This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 80 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 80 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Current Liability represents a potential obligation that could be created depending on the outcome of an event. A) True. B) False. Show Answer Correct Answer: B) False. 2. Unearned revenues are A) Cash received and a liability recorded before services are performed. B) Revenue for services performed and recorded as liabilities before they are received. C) Revenue for services performed but not yet received in cash or recorded. D) Revenue for services performed and already received in cash and recorded. Show Answer Correct Answer: A) Cash received and a liability recorded before services are performed. 3. Statement of Changes in Equity is the ..... between the opening balance and closing balance of shareholder's equity A) Balancing. B) Tallying. C) Reconciliation. D) Alteration. Show Answer Correct Answer: C) Reconciliation. 4. The account which is prepared to determine the gross profit or gross loss of a business A) Income Statement. B) Trading Account. C) Statement of Financial Position. D) Statement of Changes in Equity. Show Answer Correct Answer: B) Trading Account. 5. Bookkeeping primarily involves all part of the accounting process EXCEPT A) Recording. B) Interpreting. C) Summarizing. D) Classifying. Show Answer Correct Answer: B) Interpreting. 6. The art of recording the business transaction in a systematic and regular manner refers to A) Cost accounting. B) Financial accounting. C) Book keeping. D) Accounting. Show Answer Correct Answer: D) Accounting. 7. A sole trader has sold his private house but has not recorded anything about it in the business records. What accounting concept is being applied? A) Confidentiality. B) Historical cost. C) Business entity. D) Prudence. Show Answer Correct Answer: C) Business entity. 8. The correction of record of a transaction which either has not been recorded or has been recorded in incomplete or wrong way is called: A) Adjustments. B) Closing of Accounts. C) Trial Balance. D) Balance Sheet. Show Answer Correct Answer: A) Adjustments. 9. A manufacturing entity is entitled to a grant of $ 3 million for creating 50 jobs and maintaining them for three years. $ 1.5m is received when the jobs are created and the remaining $ 1.5m is receivable after three years, provided that the 50 jobs are still in existence. The entity creates 50 jobs at the beginning of year one and there is reasonable assurance that this level of employment will be maintained. What is the deferred income balance at the end of the first year? A) 2 million. B) 1.5 million. C) 0.5 million. D) Other. Show Answer Correct Answer: C) 0.5 million. 10. All information which is relevant to financial statement must be included in the financial statement A) Cost principle. B) Disclosure principle. C) Reliability principle. D) GAAP. Show Answer Correct Answer: B) Disclosure principle. 11. For the year ended 31 December 2018, the prime cost was $ 80 000, factory overheads totalled $ 120 000, work in progress 1 January 2018 was $ 20 000 and at 31 December 2018 was $ 30 000. What was the cost of production of finished goods? A) $ 190 000. B) $ 200 000. C) $ 210 000. D) $ 220 000. Show Answer Correct Answer: A) $ 190 000. 12. Which of the following are considered to be tangible fixed assets? A) Land. B) Building. C) Fixtures. D) All of the above. Show Answer Correct Answer: D) All of the above. 13. Which of the following best defines the double-entry system in accounting? A) A system that tracks revenue and expenses. B) A system that records financial transactions in two separate accounts. C) A system that calculates the balance sheet equation. D) 1. A system that reconciles bank statements with accounting records. Show Answer Correct Answer: B) A system that records financial transactions in two separate accounts. 14. The date on a monthly income statement prepared on April 30 is written as: A) April 30, 20 . B) For Month Ended April 30, 20 . C) 20 , April 30. D) None of these. Show Answer Correct Answer: B) For Month Ended April 30, 20 . 15. Which of the following bookkeeping terms refers to charges on the patient's account? A) Liabilities. B) Assets. C) Debits. D) Credits. Show Answer Correct Answer: C) Debits. 16. Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash. A) Liquidity ratios. B) Efficiency ratios. C) Leverage ratios. D) Profitability ratios. Show Answer Correct Answer: A) Liquidity ratios. 17. Bad Debts given only in Trial Balance will appear in A) Balance Sheet only. B) Profit and Loss Account only. C) Both Balance Sheet and Profit and Loss account. D) Trading Account. Show Answer Correct Answer: B) Profit and Loss Account only. 18. December 2020 interest income Rp. 100, 000, but will only receive it next month. The adjusting entry at the end of December 2020 is..... A) Interest Receivable (D); Interest Revenue (K) Rp. 110.000. B) Interest Receivable (D); Interest Revenue (K) Rp. 100.000. C) Interest Expense (D); Interest Payable (K) Rp. 100.000. D) Interest Receivable (D); Interest Payable (K) Rp. 110.000. Show Answer Correct Answer: B) Interest Receivable (D); Interest Revenue (K) Rp. 100.000. 19. Which of the following refers to a sole proprietorship business? A) Limited liability. B) Capital contributed solely by owner. C) Share profit or loss among partners. D) Income not subject to tax. Show Answer Correct Answer: B) Capital contributed solely by owner. 20. Current ratio is A) 4:1. B) 3:1. C) 2:1.1. D) 1:1. Show Answer Correct Answer: C) 2:1.1. ← 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