This quiz works best with JavaScript enabled. Home > Accounting > Financial Accounting > Financial Accounting – Quiz 93 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 93 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following items will be used to calculate the goodwill when a company takes over another firm? I. Purchase price II. The capital of vendor III. The liabilities taken over IV. The value of assets taken over A) I, II. B) III, IV. C) I, II, III. D) I, III, IV. Show Answer Correct Answer: D) I, III, IV. 2. Accounts payable accounting is concerned with vendors. A) True. B) False. Show Answer Correct Answer: A) True. 3. A person who supplies goods to the business is known as A) Debtor. B) Owner. C) Creditor. D) None of this. Show Answer Correct Answer: C) Creditor. 4. What is the total cost with sales tax? Price $ 17.95 Tax 6% A) $ 19.03. B) $ 18.50. C) $ 1.08. D) $ 2.15. Show Answer Correct Answer: A) $ 19.03. 5. Merchandise Inventory is classified as? A) Asset. B) Revenue. C) Current Asset. D) Fixed Asset. Show Answer Correct Answer: C) Current Asset. 6. A person or entity that has an interest in the information that relates to the ability of the business to pay dividends. A) Managing Director. B) CEO. C) Shareholder. D) Supplier. Show Answer Correct Answer: C) Shareholder. 7. The other items of income the business has received during the accounting year from sources other than buying and selling goods A) Other operating income. B) Expenses. C) Sales revenue. D) Purchases. Show Answer Correct Answer: A) Other operating income. 8. Paid in advance should be shown at the ..... side A) Assets. B) Liabilities. C) None of the above. D) None of above. Show Answer Correct Answer: A) Assets. 9. This document communicates what the entity owns in terms of assets, what it owes in the terms of liabilities, and the difference between those two which represents what the owners o the company are entitled to. A) Income Statement. B) Balance Sheet. Show Answer Correct Answer: B) Balance Sheet. 10. In recording trade receivables, proof of transactions is required. The following are errors in using proof of receivables transactions: A) Copy Invoice, recorded in the Sales Journal. B) Proof of Cash Incoming, Recorded in the Cash Receipts Journal. C) Memorial Evidence, recorded in the General Journal. D) Credit Memo, recorded in the Sales Journal. Show Answer Correct Answer: D) Credit Memo, recorded in the Sales Journal. 11. A record that shows the balance for a specific item, such as cash or equipment. A) Accounting. B) Account. C) Financial Reports. D) Accounting Reports. Show Answer Correct Answer: B) Account. 12. A contra account is an account linked with another account. It has an opposite normal balance and is a subtraction from that other account's balance. Example:Accumulated Depreciation A) True. B) False. Show Answer Correct Answer: A) True. 13. Sales are equal to Cost of Goods Sold + Gross Profit A) True. B) False. Show Answer Correct Answer: A) True. 14. What are the metrics commonly used in financial accounting: A) The measure of value is key. B) Measures in kind are essential. C) The measure of time is essential. D) Measures of value, artifacts, time and other measures depending on the administrator's requirements. Show Answer Correct Answer: A) The measure of value is key. 15. Provide 12% interest on capital amounting to Rs.10, 00, 000. The journal entry is ..... A) Interest on capital A/c Dr. 1, 20, 000 To Capital A/c 1, 20, 000. B) Expenses A/c Dr 12, 000 To Capital A/c 12, 000. C) Interest from bank A/c Dr.1, 20, 000 To Cash A/c 1, 20, 000. D) Expenses A/c Dr 1, 20, 000 To Capital A/c 1, 20, 000. Show Answer Correct Answer: A) Interest on capital A/c Dr. 1, 20, 000 To Capital A/c 1, 20, 000. 16. A joint stock company can present its balance sheet A) In any way the company likes. B) As per the schedule of the Companies Act. C) In the way the shareholders like. D) None of above. Show Answer Correct Answer: B) As per the schedule of the Companies Act. 17. Assets = $ 10, 000, Liabilities = $ 8, 000, Owner's Equity =? A) $ 4, 000. B) $ 10, 000. C) $ 2, 000. D) $ 18, 000. Show Answer Correct Answer: C) $ 2, 000. 18. Closing inventory may be valued using first-in, first-out (FIFO) or average cost (AVCO). Which of the following statements is true assuming that prices have fallen throughout the year? A) Closing inventory and profit are higher using FIFO rather than AVCO. B) Closing inventory and profit are lower using FIFO rather than AVCO. C) Closing inventory is higher and profit lower using FIFO rather than AVCO. D) Closing inventory is lower and profit higher using FIFO rather than AVCO. Show Answer Correct Answer: B) Closing inventory and profit are lower using FIFO rather than AVCO. 19. A financial accounting document is a general ledger account that consolidates data from a group of sub-ledger accounts, such as customers and vendors. A) True. B) False. Show Answer Correct Answer: B) False. 20. A motor van broke down in December 2017. The repair bill was not paid until 2018, yet it was treated as a 2017 expense. What accounting concept is being applied? A) Accruals. B) Historical cost. C) Realisation. D) Materiality. Show Answer Correct Answer: A) Accruals. ← 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