of affairs is prepared to A) Know about assets. B) Know about liabilities. C) Calculate capital. D) Know financial position. Show Answer Correct Answer: C) Calculate capital. 5. Audit of LLP is compulsory when ..... A) Contribution exceeds ₹ 25, 00, 000. B) Turnover exceeds ₹ 50, 00, 000. C) Turnover less than ₹ 20, 00, 000. D) Turnover less than ₹ 10, 00, 000. Show Answer Correct Answer: A) Contribution exceeds ₹ 25, 00, 000. 6. The money owed to a company for services rendered or goods purchased by customers on credit. A) Accounts Receivable. B) Accounts Payable. C) Loans. D) Service payable. Show Answer Correct Answer: A) Accounts Receivable. 7. ..... is the total of the direct materials, direct labour and direct expenses. It is the cost of the essentials necessary for production. A) Manufacturing account. B) Prime cost. C) Cost of production. D) Work in progress. Show Answer Correct Answer: B) Prime cost. 8. A check returned by the bank marked "NSF" means A) No service fee. B) Not satisfactorily filled-out. C) No signature found. D) Not sufficient funds. Show Answer Correct Answer: D) Not sufficient funds. 9. Which of the following departments does SEBI have? A) Commodity Derivatives Market Regulation Department (CDMRD). B) Human Resources Department (HRDM). C) Regional Offices (ROs). D) All of them. E) None of them. Show Answer Correct Answer: D) All of them. 10. Which inventory tracking method is more accurate? A) Periodic. B) LIFO. C) Perpetual. D) Average. Show Answer Correct Answer: C) Perpetual. 11. A list of assets, liabilities and owners equity of a business enterprise as of a specific date is A) Income statement. B) Cash flow statement. C) Balance sheet. D) Profit and loss account. Show Answer Correct Answer: C) Balance sheet. 12. Short-term debt investments must be readily marketable and expected to be sold within: A) 3 months from the date of purchase. B) The next year or operating cycle, whichever is shorter. C) The next year or operating cycle, whichever is longer. D) The operating cycle. Show Answer Correct Answer: C) The next year or operating cycle, whichever is longer. 13. The CPA firm auditing Mason Street Recording Studios found that total stockholders' equity was understated and liabilities were overstated. Which of the following errors could have been the cause? A) Making the adjustment entry for depreciation expense twice. B) Failure to record interest accrued on a note payable. C) Failure to make the adjusting entry to record revenue that had been earned but not yet billed to clients. D) Failure to record the earned portion of fees received in advance. Show Answer Correct Answer: C) Failure to make the adjusting entry to record revenue that had been earned but not yet billed to clients. 14. When cash is received, the account Cash will be A) Debited. B) Credited. Show Answer Correct Answer: A) Debited. 15. A person cannot act as an underwriter unless he holds a certificate granted by ..... A) RBI. B) SEBI. C) ROC. D) MCA. Show Answer Correct Answer: B) SEBI. 16. The differences between credit sales and installment sales are, except..... A) Difference in maturity period, if credit sales period is 30-60 days. B) Differences in repayment methods, if credit sales are paid immediately (not paid regularly). C) The difference in the agreement contract, if there is a promise of installment sales. D) Differences in ownership rights, if the installment sale of goods has become property rights. Show Answer Correct Answer: D) Differences in ownership rights, if the installment sale of goods has become property rights. 17. To have a debit, you must always have a credit A) True. B) False. Show Answer Correct Answer: A) True. 18. The Adequate Disclosure accounting concept is applied when financial statements contain all information necessary to understand a business's financial condition. A) True. B) False. Show Answer Correct Answer: A) True. 19. The cash account shows a balance of $ 85, 000 before reconciliation. The bank statement does not include a deposit of $ 5, 000 made on the last day of the month. The bank statement shows a collection by the bank of $ 2, 400 and a customer's check for $ 680 was returned because it was NSF. A customer's check for $ 900 was recorded on the books as $ 1, 080, and a check written for $ 138 was recorded as $ 183. The correct balance in the cash account was A) RM86, 540. B) RM86, 585. C) RM87, 400. D) RM95, 350. Show Answer Correct Answer: B) RM86, 585. 20. During January 2016, Ms. Nanaka borrowed RM4 million from Malaysia Bank. How would this affect Ms.Nanaka assets, liabilities and capital? A) Assets decrease, liabilities decrease and capital increase. B) Assets increase, liabilities increase and capital has no effect. Show Answer Correct Answer: B) Assets increase, liabilities increase and capital has no effect. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Accounting Quiz 1Financial Accounting Quiz 2Financial 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