This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 88 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 88 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. On June 1, 2019, Pet Company acquired 100% of Sor Inc. for $ 150, 000. On this date, Sor had the fair values of assets and liabilities $ 180, 000 and $ 30, 000, respectively, while retained earnings of $ 70, 000. What is the record by Pet when acquiring Sor? A) Dr. Investment in Sor $ 180, 000Cr. Gain on bargain purchase $ 30, 000Cr. Cash in bank $ 150, 000. B) Dr. Investment in Sor $ 150, 000Cr. Gain on bargain purchase $ 80, 000Cr. Cash in bank $ 70, 000. C) Dr. Investment in Sor $ 180, 000Cr. Cash in bank $ 180, 000. D) Dr. Investment in Sorrell $ 70, 000Cr. Cash in bank $ 70, 000. E) Dr. Investment in Sor $ 150, 000Cr. Cash in bank $ 150, 000. Show Answer Correct Answer: E) Dr. Investment in Sor $ 150, 000Cr. Cash in bank $ 150, 000. 2. During 2017, Susi sold goods costing $ 1, 500 to its subsidiary, Kiki, at a gross profit of 25%. Kiki had none of this inventory on hand at the end of 2017. What is the elimination worksheet entry to eliminate intercompany sales? A) Dr. CoGS $ 1, 500Cr. Inventories $ 1, 500. B) Dr. Sales $ 2, 000Cr. CoGS $ 2, 000. C) Dr. CoGS $ 2, 000Cr. Sales $ 2, 000. D) Dr. CoGS $ 1, 500Cr. Inventories $ 1, 500. E) Dr. Sales $ 2, 000Cr. Cash in Bank $ 2, 000. Show Answer Correct Answer: B) Dr. Sales $ 2, 000Cr. CoGS $ 2, 000. 3. We have shown all items of machinery costing less than $ 100 as machinery operating expenses. What accounting concept is being applied? A) Materiality. B) Going concern. C) Prudence. D) Historical cost. Show Answer Correct Answer: A) Materiality. 4. Main objective of analysis of financial statements is A) To know the financial strength. B) To make a comparative study with other firms. C) To know the efficiency of management. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 5. In the accounts of a manufacturing firm, 'production cost' equals ..... A) The cost of direct materials acquired. B) The sum of direct material costs and direct wages. C) The sum of direct expenses, direct material costs, direct wages and production overheads. D) The sum of direct expenses, direct material costs, direct wages, production overheads and administration expenses. Show Answer Correct Answer: C) The sum of direct expenses, direct material costs, direct wages and production overheads. 6. Which of the following correctly identifies normal balances of accounts? A) Assets Debit Liabilities Credit Owner's Capital Credit Revenues Debit Expenses Credit. B) Assets Debit Liabilities Credit Owner's Capital Credit Revenues Credit Expenses Credit. C) Assets Credit Liabilities Debit Owner's Capital Debit Revenues Credit Expenses Debit. D) Assets Debit Liabilities Credit Owner's Capital Credit Revenues Credit Expenses Debit. Show Answer Correct Answer: D) Assets Debit Liabilities Credit Owner's Capital Credit Revenues Credit Expenses Debit. 7. A debt or obligation owed to others. A) Liabilities. B) Assets. C) Owner's Equity. D) None of above. Show Answer Correct Answer: A) Liabilities. 8. How do you calculate the gross profit? A) Sales-Cost of Sales = gross profit. B) Sales + Cost of Sales = gross profit. C) Sales x Cost of Sales = gross profit. D) Sales / Cost of Sales = gross profit. Show Answer Correct Answer: A) Sales-Cost of Sales = gross profit. 9. Which one does not belong to the features of company A) Body Corporate. B) Legal Person. C) Perpetual Succession. D) Sole Ownership. Show Answer Correct Answer: D) Sole Ownership. 10. Purchasing plant or intangible assets to grow a business would be considered which type of business activity? A) Operating. B) Investing. C) Financing. D) Accounting. Show Answer Correct Answer: B) Investing. 11. A government enforced contribution of money typically based on some measure of value. Typically are used to pay for community services such as schools, roads, social security, court systems, and police. A) Tax. B) Welfare. C) Subsidy. D) Social Justice Reform. Show Answer Correct Answer: A) Tax. 12. Which of the following is NOT a normal function of a financial analyst? A) Issue earnings forcasts. B) Examine the records underlying the financial statements to certify their conformance with GAAP. C) Make buy, hold, and sell recommendations on companies' stock. D) Advise institutional investors on their securities holdings. Show Answer Correct Answer: B) Examine the records underlying the financial statements to certify their conformance with GAAP. 13. A dealer dealing in furniture business purchased furniture, recorded in furniture account. A) There is an error in the above transaction, but trial balance will agree. B) There is not any error in the above transaction, trial balance will not agree. C) There is an error and trial balance will not agree. D) None of above. Show Answer Correct Answer: A) There is an error in the above transaction, but trial balance will agree. 14. A decrease in Accounts Receivable is recorded by a ..... entry in the account. A) Debit. B) Credit. Show Answer Correct Answer: B) Credit. 15. Subscription in advance is treated in the Balance Sheet of non-profit making organisations as A) Current asset. B) Fixed assets. C) Current liability. D) Accumulated fund. Show Answer Correct Answer: C) Current liability. 16. All are advantages of amalgamation EXCEPT A) Amalgamation eliminates the cut-throat competition in the industry. B) Monopoly in market can be attained. C) Unemployment may occur. D) People may not work in harmony, thereby resulting in signs of discontentment. Show Answer Correct Answer: A) Amalgamation eliminates the cut-throat competition in the industry. 17. Journal entries are required by the depositor for all of the following except A) Collection of a note receivable. B) Bank errors. C) An NSF check. D) Bank service charges. Show Answer Correct Answer: B) Bank errors. 18. Which of the following assets is not depreciated? A) Computers. B) Store fixtures. C) Trucks. D) Buildings. E) Land. Show Answer Correct Answer: E) Land. 19. The party responsible for all costs from delivery until the goods are successfully sold is called..... A) Trustee. B) Creditor. C) Debtor. D) Commissioner. Show Answer Correct Answer: A) Trustee. 20. All donations received by a non trading concern are entered in the liability side of the balance sheet A) True. B) False. Show Answer Correct Answer: B) False. ← 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