This quiz works best with JavaScript enabled. Home > Accounting > Financial Reporting > Financial Reporting – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 14 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The accounting equation is Assets = Liabilities + Owners Equity A) True. B) False. Show Answer Correct Answer: A) True. 2. Which of the following basic accounting assumptions is threatened by the existence of severe inflation in the economy? A) Monetary unit assumption. B) Periodicity assumption. C) Going-concern assumption. D) Economic entity assumption. Show Answer Correct Answer: A) Monetary unit assumption. 3. Merchandise Inventory is listed on the Income Statement as: A) A current liability. B) A current asset. C) A component in the calculation of the owner's equity. D) A component in the calculation of Cost of Goods Sold. Show Answer Correct Answer: C) A component in the calculation of the owner's equity. 4. Which of the following best describes corporate governance? A) Corporate governance is the system of rules and regulations surrounding financial reporting. B) Corporate governance is the system by which companies and other entities are directed andcontrolled. C) Corporate governance is carried out by the finance department in preparing the financialstatements. D) Corporate governance is the system by which an entity monitors its impact on the naturalenvironment. Show Answer Correct Answer: B) Corporate governance is the system by which companies and other entities are directed andcontrolled. 5. FR ..... 01 control category is detective. A) True. B) False. Show Answer Correct Answer: A) True. 6. James, George, and Noah started a company together. They are trying to understand their company's sources of financing and how the money is being used. Which financial statement should they refer to? A) Balance Sheet. B) Statement of Financial Position. C) Cash Flow Statement. D) Statement of Income. Show Answer Correct Answer: B) Statement of Financial Position. 7. Which one of the following asets may be classified as a non-current asset in the financial statements of a business? A) A tax refund due next year. B) A motor vehicle held for resale. C) A computer used in the office. D) Cleaning products used to clean the office floors. Show Answer Correct Answer: C) A computer used in the office. 8. What is Mydeco's market capitalization at the end of 2019? A) $ 550 million. B) $ 599 million. C) $ 601 million. D) $ 650 million. Show Answer Correct Answer: B) $ 599 million. 9. Which factors may indicate that recognition of an item meeting the definition of an asset or a liability may not provide useful information? A) Uncertainty about whether an asset or liability exists. B) Low probability of an inflow or outflow of economic benefits. C) Other factors. D) All of the above. E) None of the above. Show Answer Correct Answer: D) All of the above. 10. Which of the following remained unchanged in the 2018 Conceptual Framework? A) The reporting entity. B) Derecognition. C) Presentation and disclosure. D) Concepts of capital and capital maintenance. Show Answer Correct Answer: D) Concepts of capital and capital maintenance. 11. Which of the following are advantages of trading as a limited liability company?1. Operating as a limited liability company makes raising finance easier because additional sharescan be issued to raise additional cash.2. Operating as a limited liability company is more risky than operating as a sole trader because theshareholders of a business are liable for all the debts of the business whereas the sole trader isonly liable for the debts up to the amount he has invested. A) 1 only. B) 2 only. C) Both 1 and 2. D) Neither 1 or 2. Show Answer Correct Answer: A) 1 only. 12. Which of the following is the meaning of EQUITY? A) Resources owned as a result of past events and provide economic benefits to the Company in the future. B) Entity capital used in carrying out company operations or activities. C) Present obligations of the Company arising from past events whose settlement is expected to result in an outflow. D) Company financial reports that reflect company profits and losses. Show Answer Correct Answer: C) Present obligations of the Company arising from past events whose settlement is expected to result in an outflow. 13. The Peterson's Piano Company would like to determine Cost of Goods Sold for the past quarter. Per the general ledger, sales are equal to $ 2, 312, 350, beginning inventory is equal to $ 952, 000, net purchases are equal to $ 875, 200, and estimated ending inventory has been calculated to be $ 783, 650. Based on this information, what is the Peterson's Piano Company's Cost of Goods Sold? A) $ 706, 850. B) $ 860, 450. C) $ 863, 650. D) $ 1, 043, 550. Show Answer Correct Answer: D) $ 1, 043, 550. 14. Which of the accounts below is a real account? A) Rent is paid in advance. B) Services revenue. C) Rent Expense. D) Payroll Expense. Show Answer Correct Answer: A) Rent is paid in advance. 15. State the ratio used to measure the average time it takes a company to collect each APLOG customer receivable. A) Cash Ratio. B) Debt Ratio. C) Collection Period Ratio. D) Current Ratio. Show Answer Correct Answer: C) Collection Period Ratio. 16. In preparing a company's statement of cash flows complying with IAS 7 Statements of Cash Flows, which ONE of the following items could form part of the calculation of cash flow from financing activities? A) Dividend paid. B) Issue of bonus shares. C) Proceeds of sale premise. D) Payment of salaries. Show Answer Correct Answer: A) Dividend paid. 17. Non-financial measurements include all of the following except A) Backlog information. B) Customer satisfaction indexes. C) Reject rates on goods purchased. D) All of the choices are non-financial measurements. Show Answer Correct Answer: D) All of the choices are non-financial measurements. 18. Mrs Tri Astuti and Mr Fahmi agreed to establish a company. One form of company that they can establish is: A) Partnership. B) Cooperation. C) Corporation. D) Soleproprietorship. Show Answer Correct Answer: A) Partnership. 19. A balance sheet reports a business's financial A) Condition over a specific period of time. B) Progress over a specific period of time. C) Condition on a specific date. D) Progress on a specific date. Show Answer Correct Answer: C) Condition on a specific date. 20. Free from bias (neutral) and representative (presenting compliance) A) Understandability. B) Comparability. C) Relevance. D) Reliability. Show Answer Correct Answer: D) Reliability. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Reporting Quiz 1Financial Reporting Quiz 2Financial Reporting Quiz 3Financial Reporting Quiz 4Financial Reporting Quiz 5Financial Reporting Quiz 6Financial Reporting Quiz 7Financial Reporting Quiz 8Financial Reporting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books