This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 90 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 90 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Assets = Liabilities + Equity A) Balance Sheet. B) Income Statement. Show Answer Correct Answer: A) Balance Sheet. 2. Vice president of finance A) Internal User. B) External User. Show Answer Correct Answer: A) Internal User. 3. The balance of petty cash book is A) An expense. B) A liability. C) A profit. D) An asset. Show Answer Correct Answer: D) An asset. 4. Which one of the following can the accounting equation be written as A) Assets +Profit-Drawings-Liabilities=Closing capital. B) Assets-Liabilities-Drawings = Opening capital + Profit. C) Assets-Liabilities-Opening Capital + Drawings = Profit. D) Assets-Profit-Drawings = Closing Capital-Liabilities. Show Answer Correct Answer: C) Assets-Liabilities-Opening Capital + Drawings = Profit. 5. Financial information that is verifiable means that: A) Information is clear and concise. B) Knowledgeable users agree that the financial information is faithfully represented. C) The information is useful to users with reasonable knowledge of accounting as well as business and economic activities. D) Users are able to compare different companies, if all the companies use similar accounting practices. E) The financial statements have not been prepared according to GAAP. Show Answer Correct Answer: B) Knowledgeable users agree that the financial information is faithfully represented. 6. Step 6 in the Accounting Cycle A) Financial statements. B) Adjusted trial balance. C) Closing entries. D) Trial balance. Show Answer Correct Answer: A) Financial statements. 7. Which statement is NOT true: A) Inventory is shown on the income statement and in the statement of financial position. B) Expenses should be included on the income statement. C) Inventory should be included on the statement of financial position only. D) Receivables are included in current assets on the statement of financial position. Show Answer Correct Answer: C) Inventory should be included on the statement of financial position only. 8. An entity purchased a property 10 years ago at a cost of $ 200, 000 and have been depreciating it at a rate of 2.5% per annum, on the straight-line basis. The entity have had the property professionally revalued at $ 250, 000.What is the revaluation surplus that will be recorded in the financial statements in respect of this plant? A) $ 250, 000. B) $ 100, 000. C) .$ 50, 000. D) Other. Show Answer Correct Answer: B) $ 100, 000. 9. What does a positive cash flow from operating activities indicate? A) The company is experiencing financial difficulties. B) The company is facing a liquidity crisis. C) The company is investing heavily in new projects. D) The company is generating sufficient cash to cover its operating expenses. Show Answer Correct Answer: D) The company is generating sufficient cash to cover its operating expenses. 10. When preparing the final accounts of a manufacturing business, carriage inwards on raw materials should always be included in: A) A. the income statement. B) B. the manufacturing account. C) C. the trading account. D) The appropriation account. Show Answer Correct Answer: B) B. the manufacturing account. 11. If an organisation has purchased Furniture A) Furniture account will be debited. B) Purchase account will be debited. C) Furniture account will be credited. D) Purchase account will be credited. Show Answer Correct Answer: A) Furniture account will be debited. 12. Deals with the activities which involves the recording and preparation of reports known as financial statements A) Financial Accounting. B) Management Accounting. C) Accounting Education. D) Cost Accounting. Show Answer Correct Answer: A) Financial Accounting. 13. Under the accrual basis of accounting, expenses are reported in the accounting period when the A) Cash is Paid. B) Expense Matches the Revenues or is Used up. Show Answer Correct Answer: B) Expense Matches the Revenues or is Used up. 14. Assets-Liabilities = Owner's Equity A) True. B) False. Show Answer Correct Answer: A) True. 15. Which is an accounting equation based on expressing the relationship between assets, liabilities, and owner's equity? A) A= L+OE. B) A= L-OE. C) L=A+OE. D) YOU=A+YOU. Show Answer Correct Answer: A) A= L+OE. 16. If the debit side is less than the credit side, the balance is shown as By balance c/f on the credit side of its account and it indicates debit balance. A) True. B) False. Show Answer Correct Answer: B) False. 17. On a bank reconciliation, deposits in transit are A) Added to the bank balance. B) Deducted from the bank balance. C) Added to the book balance. D) Deducted from the book balance. Show Answer Correct Answer: A) Added to the bank balance. 18. Ben purchased 15 percent of Toy Company's 100, 000 shares of common stock on January 2 for $ 200, 000. On December 31, Ben purchased an additional 30, 000 shares of Toy for $ 400, 000. There was no goodwill as a result of either acquisition, and Toy had not issued any additional stock during the year. Toy reported earnings of $ 700, 000 for the year. What amount should Ben report in its December 31 balance sheet as investment in Toy? A) $ 440, 000. B) $ 600, 000. C) $ 705, 000. D) $ 880, 000. Show Answer Correct Answer: C) $ 705, 000. 19. A book-keeper compared the business bank statement with the cash book. He then updated the cash book and finally prepared a bank reconciliation statement. Why was the bank reconciliation statement prepared? A) To ensure no transactions had been omitted from the cash book. B) To establish the value of unpresented cheques. C) To explain the difference between the cash book balance and the bank statement balance. D) To find out if any cheques had been dishonoured. Show Answer Correct Answer: C) To explain the difference between the cash book balance and the bank statement balance. 20. Financial data for the Grow Company's prepaid insurance account is below:Prepaid InsuranceBalance January 1, 2023 4, 200Debit entries during 2023 18, 000Balance December 31, 2023 4, 500 How much did Grow pay for insurance before December 31, 2023 for insurance coverage in 2024? A) $ 8, 700. B) $ 17, 700. C) $ 4, 200. D) $ 18, 000. E) $ 4, 500. Show Answer Correct Answer: E) $ 4, 500. ← 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