This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 73 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 73 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A debit entry is required for which of the following transaction? A) Decrease in assets. B) Increase in Income. C) Decrease in Liability. D) Decrease in Expense. Show Answer Correct Answer: C) Decrease in Liability. 2. ..... fluctuation in economic activity that an economy experiences over a period of time. A business cycle is basically defined in terms of periods of expansion or recession. A) Business cycle. B) Business functions. C) Recession. D) None of above. Show Answer Correct Answer: A) Business cycle. 3. An event related to an investment in debt securities thatdoes not require a journal entry is: A) Acquisition of the debt investment. B) Receipt of interest revenue from the debt investment. C) A change in the name of the firm issuing the debt securities. D) Sale of the debt investment. Show Answer Correct Answer: C) A change in the name of the firm issuing the debt securities. 4. The income statement shows which of the following? A) Assets and liabilities. B) Income and expenses. C) Receipts and payments. D) None of above. Show Answer Correct Answer: B) Income and expenses. 5. Information needed to prepare a balance sheet's Assets section is obtained from a work sheet's Account Title column and: A) Income Statement Debit column. B) Income Statement Credit column. C) Balance Sheet Debit column. D) Balance Sheet Credit column. Show Answer Correct Answer: C) Balance Sheet Debit column. 6. Adjusting entries are made: A) At the beginning of the year. B) At the end of the year. C) During the year. D) All of these. Show Answer Correct Answer: B) At the end of the year. 7. What is "advance buyer" in English? A) Trade receivables. B) Trade payables. C) Prepayment from buyers. D) Prepayment for sellers. Show Answer Correct Answer: C) Prepayment from buyers. 8. ..... are accounts in which income and expenditure are recorded(a) (b) (c) (d) A) Real account. B) Cost account. C) Nominal account. D) Personal account. Show Answer Correct Answer: C) Nominal account. 9. The government agency that regulates securities (stocks and bonds), enforces accounting laws, and dictates financial reporting rules. A) Stocks and Exchange Commission (SEC). B) Securities and Exchange Commission (SEC). C) Securities and Exchange Company (SEC). D) Securities and Equity Commission (SEC). Show Answer Correct Answer: B) Securities and Exchange Commission (SEC). 10. Who is considered as the father of modern accounting A) Luca Friar Pacioli. B) J.betty. C) Henry Fayol. D) Gestonburg. Show Answer Correct Answer: A) Luca Friar Pacioli. 11. Accounting information is ..... to the extent that it is verifiable, it is a faithful representation and is reasonably free from error and bias. A) Reliable. B) Consistent. C) Understandable. D) Relevant. Show Answer Correct Answer: A) Reliable. 12. A business whose owners enjoy limited liability is a A) Sole proprietorship. B) Partnership. C) Proprietorship. D) Corporation. Show Answer Correct Answer: D) Corporation. 13. Assets of the business are Rs.3, 00, 000 and its Liabilities are Rs.1, 00, 000. Find its Capital A) 4, 00, 000. B) 2, 00, 000. C) 1, 00, 000. D) 3, 00, 000. Show Answer Correct Answer: B) 2, 00, 000. 14. What form of business does not allow one owner? A) Sole proprietorship. B) Partnership. C) Corporation. D) All of the above. Show Answer Correct Answer: B) Partnership. 15. UNDER THE REVISED CONCEPTUAL FRAMEWORK, WHICH OF THE FOLLOWING IS A CHARACTERISTIC OF ASSET? A) PRESENT ECONOMIC RESOURCE. B) ECONOMIC RESOURCE IS A RIGHT THAT HAS THE POTENTIAL TO PRODUCE ECONOMIC BENEFITS. C) ECONOMIC RESOURCE IS CONTROLLED BY THE ENTIY AS A RESULT OF PAST EVENTS. D) ALL OF THESE CHARACTERIZE AN ASSET. Show Answer Correct Answer: D) ALL OF THESE CHARACTERIZE AN ASSET. 16. Which statement is incorrect regarding the timing of application of PFRSs? A) PFRSs apply from a date specified in the document. B) New or revised PFRSs set out transitional provisions to be applied on their initial application. C) Until the effective date of a PFRS, the requirements of any PFRS that would be affected by proposals in an exposure draft remain in force. D) The FRSC has a general policy of exempting transactions occurring before a specific date from the requirements of new PFRSs. Show Answer Correct Answer: D) The FRSC has a general policy of exempting transactions occurring before a specific date from the requirements of new PFRSs. 17. Maximum amount of capital that a company is allowed to raise is called ..... A) Authorized or Registered Capital. B) Maximum Capital. C) Maximum or Altered Capital. D) Authorized or Altered Capital. Show Answer Correct Answer: A) Authorized or Registered Capital. 18. The overriding purpose of financial accounting is to summarize financial activity in business in the ..... A) Profit and loss statement. B) Balance sheet. C) Cash flow statement. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. The formula for calculating the total expenses ratio is total expenses divided by net income. A) True. B) False. Show Answer Correct Answer: B) False. 20. Business A has purchase of £10000, carriage outwards of £1000, carriage inwards of £2000 and purchase returns of 3000. What will be the purchase figure to be entered into the profit or loss statement. A) £9000. B) £8000. C) £10000. D) £7000. Show Answer Correct Answer: A) £9000. ← 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