This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 55 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 55 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A list of all accounts used by a company, including the identification number assigned to each account, is called a: A) Ledger. B) Journal. C) Trial balance. D) Chart of accounts. E) General Journal. Show Answer Correct Answer: D) Chart of accounts. 2. Goodwill is a fictitious asset. A) True. B) False. Show Answer Correct Answer: B) False. 3. To which sector does the textile industry belong to? A) Agro-based. B) Mineral based. C) Chemical based. D) None of these. Show Answer Correct Answer: A) Agro-based. 4. Which statement is true about liquidity? Prepaid rent is A) Less liquid than rent revenue. B) Less liquid than land. C) Less liquid than inventories. D) More liquid than inventories. E) More liquid than cash. Show Answer Correct Answer: C) Less liquid than inventories. 5. Rent paid to landlord is Debited to A) Landlord's a/c. B) Bad debts a/c. C) Rent a/c. D) Cash a/c. Show Answer Correct Answer: C) Rent a/c. 6. Rent paid is related to: A) Personal account. B) Real account. C) Nominal account. D) None of above. Show Answer Correct Answer: C) Nominal account. 7. The trading account is the first section of the P&L account and shows the difference between a firm's sales revenue (the valueof products sold to customers) and its costs of producing or purchasing those products to sell. Hence, the trading accountshows the gross profit of a firm. A) No. B) Yes. Show Answer Correct Answer: B) Yes. 8. Alfredo received his bank statement which showed a balance of $ 937 overdrawn. This did not agree with his cash book.On investigation he noted the following.Bank charges of $ 76 had not been entered in the cash book.There was an unpresented cheque paid to suppliers of $ 214.Alfredo had recorded $ 35 cash paid into his bank account, but this was not showing on the statement.At which value was the bank overdraft shown in the statement of financial position? A) $ 758. B) $ 937. C) $ 1116. D) $ 1192. Show Answer Correct Answer: C) $ 1116. 9. Accounting standard setting process began with formation IASC in London in A) 1972. B) 1973. C) 1974. D) 1975. Show Answer Correct Answer: B) 1973. 10. While putting the value or price of an entity in financial records the lowest price is recorded not the current price or current market value. This is known as A) Business Entity Concept. B) Conservatism. C) Expenditure Concept. D) Money Measurement Concept. Show Answer Correct Answer: B) Conservatism. 11. Describe the process of preparing a balance sheet. A) Compile all assets, liabilities, and equity of a company at a specific point in time. B) Summarize the cash flow of a company for a specific period of time. C) Calculate the total profit of a company by subtracting expenses from revenues. D) List all the expenses and revenues of a company over a specific period of time. Show Answer Correct Answer: A) Compile all assets, liabilities, and equity of a company at a specific point in time. 12. Which of the following is used to report data needed to meet legal and regulatory requirements? A) Assets. B) Equity. C) Tangible document. D) Financial statement. E) None of the above. Show Answer Correct Answer: D) Financial statement. 13. What are assets? A) What a company owns; anything of value owned by a business. B) Costs of operating a business. C) Detailed plans for the financial needs of individuals, families, and businesses. D) Differences between actual and budgeted performance. Show Answer Correct Answer: A) What a company owns; anything of value owned by a business. 14. Marketable securities bought and held primarily for salein the near term are classified as: A) Available-for-sale securities. B) Held-to-maturity securities. C) Stock securities. D) Trading securities. Show Answer Correct Answer: D) Trading securities. 15. Credits will increase equity balances A) True. B) False. Show Answer Correct Answer: A) True. 16. Profit and loss a/c starts with A) Net profit. B) Gross profit. C) Gross loss. D) Net loss. Show Answer Correct Answer: B) Gross profit. 17. All membership collected by a non trading concern must be entered in the assets side of the balance sheet A) True. B) False. Show Answer Correct Answer: B) False. 18. Each instalment including down payment is treated as hire charges by the A) Buyer. B) Seller. C) None of these. D) None of above. Show Answer Correct Answer: B) Seller. 19. The amount of money that an asset on the balance sheet is officially worth based on its age, style, and condition. A) Book value. B) Net worth. C) Purchase value. D) None of above. Show Answer Correct Answer: A) Book value. 20. Trade discount received on purchases is recorded in the books of account as follows: A) Trade discount is credited to discount received account. B) Trade discount is deducted from the invoice price and recorded at net value. C) None of the above. D) Any of (a) and (b). Show Answer Correct Answer: B) Trade discount is deducted from the invoice price and recorded at net value. ← 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