This quiz works best with JavaScript enabled. Home > Finance > Accounting > Financial Accounting > Financial Accounting – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Accounting Quiz 11 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Subject to a higher income tax rate and has limited powers. A) Partnership. B) Corporation. C) Sole Proprietorship. D) None of above. Show Answer Correct Answer: B) Corporation. 2. Sales deduct Cost of sales = A) Gross (loss)/ Profit. B) Net profit/ (loss). C) Gross profit. D) Marginal loss. Show Answer Correct Answer: A) Gross (loss)/ Profit. 3. Royalty account is a real account in nature. A) False. B) True. Show Answer Correct Answer: A) False. 4. Define the term 'depreciation' in accounting. A) The process of recording revenue from the sale of an asset. B) Allocation of the cost of a tangible asset over its useful life. C) The increase in value of an asset over time. D) Selling an asset at a higher price than its original cost. Show Answer Correct Answer: B) Allocation of the cost of a tangible asset over its useful life. 5. Which of the following errors is not disclosed in the trial balance? A) Entries made to wrong side of the each account. B) Entries made in the wrong account but on the correct side. C) Transactions omitted entirely or put in twice. D) A transaction posted to only one account. Show Answer Correct Answer: D) A transaction posted to only one account. 6. Which of the following should be charged as an expense in the profit and loss account of a manufacturing firm? A) Work in progress. B) Office rent. C) Direct material costs. D) Carriage charged on raw materials purchased. Show Answer Correct Answer: B) Office rent. 7. A credit to an asset account increases the balance. A) False. B) True. Show Answer Correct Answer: A) False. 8. Interest on Drawings is ..... to drawings and deducted from capital A) Deducted. B) Added. C) Simplified. D) None. Show Answer Correct Answer: B) Added. 9. Explain the concept of goodwill in accounting. A) Goodwill is the total revenue generated by a business in a year. B) Goodwill is the amount of money a business has in its bank account. C) Goodwill is the value of a business's physical assets such as buildings and equipment. D) Goodwill represents the value of a business's reputation, customer base, and other intangible assets. Show Answer Correct Answer: D) Goodwill represents the value of a business's reputation, customer base, and other intangible assets. 10. From an investor's point of view, a liquidating dividend from an investee is: A) Any dividend declared by the investee since acquisition. B) A dividend declared by the investee in excess of its earnings in current year. C) A dividend declared by the investee in excess of its earnings since acquisition by the investor. D) A dividend declared by the investee in excess of the investee's retained earnings. Show Answer Correct Answer: C) A dividend declared by the investee in excess of its earnings since acquisition by the investor. 11. A receipt of $ 15, 700 cash from a customer as a payment on account was incorrectly credit to service revenue. Which is the effect of this error on the company's financial statements? A) Assets are understated by $ 31, 400 and liabilities are understated by $ 31, 400. B) Assets are overstated by $ 15, 700 and owners' equity is overstated by $ 15, 700. C) Assets are overstated by $ 31, 400 and owners' equity is overstated by $ 31, 400. D) Assets are understated by $ 15, 700 and owners' equity is understated by $ 15, 700. E) Assets are understated by $ 15, 700 and liabilities are understated by $ 15, 700. Show Answer Correct Answer: B) Assets are overstated by $ 15, 700 and owners' equity is overstated by $ 15, 700. 12. Under hire purchase system buyer becomes the owner A) On payment of last instalment. B) After receipts of goods. C) On payment of first instalment. D) On payment of down payment. Show Answer Correct Answer: A) On payment of last instalment. 13. In closing entries, there are several accounts that are not closed, except ..... A) All asset accounts. B) All liability accounts. C) All revenue account. D) Owner's capital accounts. Show Answer Correct Answer: C) All revenue account. 14. Deposits in transit A) Have been recorded on the company's books but not yet by the bank. B) Are checks from customers which have not yet been received by the company. C) Have not been recorded by the bank or the company. D) Have been recorded by the bank but not yet by the company. Show Answer Correct Answer: A) Have been recorded on the company's books but not yet by the bank. 15. Though financial statements are useful, they are limited because A) Reports are based on current market value. B) They do not use estimates. C) Non-financial success factors cannot be measured and reported monetarily. D) There are no standards for reporting the economic events of a business. Show Answer Correct Answer: C) Non-financial success factors cannot be measured and reported monetarily. 16. Three factors that contribute to fraudulent activity, except ..... A) Rationalization. B) Opportunity. C) Financial Pressure. D) Integrity. Show Answer Correct Answer: D) Integrity. 17. Define the chart of accounts for cash. A) No. 2101. B) No. 1101. C) No. 101. D) No. 1201. Show Answer Correct Answer: B) No. 1101. 18. Goods and Services are Transferred from one department to another department is known as A) Inter Department Transfer. B) Department Transfer. C) Inside Department Transfer. D) Intra Department Transfer. Show Answer Correct Answer: A) Inter Department Transfer. 19. Reports that summarize changes that result from business transactions during an accounting period. A) Trial balance. B) Financial statements. C) General ledger. D) Journal. Show Answer Correct Answer: B) Financial statements. 20. Work in progress is the: A) Sales less cost of goods sold. B) Sales plus cost of goods sold. C) Value of finished goods on hand. D) Value of partly finished goods. Show Answer Correct Answer: D) Value of partly finished goods. 21. A disbursement journal is a summary of A) All daily transactions. B) Refunds. C) Patient receipts. D) Accounts paid out. Show Answer Correct Answer: D) Accounts paid out. 22. In case of Hire Purchase ownership passes at the time of sale. A) False. B) True. Show Answer Correct Answer: A) False. 23. Carriage outwards account will appear on the A) Debit side of trading account. B) Credit side of trading account. C) Debit side of profit and loss account. D) Credit side of profit and loss account. Show Answer Correct Answer: C) Debit side of profit and loss account. 24. Receipts or increases in cash A) Use. B) Liability. C) WT$. D) Source. Show Answer Correct Answer: D) Source. 25. Records revenue before payment is received A) Accrual Accounting. B) Cash Accounting. Show Answer Correct Answer: B) Cash Accounting. 26. Management accounting, or controlling (CO), is intended primarily for audiences outside the organization A) True. B) False. Show Answer Correct Answer: B) False. 27. The remaining equipment is IDR 500, 000, in the Trial Balance there is an Equipment account IDR 800, 000 A) Supplies (D) Rp. 500, 000 Supplies Expense (K) Rp. 500, 000. B) Supplies Expense (D) 500, 000 Supplies (K) Rp. 500, 000. C) Supplies (D) Rp. 300, 000 Supplies Expense (K) Rp. 300, 000. D) Supplies Expense (D) Rp. 300, 000 Supplies (K) Rp. 300, 000. Show Answer Correct Answer: D) Supplies Expense (D) Rp. 300, 000 Supplies (K) Rp. 300, 000. 28. There is no difference between instalment purchase and credit sale A) True. B) False. Show Answer Correct Answer: B) False. 29. Which of the following accounts would NOT appear in a closing entry? A) Accumulated depreciation. B) Interest income. C) Salary expense. D) Retained earnings. Show Answer Correct Answer: D) Retained earnings. 30. The transfer of goods between department is recorded by debiting A) The receiving department and crediting the giving department. B) The giving department and crediting the crediting the receiving department. C) Stock account and crediting Trading account. D) Trading account and crediting purchases account. Show Answer Correct Answer: A) The receiving department and crediting the giving department. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesFinancial Accounting Quiz 1Financial Accounting Quiz 2Financial Accounting Quiz 3Financial Accounting Quiz 4Financial Accounting Quiz 5Financial Accounting Quiz 6Financial Accounting Quiz 7Financial Accounting Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books