This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 85 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 85 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. We have been told that we cannot show our asset of motor car at cost in one year and market value in the next year. What accounting concept is being applied? A) Consistency. B) Going concern. C) Historical cost. D) Prudence. Show Answer Correct Answer: A) Consistency. 2. At the time of bringing capital in the business, cash account is ..... A) Credited. B) Debited. C) Neither credited nor debited. D) None of the above. Show Answer Correct Answer: B) Debited. 3. What are the four main financial statements? A) Profit and loss statement, income tax statement, cash flow statement, equity statement. B) Tax statement, income summary, cash flow report, equity statement. C) Budget statement, expense report, revenue summary, profit and loss statement. D) Income statement, balance sheet, statement of cash flows, and statement of changes in equity. Show Answer Correct Answer: D) Income statement, balance sheet, statement of cash flows, and statement of changes in equity. 4. FOB shipping point means ..... A) Buyer pays freight cost. B) Seller pays freight cost. C) Buyer and seller didn't pay anything. D) Seller pays buyer. Show Answer Correct Answer: A) Buyer pays freight cost. 5. Prepaid expenses are A) Paid and recorded in an asset account before they are used or consumed. B) Paid and recorded in an asset account after they are used or consumed. C) Incurred but not yet paid or recorded. D) Incurred and already paid or recorded. Show Answer Correct Answer: A) Paid and recorded in an asset account before they are used or consumed. 6. Money invested in a business by an owner is called ..... A) Merchandise. B) Capital. Show Answer Correct Answer: B) Capital. 7. One of the objectives achieved by providing depreciation is saving cash resources for future replacement of assets. A) True. B) False. Show Answer Correct Answer: A) True. 8. For a public limited company, the maximum number of members are kept as ..... A) Limited. B) Unlimited. C) All of the Above. D) None of the Above. Show Answer Correct Answer: B) Unlimited. 9. The operating profit margin ratio is calculated by dividing operating profit by: A) Total assets. B) Total revenue. Show Answer Correct Answer: B) Total revenue. 10. Normal loss of goods sent on consignment is shown in Consignment Account. A) True. B) False. Show Answer Correct Answer: B) False. 11. What is the depreciation expense for plant and machinery? A) £12, 000. B) £8, 000. C) £10, 000. D) £15, 000. Show Answer Correct Answer: A) £12, 000. 12. Depreciation is an actual loss. A) True. B) False. Show Answer Correct Answer: B) False. 13. A person whom the firm owes money on account of credit purchase A) Trade receivable. B) Trade payable. C) Seller. D) Customer. Show Answer Correct Answer: B) Trade payable. 14. The time value of money is based on: A) Interest and market value. B) Interest and time. C) Market value and time. D) Future interest rates. Show Answer Correct Answer: B) Interest and time. 15. Assumes that every transaction affects two accounts in a set of financial statements. A) Duality Concept. B) Separate Entity Concept. C) Accrual Concept. D) Matching Concept. Show Answer Correct Answer: A) Duality Concept. 16. Return inward appearing in trial balance are adjusted from A) Purchase A/c. B) Sales A/c. C) Return Outward A/c. D) Capital A/c. Show Answer Correct Answer: B) Sales A/c. 17. Information needed to prepare an income statement's Expense 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: A) Income Statement Debit column. 18. The John Marketing Company provides advertising services to an investment company in year A but receives advertising fee in year B. The John Marketing Company recognizes this revenue in year A. This action of John Marketing Company is justified by A) Business entity concept. B) Revenue recognition principle. C) Economic entity concept. D) Going concern concept. Show Answer Correct Answer: B) Revenue recognition principle. 19. Special identifications that are protected against infringement. A) Trademark. B) Goodwill. C) Patents. D) Copyrights. Show Answer Correct Answer: A) Trademark. 20. A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses. A) Accrual. B) Going Concern. C) Matching. D) Separate Entity. Show Answer Correct Answer: C) Matching. ← 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