This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 33 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 33 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Limitations of Financial Accounting A) Does not consider human beings as an asset of the concern. B) Does not take into consideration non monetary transactions. C) Possible to draw them wrongly. D) All of the above. Show Answer Correct Answer: D) All of the above. 2. The cost of goods sold (COGS) is the accountant's term for the direct costs of thegoods thatareactually sold, e.g. raw material costs A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 3. Sam Ryo is the proprietor (owner) of Sam's, a retailer of golf apparel. When recording the financial transactions of Sam's, Sam does not record an entry for a car he purchased for personal use. Sam took out a personal loan to pay for the car. What accounting concept guides Sam's behavior in this situation? A) Monetary unit assumption. B) Cash basis concept. C) Economic entity assumption. D) Pay back concept. Show Answer Correct Answer: C) Economic entity assumption. 4. If I buy a machine from you under Higher Purchase System, I am called a ..... A) Purchaser. B) Higher Vendor. C) Higher customer. D) Higher Purchaser. Show Answer Correct Answer: D) Higher Purchaser. 5. What is the main objective of managerial accounting? A) To create internal reports for managers. B) To assist management in decision-making. C) To allocate resources within a business. D) To report on a business's financial health to external parties. Show Answer Correct Answer: B) To assist management in decision-making. 6. Which of the following statements about contingent assets and contingent liabilities are correct? 1-A contingent asset should be disclosed by note if an inflow of economic benefits is probable. 2-A contingent liability should be disclosed by note if it is probable that a transfer of economic benefits to settle it will be required, with no provision being made. 3-No disclosure is required for a contingent liability if it is not probable that a transfer of economic benefits to settle it will be required. 4-No disclosure is required for either a contingent liability or a contingent asset if the likelihood of a payment or receipt is remote. A) 1 and 4 only. B) 2 and 3 only. C) 2, 3 and 4. D) 1, 2 and 4. Show Answer Correct Answer: A) 1 and 4 only. 7. The act that repealed earlier ordinances and provide formal rules on accounting and requirement for true and fair view reporting. A) Financial Reporting Act 2016. B) Companies Act 1997. C) Financial Reporting Act 1997. D) Companies Act 2016. Show Answer Correct Answer: D) Companies Act 2016. 8. Amitav purchased a van costing $ 20 000. He provided an old van with a net book value of $ 8 000 in part exchange. There was a profit on disposal of $ 1 500.What was the cash outflow arising from the purchase? A) $ 9 500. B) $ 10 500. C) $ 12 000. D) $ 13 500. Show Answer Correct Answer: B) $ 10 500. 9. Purchasing an asset would be an example of A) Cash inflow. B) Cash outflow. Show Answer Correct Answer: B) Cash outflow. 10. Which one of the following industries uses limestone as a raw material? A) Aluminum. B) Cement. C) Sugar. D) Jute. Show Answer Correct Answer: B) Cement. 11. A financial ratio is a comparison between two components of financial information. A) True. B) False. Show Answer Correct Answer: A) True. 12. A person who woes money to the business is know as A) A debtor. B) A creditor. C) All of the above. D) None of this. Show Answer Correct Answer: A) A debtor. 13. Net profit formula is: A) =COGS = Opening stock + Purchases-Closing stock. B) =Gross profit-Expenses. Show Answer Correct Answer: B) =Gross profit-Expenses. 14. Describe the components of the statement of cash flows. A) Income activities, expense activities, and profit activities. B) Operating activities, investing activities, and financing activities. C) Sales activities, marketing activities, and production activities. D) Debt activities, equity activities, and asset activities. Show Answer Correct Answer: B) Operating activities, investing activities, and financing activities. 15. An asset account refers to money or financial obligations owed by the business. A) True. B) False. Show Answer Correct Answer: B) False. 16. Companies have ..... ? A) Unlimited liability. B) Limited liability. Show Answer Correct Answer: B) Limited liability. 17. Current Asset(s) A) Account Payable. B) Note Payable. C) Account Receivable. D) Furniture and Equipment. Show Answer Correct Answer: C) Account Receivable. 18. Owner's Contributions are the cash or assets removed from an event business A) True. B) False. Show Answer Correct Answer: B) False. 19. ALL OF THE FOLLOWING OCI ITEMS MAY NOT BE RECLASSIFIED TO PROFIT OR LOSS, EXCEPT: A) UNREALIZED LOSS ON DEBT INVESTMENT AT FVOCI. B) UNREALIZED LOSS ON EQUITY INVESTMENT AT FVOCI. C) REMEASUREMENT LOSS ON DEFINED BENEFITS PLANS. D) REVALUATION SURPLUS. Show Answer Correct Answer: A) UNREALIZED LOSS ON DEBT INVESTMENT AT FVOCI. 20. What is the importance of financial statements for investors? A) Financial statements only provide irrelevant information for investors. B) Investors do not rely on financial statements for making investment decisions. C) Financial statements have no impact on investors' decisions. D) Financial statements provide important information about the financial health and performance of a company, which helps investors make informed decisions about buying, holding, or selling stocks or bonds. Show Answer Correct Answer: D) Financial statements provide important information about the financial health and performance of a company, which helps investors make informed decisions about buying, holding, or selling stocks or bonds. ← 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