This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 43 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 43 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How do financial statements help stakeholders make decisions? A) By creating confusion and uncertainty. B) By providing important financial information for decision-making. C) By providing irrelevant information. D) By causing delays and inefficiencies. Show Answer Correct Answer: B) By providing important financial information for decision-making. 2. A record of all accounts used by a business is called a: A) Journal. B) Book of original entry. C) General Journal. D) Trial balance. E) Ledger. Show Answer Correct Answer: E) Ledger. 3. Which is not a benefit of financial accounting?A. Maintaining systematic recordsB. Protecting and safeguarding business assetsC. Historical in natureD. Facilitates rational decision making A) Maintaining systematic records. B) Protecting and safeguarding business assets. C) Historical in nature. D) Facilitates rational decision making. Show Answer Correct Answer: C) Historical in nature. 4. What are the key differences between cash basis accounting and accrual basis accounting? A) Cash basis records transactions when credit is exchanged, while accrual basis records transactions when they occur. B) Cash basis records transactions when cash is exchanged, while accrual basis records transactions when they occur. C) Cash basis records transactions when invoices are exchanged, while accrual basis records transactions when they occur. D) Cash basis records transactions when checks are exchanged, while accrual basis records transactions when they occur. Show Answer Correct Answer: B) Cash basis records transactions when cash is exchanged, while accrual basis records transactions when they occur. 5. Land is an example of A) Current asset. B) Tangible asset. C) Intangible asset. D) None of above. Show Answer Correct Answer: B) Tangible asset. 6. Which is not an asset in the balance sheet of a bank? A) Investments. B) Loans. C) Cash & Balance with RBIRBI. D) Deposits. Show Answer Correct Answer: D) Deposits. 7. In a business combination, which of the following will occur? A) All identifiable assets and liabilities are recorded at fair value at the date of acquisition. B) All identifiable assets and liabilities are recorded at book value at the date of acquisition. C) Goodwill is recorded if the fair value of the net assets acquired exceeds the book value of the net assets acquired. D) None of the above is correct. Show Answer Correct Answer: A) All identifiable assets and liabilities are recorded at fair value at the date of acquisition. 8. Double entries of:an owner investing cash into the business and bank in the money to the bank A) Dr. OwnerCr. Bank. B) Dr. BankCr. Owner. C) Dr. CashCr. Capital. D) Dr. BankCr. Capital. Show Answer Correct Answer: D) Dr. BankCr. Capital. 9. What type of error is 'the original figure may be incorrectly entered although the correct double-entry principle has been observed using incorrect figure'. A) Errors of omission. B) Errors of commission. C) Errors of original entry. D) Compensating errors. Show Answer Correct Answer: C) Errors of original entry. 10. Bought goods worth $ 4000 on credit from Ben. What is the double entry to record this transaction? A) Debit Purchases and Credit Cash. B) Debit Cash and Credit Purchases. C) Debit Ben and Credit Purchases. D) Debit Purchases and Credit Ben. Show Answer Correct Answer: D) Debit Purchases and Credit Ben. 11. When the concept of ratio is defined in respected to the items shown in the financial statements, it is termed as A) Accounting ratio. B) Financial ratio. C) Costing ratio. D) None of the above. Show Answer Correct Answer: A) Accounting ratio. 12. An expenditure that generates economic benefits over more than one period is called..... A) Capital Expenditures. B) Revenue Expenditures. C) Maintenance. D) Replacement. Show Answer Correct Answer: A) Capital Expenditures. 13. Accounting Equation? A) Asset + Liability = Equity. B) Asset = Equity + Liability. C) Asset + Equity = Liability. D) None of above. Show Answer Correct Answer: B) Asset = Equity + Liability. 14. Motor van, building, furniture are examples of ..... A) Liabilities. B) Capital. C) Assets. D) Equity. Show Answer Correct Answer: C) Assets. 15. Cash and other assets expected to be exchanged for cash or consumed within a year. A) Loss on plant asset. B) Current asset. C) Gain on plant asset. D) Modified half-year convention. Show Answer Correct Answer: B) Current asset. 16. Furniture and Fixtures is classified as A) Current Asset. B) Current Liability. C) Noncurrent Asset. D) Noncurrent Liability. Show Answer Correct Answer: C) Noncurrent Asset. 17. What are the different types of financial ratios used in financial accounting analysis? A) Cash ratios, credit ratios, investment ratios, and debt ratios. B) Liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios. C) Growth ratios, stability ratios, risk ratios, and return ratios. D) Income ratios, expense ratios, asset ratios, and liability ratios. Show Answer Correct Answer: B) Liquidity ratios, profitability ratios, solvency ratios, and efficiency ratios. 18. Financial records keeping were believed to have begun at about ..... years BC A) 4000. B) 150. C) 400. D) 2400. Show Answer Correct Answer: A) 4000. 19. Assets =?, Liabilities = $ 5, 000, Owner's Equity = $ 24, 000 A) $ 24, 000. B) $ 29, 000. C) $ 5, 000. D) $ 28, 000. Show Answer Correct Answer: B) $ 29, 000. 20. Which of the following is NOT one of the three main categories in the statement of cash flows? A) Operating activities. B) Investing activities. C) Financing activities. D) Administrative activities. Show Answer Correct Answer: D) Administrative activities. ← 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