This quiz works best with JavaScript enabled. Home > Accounting > Financial Reporting > Financial Reporting – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Reporting Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The total amount of assets minus the total amount of liabilities will give you the worth of your business A) Liabilities. B) Accounts Payable. C) Owner's Equity. D) None of above. Show Answer Correct Answer: C) Owner's Equity. 2. Contains the meaning of being able to be compared with financial reports in previous periods and with other companies. A) Understandability. B) Comparability. C) Relevance. D) Reliability. Show Answer Correct Answer: B) Comparability. 3. Which of the following is a twelve-month reporting cycle that can begin in any month, except January 1, and records financial data for that twelve-month consecutive period? A) Fiscal year. B) Calendar year. C) Interim period. D) Fixed year. Show Answer Correct Answer: A) Fiscal year. 4. You are preparing the financial statements for abusiness. The cost of the items in closing inventory is $ 41, 875. This includes some items which cost $ 1, 960 and which were damage in transit. You have estimated that it will cost $ 360 to repair the items, and they can then be sold for $ 1, 200. What is the correct inventory valuation for inclusion in the financial statements? A) $ 39, 915. B) $ 40, 755. C) $ 41, 515. D) $ 42, 995. Show Answer Correct Answer: B) $ 40, 755. 5. Listed below are some comments on accounting concepts.1. Financial statements always treat the business as a separate entity.2. Materiality means that only items having a physical existence may be recognised as assets.3. Provisions are estimates and therefore can be altered to make the financial results of a businessmore attractive to investors.Which, if any, of these comments is correct, according to the IASB's Conceptual Framework forFinancial Reporting? A) 1 only. B) 2 only. C) 3 only. D) None of them. Show Answer Correct Answer: A) 1 only. 6. Which of the following is an ethical concern of accountants? A) Earnings manipulation. B) Conservative accounting. C) Industry practices. D) None of the above. Show Answer Correct Answer: A) Earnings manipulation. 7. Principles-Based Approach to Accounting Standard Setting A) Attempts to limit additional accounting guidance. B) A, C, D All are correct. C) Designed to encourage professional judgment and prevent over-reliance on detailed rules. D) It is a contrast to the rules-based approach. Show Answer Correct Answer: B) A, C, D All are correct. 8. What effect does a framework have on an accountant's need to exercise professional judgement? A) Reduces the scope for professional judgment. B) Increases the scope for professional judgment. C) Eliminates the scope for professional judgment. D) Has no impact on the scope for professional judgment. Show Answer Correct Answer: A) Reduces the scope for professional judgment. 9. An entity granted a share appreciation right to the CEO on January 1, 2022. After a 3-year service, the employee is entitled to receive a cash equal to the appreciation in share price over the market value on January 1, 2022. The market value on January 1, 2020 is the predetermined price for the purpose of determining the compensation. The share option right has the following terms:Service period-January 1, 2022-December 31, 2024Number of shares-100, 000Exercise date-January 1, 2025The quoted prices of the entity's share are:January 1, 2022-150December 31, 2022-155December 31, 2023-152December 31, 2024-160Suppose the market value of share drops on December 31, 2024 from 160 to 151.What is the debit entry on December 31, 2024. A) Accrued Salaries Payable-200, 000. B) Accrued Salaries Payable-100, 000. C) Salaries Expense-100, 000. D) Salaries Expense-200, 000. Show Answer Correct Answer: B) Accrued Salaries Payable-100, 000. 10. Can you delete a Commission Report that has already Marked-As-Paid (Paid) A) No. B) Yes. Show Answer Correct Answer: A) No. 11. Removal of directors can be done by ..... A) Central Government. B) Company. C) Tribunal. D) B&C. Show Answer Correct Answer: D) B&C. 12. Qualitative characteristics that make useful information more useful include A) Relevance. B) Faithful representation. C) Comparability. D) All of these. Show Answer Correct Answer: C) Comparability. 13. For 2009, Flamingo Products had net income of $ 1, 000, 000. At 1 January 2009, there were 1, 000, 000 shares outstanding. On 1 July 2009, the company issued100, 000 new shares for $ 20 per share. The company paid $ 200, 000 in dividendsto common shareholders. What is Flamingo's basic earnings per share for 2009? A) $ 0.80. B) $ 0.91. C) $ 0.95. D) None of above. Show Answer Correct Answer: C) $ 0.95. 14. ABC Co. follows the accrual basis of accounting and performs a service on account (on credit) in December. The service was billed at the agreed upon amount of $ 3, 500. ABC Co. debited Accounts Receivable for $ 3, 500 and credited Service Revenue for $ 3, 500. The effect of this entry on the balance sheet of ABC is to increase assets by $ 3, 500 and to A) Increase Owner's (Stockholders') Equity By $ 3.500. B) Decrease Assets By $ 3, 500. Show Answer Correct Answer: A) Increase Owner's (Stockholders') Equity By $ 3.500. 15. Which of the following is an example of a financing activity on the cash flow statement under US GAAP? A) Payment of interest. B) Receipt of dividends. C) Payment of dividends. D) None of above. Show Answer Correct Answer: C) Payment of dividends. 16. All U.S. businesses uses the same system which follows established accounting guidelines called "generally accepted accounting principles." or ..... A) GAAP. B) GAAPS. C) GAAPs. D) None of above. Show Answer Correct Answer: A) GAAP. 17. When an entity presents a semi-annual statement of financial position dated as at June 30, 20x1, the comparative information is dated as at June 30, 20x0. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 18. One of the accounting professions that is very necessary in the era of industrial revolution 4.0, namely A) Compile the amount/data of purchases and sales in the report book. B) As a provider of financial information and provides analysis of the financial data. C) Record the amount of incoming cash manually. D) Perform customer data entry. Show Answer Correct Answer: B) As a provider of financial information and provides analysis of the financial data. 19. Accounting is considered as a means of providing an overview of transactions carried out with the environment in the past. This is the nature of accounting as..... A) Catatan historis. B) Economic reality. C) Information Systems. D) Accountability. E) Rules. Show Answer Correct Answer: A) Catatan historis. 20. The owner is a separate person to the business. This is based on the ..... A) Business entity concept. B) Monetary measurement concept. C) Accrual concept. D) Dual aspect concept. Show Answer Correct Answer: A) Business entity concept. ← PreviousNext →Related QuizzesAccounting QuizzesFinancial Reporting Quiz 1Financial Reporting Quiz 2Financial Reporting Quiz 3Financial Reporting Quiz 4Financial Reporting Quiz 5Financial Reporting Quiz 7Financial Reporting Quiz 8Financial Reporting Quiz 9Financial Reporting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books