This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 7 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Are paid by the consumer when buying most goods and services. A) Income Tax. B) Equity. C) Expenses. D) Sales Taxes. Show Answer Correct Answer: D) Sales Taxes. 2. Premium received on issue of shares is a revenue profit. A) True. B) False. Show Answer Correct Answer: B) False. 3. Which of the following is the form of business combination? A) Merger. B) Consolidation. C) Acquisition. D) All of the above. Show Answer Correct Answer: D) All of the above. 4. Manufacturing Account is prepared to calculate A) Cost of capital. B) Cost of sales. C) Cost of goods sold. D) Cost of production. Show Answer Correct Answer: D) Cost of production. 5. During 2016, Tor sold goods costing $ 1, 500 to its subsidiary, Rab, at a gross profit of 40%. Rab had $ 200 of these goods on hand at Dec 31, 2016. What is the journal entry to record purchases of goods at Rab in 2016? A) Dr. CoGS $ 1, 500Cr. Inventories $ 1, 500. B) Dr. Inventories 2, 500Cr. Cash in Bank 2, 500. C) Dr. Cash in Bank $ 2, 500Cr. Sales $ 2, 500. D) Dr. Inventories 1, 500Cr. Cash in Bank 1, 500. E) Inventories $ 2, 100. Show Answer Correct Answer: B) Dr. Inventories 2, 500Cr. Cash in Bank 2, 500. 6. In which business form is the profit taxed separately from the owners? A) Sole proprietorship. B) Partnership. C) Corporation. D) All of the above. Show Answer Correct Answer: C) Corporation. 7. The account format that displays debits, credits, balances, and headings. A) General journal. B) General ledger. C) T-account. D) Ledger account. Show Answer Correct Answer: C) T-account. 8. Identify the main problems faced by the textile industry. A) Erratic power supply. B) Old and obsolete machinery. C) Stiff competition from the synthetic fibre industry. D) All of these. Show Answer Correct Answer: D) All of these. 9. Which of the following is a change in accounting policy in accordance with IAS8 A) An entity changes the warranty provisions, based upon more up-to-date information about claims frequency and value. B) An entity previously depreciated vehicles using the reducing balance method at 40% pa. It now uses the straight-line method over a period of five years. C) An entity previously charged interest incurred in connection with the construction of tangible non-current assets to the statement of profit or loss. Following the revision of IAS23 Borrowing Cost, and in accordance with the revised requirements of that standard, it now capitalizes this interest. D) Reducing the value of inventory from cost to net relisable value due to a valid adjusting event after the reporting period. Show Answer Correct Answer: C) An entity previously charged interest incurred in connection with the construction of tangible non-current assets to the statement of profit or loss. Following the revision of IAS23 Borrowing Cost, and in accordance with the revised requirements of that standard, it now capitalizes this interest. 10. Original cost minus scrap value is the depreciated value of an asset. A) True. B) False. Show Answer Correct Answer: A) True. 11. Which of the following describes a trial balance? A) It is a special account. B) It is a list of balance in the books. C) It reveals the financial position of a business. D) It shows all the entries in the books of a business. Show Answer Correct Answer: B) It is a list of balance in the books. 12. In theory formulation, it is known as a deductive approach. The deductive approach is..... A) The use of basic assumptions and rules that will be used to draw logical conclusions from the problem being analyzed. B) The development of theory is directed from the abstraction of the unreal world that exists in the human mind. C) Relates to how accounting concepts and practices can influence a person's behavior. D) Making conclusions that come from generalizations or phenomena that are specific (specific). Show Answer Correct Answer: A) The use of basic assumptions and rules that will be used to draw logical conclusions from the problem being analyzed. 13. Trade Payable: A) Your business' cumulative financial holdings. B) How much you gained or lost on a business investment relative to how much you spent on it. C) How much you owe your suppliers for goods or services supplied to you. D) None of above. Show Answer Correct Answer: C) How much you owe your suppliers for goods or services supplied to you. 14. It guides how the expenses should be matched with revenue for determining exact profit or loss for a particular period. A) Accrual Concept. B) Matching Concept. C) Revenue Recognition Concept. D) Going Concern Concept. Show Answer Correct Answer: B) Matching Concept. 15. In case of sub division of share capital, the total number of shares- A) Increases. B) Decreases. C) Doesn't change. D) None of above. Show Answer Correct Answer: A) Increases. 16. A petty cash fund system where the amount of petty cash is set at a certain amount so that the replacement of petty cash does not need to be the same as the amount that has been used is a petty cash fund system..... A) Imprest fund system. B) Fluctuation fund system. C) Pettycash. D) Cash overage. Show Answer Correct Answer: B) Fluctuation fund system. 17. Which of the following account will be credited when a typewriter is sold that has been used in the office? A) Purchases Account. B) Sales Account. C) Office equipment Account. D) Stock Account. Show Answer Correct Answer: C) Office equipment Account. 18. Unearned revenue is reported in the financial statements as A) A liability on the balance sheet. B) An operating activity on the statement of cash flows. C) An unearned revenue on the income statement. D) An asset on the balance sheet. E) A revenue on the balance sheet. Show Answer Correct Answer: A) A liability on the balance sheet. 19. In petty cash book the credit side is for A) Creditors. B) Debtors. C) Analysis columns. D) Payment. Show Answer Correct Answer: C) Analysis columns. 20. Rani acquired 70% of Moly on 2, Jan 2018, and the acquisition was made at book value (no amortizations). During the current year, Moly reported net income of $ 5, 000 and paid dividends of $ 2, 000. During 2018, Moly sold goods to Rani for $ 1, 200 at a mark-up of 25% and Rani still had $ 500 on hand at the end of the year. What is the journal entry to record noncontrolling interest in sub's earnings and dividends? A) Dr. Noncontrolling interest share $ 1, 470Cr. Dividends $ 600Cr. Noncontrolling interest $ 870. B) Dr. Investment in Moly $ 1, 470Cr. Noncontrolling interest $ 1, 470. C) Dr. Investment in Moly $ 1, 500Cr. Noncontrolling interest $ 1, 500. D) Dr. Noncontrolling interest share $ 3, 500Cr. Dividends $ 1, 400Cr. Noncontrolling interest $ 2, 100. E) Dr. Noncontrolling interest $ 1, 500 Cr. Income from Moly $ 1, 500. Show Answer Correct Answer: A) Dr. Noncontrolling interest share $ 1, 470Cr. Dividends $ 600Cr. Noncontrolling interest $ 870. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Accounting Quiz 1Financial Accounting Quiz 2Financial Accounting Quiz 3Financial Accounting Quiz 4Financial Accounting Quiz 5Financial Accounting Quiz 6Financial Accounting Quiz 8Financial Accounting Quiz 9Financial Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books